WPP’s goal is to be the world’s most successful provider of communications services, not just the largest: a Group that the best clients and the best people choose to work with. To achieve this we need to focus not just on what we do but how we do it. That means behaving responsibly towards people and the environment, and responding to the changing expectations of the Group’s clients, share owners, our people and other stakeholders.
We see our approach to social, ethical and environmental issues as fundamental to our long-term success and believe that strong performance creates opportunities for WPP and its companies as well as helping to minimise risks. To better reflect this, we are now using the term sustainability rather than corporate responsibility to describe our approach.
Our commitment to responsible and sustainable business enables us to take advantage of new opportunities as well as to manage social and environmental risks connected to our business strategy. The main business impacts from sustainability issues are as follows:
- Client relationships and revenue support
Sustainability continues to grow in importance for consumers, governments, brands and businesses worldwide. Major brands are increasingly focused on raising standards and managing their reputation by positioning themselves as responsible members of society and stewards of the environment. This global business movement is creating opportunities for our companies, from research to advice to communications and marketing. Our companies have responded, developing skills and services to meet the needs of clients aiming to establish credentials for environmental, social and ethical excellence.
Our commitment to responsible and sustainable business enables us to take advantage of new opportunities as well as to manage social and environmental risks connected to our business strategy
WPP’s status as the first mover in sustainability in our sector is now helping our companies enter this market with confidence and credibility. In addition to sustainability-related marketing briefs, a growing number of clients are requesting information on our own sustainability policies and performance through their tender and supplier management processes. Clients who engaged with WPP on our approach to sustainability were worth at least $1 billion to the Group in 2011, and we believe the total figure is likely to be higher.
- Attracting and retaining the best people
There is fierce competition for talent in our industry. Adopting leading employment practices helps us to attract and retain the best people. Creating a diverse company culture widens our potential talent pool, and enables people from all backgrounds to thrive within the Group. A diverse workforce also enhances our understanding of consumers in all markets. Our investment in high-quality bespoke training helps us to develop the skills needed to grow our business in key areas such as digital marketing and managing cross-company client teams.
The younger generations replenishing our talent pool view sustainability issues as central to business. Questions relating to sustainability are frequently raised – demonstrating that our commitment to social and environmental issues supports recruitment and retention. The Group’s collective pro bono work and support for charities and community organisations reinforces our reputation for making a positive contribution to society.
- Reputation risk management
Effectively managing social, ethical and environmental risks helps to minimise the possibility of damage to our reputation. There is a potential risk that we undertake work or accept clients that could harm our reputation. We evaluate higher-risk propositions with care and WPP companies undertake work in compliance with regulations and marketing standards. New commissions and work in regions with low marketing standards are given particular scrutiny. Similarly, risks associated with business acquisitions and affiliations are assessed as part of our due diligence procedure.
- Access to digital marketing business
The rapid growth of digital marketing and the convergence and connectivity of consumer electronic devices mean that the Group handles and holds increasing amounts of consumer data on behalf of our clients. Our clients require assurance that we meet best practice standards for privacy and data protection which are central to maintaining our reputation in this important sector. The Group and its companies are updating policies and procedures to ensure we meet best practice in this area.
- Meeting investor expectations
WPP share owners continue to show interest in how we manage sustainability risks and opportunities and we aim to respond constructively to their requests for information (see Stakeholder engagement below). Europe has the largest market for responsible investment, with approximately €5 trillion assets under management. The US has $3 trillion, and Asia is predicted to have $4 trillion by 2015.
- Improving efficiency
Our climate change strategy is tangible evidence of our environmental commitment and supports our good reputation. The strategy also reduces costs associated with business travel and energy use in offices. In 2011, energy use across the Group decreased by 1.5% which represents an approximate cost saving of half a million US dollars. Investing in initiatives to improve employee health and wellbeing can also help to improve productivity and reduce costs related to time off work due to illness.
