Wake up daily to our latest coverage of business done better, directly in your inbox.


Get your weekly dose of analysis on rising corporate activism.

Select Newsletter

By signing up you agree to our privacy policy. You can opt out anytime.

Lauren Zanolli headshot

Hershey Sweetens Up Its Palm Oil Sourcing Policy


The Hershey Co. last week announced updates to its palm oil sourcing policy that provide more specific standards for growers to meet under its 2013 commitment to 100 percent sustainable and traceable palm oil. The updates fall largely in line with existing industry standards on sustainable growing practices but, with the help of a nonprofit supply chain consultant, denote an increased focus on traceability -- a growing trend across the consumer products industry.

The new supplier standards include clarifications on previous commitments to avoid environmentally impactful growing practices like deforestation and peat farming. They also help to define best practices through international labor and human rights standards from the United Nations and the International Labor Organization. Hershey's updated standards match existing standards for responsible farming from the industry’s leading certification group, the Roundtable on Sustainable Palm Oil (RSPO), which Hershey joined in 2011.

Earlier this year, the Pennsylvania-based company said it had met its goal of buying 100 percent “mass balance” RSPO certified palm oil -- a mixture of sustainable-certified and conventional palm oils -- a year ahead of its stated 2015 goal. Last year, the confectionery company announced it would commit to buying only fully traceable palm oil by the end of 2014.

Wednesday’s policy update builds on this 2013 commitment, and the company estimates that it will be able to trace all of its palm oil supplies to the mill-level by first quarter of next year -- falling just shy of its Q4 2014 goal. Hershey joined a nonprofit group called The Forest Trust (TFT) in July of this year and says the group will aid in its work on supply chain traceability. Other large confectionery companies like Nestle and Mars have also set full-traceability goals and are members of the TFT group, along with Wilmar, an Asian agribusiness company that controls 45 percent of the world’s palm oil supply.

In a May 2014 brief entitled “Lessons Learned in Palm Oil One Year On (2014),” TFT advocates for companies to set their own standards on palm oil sourcing, rather than rely on outside certifications like RSPO. In the same brief, the group also notes that time-bound commitments can often backfire for companies, since their progress on integrating sustainable palm oil sources depends largely on suppliers’ ability to meet new standards.  “TFT believes that the best way to address this is for companies to transparently / publicly report about the progress they are making on the implementation of their  policy ... without necessarily making a specific time-bound commitment,” it wrote in the brief.

Palm oil production has been directly linked to massive tracts of deforestation and animal habitat destruction across Southeast Asia, particularly in Indonesia and Malaysia, the world’s leading palm oil producers. Full and accurate traceability is a crucial, but difficult to achieve, step toward reining in the impacts of an industry known for its exploitation of workers, indigenous rainforest communities and environmental resources.

Image credit: Flickr, Daniel R. Blume

Lauren Zanolli headshotLauren Zanolli

Lauren is a freelance writer based in New Orleans. She has covered a wide array of geographies and topics, from economic and business developments in the Arabian Gulf, to arts and culture in Turkey, to social enterprise and the microfinance sector in Southeast Asia. She's also worked on the business side of things, with two years experience in strategy and marketing at a large renewable energy firm. Keep in touch: @laurenzanolli and lauren.zanolli@gmail.com.

Read more stories by Lauren Zanolli

More stories from Leadership & Transparency