Paul Richardson also provides an annual assessment of sustainability risks and performance to the Nomination and Governance Committee (prior to 2011 the assessment was made to the Audit Committee). This is in addition to the business and financial reporting risks process described earlier in this section of the report.
Paul Richardson chairs WPP’s Sustainability Committee (previously called our Corporate Responsibility Committee), established in 2003. The committee is made up of senior representatives from Group functions and our companies, and serves as a forum to review strategy and progress against targets, to share best practice around the Group and to identify opportunities for collaboration. The committee met once formally in 2011 when the main topics discussed were:
- Opportunities associated with sustainable marketing
- Marketing ethics and risk management
- Privacy and data security
- Employment practices
- Progress against our climate change strategy
- Supply chain management
Our approach to managing sustainability issues reflects the diversified and de-centralised structure of the Group. Strategic direction and underlying policy principles are established by the parent company, for example through the WPP Code of Conduct and Group Sustainability Policy. Detailed policies are developed and implemented by our operating companies to reflect their businesses.
Feedback from clients, investors, our people and other stakeholders helps us to improve how we manage social and environmental issues and to identify emerging risks and opportunities
We have a small central sustainability function within the parent company, which is responsible for strategy development, coordinating data collection, reporting and communication on sustainability with responsible investors, other stakeholders and our companies. It works with other Group functions, such as our talent team, legal, communications, compliance, internal audit, real estate, IT and procurement, to progress the sustainability agenda. It helps raise awareness of sustainability across the Group and provides support and guidance on sustainability issues to our operating companies. The head of sustainability reports directly to the Group finance director.
WPP’s Code of Conduct and Sustainability Policy are publicly available on our website, www.wpp.com.
Risk and opportunity
We take an integrated approach to risk management which encompasses financial and non-financial risks. Our key sustainability risks are explained in Principal risks and uncertainties , and include marketing ethics, privacy and data protection, employment practices and climate change. Providing sustainability marketing services to clients is our most significant sustainability opportunity, see The impact of our work.
At every Board meeting, the Group chief executive presents a Brand Check review of each of the business’ operations, including an assessment of risk in each business. This includes sustainability risks such as employment risks and marketing ethics risks.
Paul Richardson also provides an annual assessment of sustainability risks and performance to the Nomination and Governance Committee (prior to 2011 the assessment was made to the Audit Committee). This is in addition to the business and financial reporting risks process described earlier in this section of the report.
Reviews of sustainability risks may be included in internal audits (or SOX audits) depending on their scope. Significant findings are related to the Audit Committee.
Data and reporting
We have established a set of key performance indicators (KPIs) relating to employment, social investment, environment and climate change. We report performance against these in our annual Sustainability Report.
Operating companies report their sustainability data to the parent company quarterly through our Group financial reporting system.
We will publish our 10th social and environmental performance report in June 2012. The report will provide a detailed account of our sustainability performance. A summary of our progress is provided on this page.
Feedback from clients, investors, our people and other stakeholders helps us to improve how we manage social and environmental issues and to identify emerging risks and opportunities.
We respond to regular requests for information from clients on our approach to sustainability issues and we collaborate with them on these topics as appropriate. For example, WPP is a member of P&G’s Sustainability Supplier Board and is helping them to pilot their supplier sustainability scorecard project.
We assist investors to understand the issues material to our business and respond to their feedback where possible. To raise investor awareness of our approach to sustainability we submit this sustainability section of our Annual Report for share owner vote at our AGM. In 2011 we responded to requests for information and engagement by the following investment organisations:
- ASN Bank
- BNP Paribas
- Carbon Disclosure Project
- Dow Jones Sustainability Index
- Ethical Investment Research Service (EIRIS)
- Goldman Sachs
- Sycomore Asset Management
WPP is included in the Dow Jones Sustainability Index and the FTSE4Good Index. We were ranked 41 out of 500 in Newsweek magazine’s Green Rankings 2011.
Most engagement with stakeholders takes place as part of everyday business. To supplement this, in January 2012, we held a stakeholder meeting to obtain feedback from investors, clients and sustainability experts. Issues raised by participants at this meeting included our approach to integrating sustainability across the Group, commercial opportunities relating to sustainability in marketing, our approach to managing ethical issues in client work and our policy on issues such as tax and lobbying. We are reviewing the feedback and will respond where possible.
WPP is a member of a number of organisations working to improve practices in aspects of sustainability. These include:
- Business in the Community’s diversity initiatives: Opportunity Now and Race for Opportunity
- Employers Forum on Disability
- The Media Trust
- The Institute of Business Ethics
Embedding ethical behaviour
All our people are expected to comply with the standards set out in our Code of Conduct and Sustainability Policy. These provide guidance for our people in dealing with a wide range of ethical, social and environmental subjects and are available on our website and intranet. Both are regularly updated.
To reinforce the importance of meeting high ethical standards, the senior management of each WPP company are required to sign a statement annually confirming that they comply with WPP’s Code of Conduct. Our Code of Conduct is supported by more detailed policies which cover a range of issues, such as gifts and entertainment and the appointment of advisors. These are included in the WPP Policy Book.
All employees must undertake our online ethics training, entitled ‘How we behave’, which is based on the WPP Code of Conduct, and covers topics such as diversity, responsibility to stakeholders and avoiding misleading work. It uses scenarios to help our people identify and respond appropriately to ethical issues they may encounter in their work. Employees must also complete our online training on anti-bribery and corruption, which covers the Foreign Corrupt Practices Act and UK Bribery Act 2010 and issues such as hospitality and gifts. By the end of 2011, over 100,000 of our people had undertaken both sets of training. We intend to refresh both training courses during 2012.
WPP is included in the Dow Jones Sustainability Index and the FTSE4Good Index. We were ranked 41 out of 500 in Newsweek magazine's Green Rankings 2011
In 2011 we appointed a compliance officer to oversee our approach to ethics and compliance and to provide support and guidance to our operating companies. She reports to our Group chief counsel and director of internal audit.
Employees can report any concerns or suspected cases of misconduct in confidence through our third party-managed Right to Speak facility, overseen by our internal audit department. This is publicised through induction packs, the Group intranet, the WPP Policy Book and our ethics training. There were 42 calls made via Right to Speak during 2011.
We believe that the marketing industry can play an important role in helping to create a more sustainable society. For example, by developing communications that make sustainable products, services and lifestyles more desirable, and by helping brand owners to deepen their understanding of sustainability issues and changing consumer and societal attitudes.
Our goal is for WPP to be a centre of excellence for sustainability communication, giving our clients the best advice and enhancing consumers’ understanding of sustainability issues.
Our approach encompasses research and insight, branding and strategy advice, and consumer and stakeholder communications. We are seeing growing demand for these services, with sustainability becoming embedded into an increasing number of marketing briefs.
We also create social marketing campaigns, usually for government or NGO clients, tackling issues related to public health, safety or the environment. They are designed to raise awareness or encourage people to change their behaviour.
Many of our companies have developed bespoke sustainability services for clients. These include Burson-Marsteller’s Global Corporate Responsibility Practice, Hill+Knowlton Strategies’ CR & Sustainability Communications offering, JWT Ethos, Ogilvy Earth, P&G’s S-Team (including Added Value, FITCH, G2, The Futures Company, Hill+Knowlton Strategies, Landor and Penn Schoen Berland); and PSB Green.
To help our clients more easily access our sustainability expertise and to enhance collaboration on sustainability between Group companies, we published a Sustainability Navigator in early 2012. This handbook and online resource summarises our companies’ sustainability offerings together with contact details for sustainability experts around the Group.
Examples of client work in this area are included in our Sustainability Report.
All work produced by WPP companies should present products fairly and accurately, comply with relevant laws and marketing codes, and reflect changing public attitudes to questions of taste and decency or marketing of sensitive products. We recognise the challenges involved in distilling complex sustainability issues into simple marketing messages and will not produce work for our clients that ‘greenwashes’ the environmental performance of their company or brands. A failure to meet high standards in this area could damage the reputation of WPP, our companies and our clients.
We recognise the challenges involved in distilling complex sustainability issues into simple marketing messages and will not produce work for our clients that ‘greenwashes’ the environmental performance of their company or brands
Our principles for marketing ethics are summarised in our Code of Conduct and Sustainability Policy. Both policies are available on our website. In addition many of our companies have their own policies and guidance for employees.
Few campaigns that we produce for clients provoke complaint, but occasionally complaints do occur relating to matters of taste or fact. In most countries these are arbitrated by government or industry organisations. Data on upheld complaints is available in our Sustainability Report.
Where we operate, who we work for and the type of work we undertake can give rise to ethical issues. Examples include: work undertaken for governments or clients in sensitive sectors; operating in countries with a poor human rights record; and marketing for sensitive or controversial products.
We have established a review and referral process to help us identify these cases, to manage any risks to WPP or our clients and to make sure our decisions reflect the standards in our Code of Conduct and Sustainability Policy.
Before accepting work that may pose an ethical risk, employees are required to elevate the decision to the most senior person in the relevant office and then to the most senior executive of the WPP operating company in the country concerned, who will decide if further referral to a WPP director is required.
WPP has a committee which meets to discuss cases of concern and identify new risk areas. Committee members are senior managers at Group level and meetings take place at least quarterly. The internal audit program of work incorporates a review of the considerations given by management to possible impacts on the Group’s reputation prior to accepting new clients.
Our referral process is outlined in the WPP Policy Book. Our ethics training includes a module to help employees identify ethical risks associated with client work, and to make sure they understand the correct referral procedures.
Privacy and data security are important issues for WPP. Our companies collect consumer data through new media and digital channels as well as consumer research, direct marketing and PR and use it to gather opinions, study attitudes (including purchasing habits) and to create targeted digital and direct marketing campaigns. Awareness of privacy issues continues to grow across all markets and is being further cemented by the introduction of new laws and regulations in this area. Some consumers and interest groups are concerned about the collection and use of personal data for marketing purposes, including practices such as behavioural targeting.
Privacy is a complex issue to manage, as changes in technology can create new challenges. Regulation and standard practices can vary between markets.
Our privacy approach
Our approach to privacy is guided by four priorities: maintaining consumer trust; reducing legal and financial risks to WPP; educating our people and the people we work with and improving our own knowledge base; and enabling our clients to use consumer data appropriately to enhance their marketing.
The parent company provides guidance and advice to the operating companies on privacy and data security issues. We are adding privacy and data security to our revised ethics training which will be rolled out to all employees in 2012. To raise awareness among our people and to help them understand their legal responsibilities and the need to balance commercial objectives with privacy obligations a briefing document has been added to the Group intranet. This defines basic privacy-related terms and includes guidance on privacy clauses in client contracts, data privacy expectations and what to do if a breach occurs. It was presented to the finance directors of Group companies in 2011; some companies have distributed it directly to each of their employees. In 2012, we will survey a representative sample of our companies to further improve our understanding of the type of data they are handling, and its location, so that we can provide more tailored advice going forward.
Our key digital marketing and research companies have nominated senior executives to provide leadership on privacy, and they work with other companies in the Group and clients to share best practice. Many of our companies have policies and procedures covering how data (including protected types of personal data) should be handled, and some have developed their own technology and tools to improve transparency.
We continue to review the contractual arrangements we have in place with our suppliers and clients to clarify our respective roles and responsibilities, to make sure these are appropriate and consistent and to ensure that they continue to meet the requirements of evolving laws and regulations. In 2011, we started to audit these contracts to make sure provisions are being met.
We work with partners on privacy issues. Our companies meet with regulators and participate in consultation exercises to give their views on proposed regulation. In 2011 this included an initiative with the Digital Innovation and Privacy Forum on forthcoming European Union data protection legislation which will significantly change the way that consumers’ data is stored online.
John Montgomery, COO at GroupM Interaction, is currently chair of the American Association of Advertising Agencies Privacy Committee which works to address internet privacy issues, particularly related to internet-based advertising.
More information is available in our Sustainability Report.
Leading employment practices help us to recruit and retain the best people across our markets with the skills we need to achieve our business strategy. There is fierce competition for talent in our industry, particularly in fast-growing economies and in areas such as digital marketing. As our business strategy evolves, we also need the right people to fill new roles; for example, to run the growing number of cross-company account teams we have introduced.
Our commitment to diversity and inclusion, high-quality training and competitive remuneration supports our efforts to attract and retain the best people with the right skills. We believe that a reputation for environmental and social responsibility also enhances the appeal of our companies to prospective recruits.
WPP’s chief talent officer, Mark Linaugh, and our talent team assist our companies to attract and develop our talent. Our Code of Conduct and Sustainability Policy provide guidance to our companies on the principles which should underpin employment policies at WPP companies. Human resources policies are agreed and implemented at operating company level.
Diversity and inclusion
Workplace diversity enables us to better understand the varied interests and expectations of consumers. An inclusive workplace culture helps us to attract talented people from all backgrounds and to create an environment where they can do their best work.
Our non-discrimination policy, introduced in 1992, commits all WPP companies to select and promote people based on merit and regardless of factors such as race, religion, national origin, colour, sex, sexual orientation, gender identity or expression, age or disability. Policies on harassment and non-discrimination are included in our Code of Conduct. In the case of disability, our policy is to provide continuing employment and training wherever practicable.
Workplace diversity enables us to better understand the varied interests and expectations of consumers
Our people can report any concerns or suspected cases of discrimination or misconduct confidentially (and anonymously if desired) through our Right to Speak helpline.
Policies and programs aimed at increasing workforce diversity are designed and implemented by our operating companies. To support this, the parent company provides opportunities for our companies to share ideas and best practices and to hear insights from experts and organisations working in this field. For example, during 2011 the FutureWork Institute led a workshop for our global HR directors in New York designed to develop skills that help overcome gender inequality in the workplace. We also held a workshop for HR directors in the UK, where our companies met with a number of expert organisations including Business in the Community’s Race for Opportunity and Opportunity Now, the Employer’s Forum on Disability and Stonewall.
All of our major companies have internal programs to promote diversity and inclusion in their workforce. These include:
- Partnerships: our companies work with diversity organisations and participate in initiatives to encourage diversity. In the US, these include AAF Most Promising Minority Student; Asian Women in Business; The National Black Public Relations Society; National Association of Black Journalists; National Association of Hispanic Journalists; City University of New York; the LAGRANT Foundation and the 4As Diversity Programs.
- Internships: In the US, several companies participate in the AAAA’s Multicultural Advertising Internship Program (MAIP) and other initiatives that allow minority students to gain experience in the marketing industry. In many countries our companies have developed partnerships with local schools to encourage students from a wider range of backgrounds to consider a career in marketing services.
- Targeted recruitment: to help diversify their recruitment pools, many of our companies use specialist recruitment agencies and publications and attend minority recruitment fairs.
- Raising employee awareness: training and awareness campaigns help employees understand the importance and business benefits of diversity and inclusion.
Gender diversity 2007-2011
|Board members/executive leaders||33||32||32||31||31|
There are currently three women on WPP’s Board and a female Company Secretary, Group communications director and Group chief counsel.
Data on ethnicity and nationality are provided in our Sustainability Report.
Development and training
High-quality training enables our people to gain new skills and to advance their careers within the Group. It supports our business strategy, for example through enabling more of our workforce to develop and keep up-to-date the skills we need to grow our digital marketing business. Several thousand people take part in training and professional development opportunities each year at both the parent and operating company levels. These cover all aspects of company business and creative skills. Centralised programs enable participation by all WPP companies and promote collaboration across disciplines and regions. In 2011, WPP companies invested £58.3 million in training and wellbeing, a 19% increase over the previous year and a 9% increase per person.
Our goal is for our people at all levels to receive regular performance appraisals.
Group-wide training programs include:
- WPP Spectrum, currently being piloted by Young & Rubicam Group, is a new program designed to develop the next generation of multidisciplinary global client leaders. Through 360 degree assessments, personal development planning, networking, collaboration and knowledge sharing, and interaction with senior leaders from WPP and our operating companies, participants gain the ‘Super Skills’ needed for roles of this size and complexity. The program supports our strategy of developing multi-company, multidisciplinary teams differentiated by their ability to navigate changing market conditions, translate insights into powerful ideas, mobilise resources and deliver exceptional work. It has been developed in partnership with some of our major clients and will be available to interested companies in the Group in 2012.
WPP Spectrum... is a new program designed to develop the next generation of multidisciplinary global client leaders
- Maestro: Orchestrating Client Value is our flagship executive education program. This five-day course is aimed at strengthening the ability of our most senior client leaders to be valued and trusted advisers to their clients, colleagues and teams. Since the program’s inception in 2003, it has been held in 22 countries, has reached more than 2,500 participants and involved 82 WPP companies.
- The WPP ‘Mini MBA’ is designed to build functional knowledge and abilities. It combines online tutorials and simulations with instructor-led classroom training. Business disciplines covered are growing and winning business, strategy, marketing, people and organisational development, commercial acumen and working across cultures. Approximately 1,300 people have participated in the program.
- ‘The X Factor’ is a senior mentoring and development program, led by the former global CEO of Ogilvy & Mather and chairman of JWT, Charlotte Beers, which prepares high-potential women in our operating companies for the next level of leadership. So far, 44 women have completed the program.
- In 2011 we resourced a training program in Shanghai in conjunction with the China Europe International Business School to promote global client and agency leadership. We will host a second program in Africa in 2012.
Education and social mobility
A successful marketing and communications services business is built on the intelligence, insight and creativity of its people. Having a pool of talented people to recruit from across our markets is central to our success.
Support for education and social mobility promotes long-term economic development which makes it particularly important in the current challenging economic climate
We invest time, money and expertise in education and social mobility programmes to support our local communities and help to make sure that, in the future, we have people with the skills we require. We take a targeted approach, aiming to build long-term relationships in geographic regions that are strategically important to us.
China is currently facing a shortage of talent, and this is where our business is growing most quickly. We are working with the Shanghai Art & Design Academy (SADA) to launch China’s first marketing and communications program focused on applying skills in the commercial environment. The first 50 students enrolled in September 2011, chosen from a pool of 1,358. They will complete a three-year diploma program which brings together a strong academic and creative curriculum combined with practical application. It is anticipated that the annual class will eventually total 300.
Support for education and social mobility promotes long-term economic development which makes it particularly important in the current challenging economic climate. In the UK, we are one of around 100 companies that signed up to the Government’s ‘Business Compact’, which supports social mobility among young people. Our approach to supporting local schools, raising young people’s aspirations, improving skills and giving young people access to jobs, are very much in line with the commitments that the compact sets out. For example, we have built a successful partnership over many years with Charles Edward Brooke School in Lambeth, London.
In addition, one of our senior parent company executives, Peter Dart, is a trustee of the UK’s Education and Employers Taskforce, which aims to create connections between schools and businesses. We are involved in their Speakers for Schools initiative which invites prominent business leaders to speak at schools. In 2012, we will be participating in their Inspiring the Future initiative, which enables pupils to meet with managers from large companies and find out what their job involves.
Remuneration and share ownership
We benchmark our reward packages against other companies in the sector to ensure our pay packages are set at the right level. In addition to base pay, many of our people participate in performance-based incentive plans that reward achievement against annual or longer-term goals relevant to their area of the business.
Participation in share-based incentive plans gives our people the opportunity to acquire a stake in the Company and share in its success. Senior employees receive a significant part of their compensation through share-based incentive plans. In 1997, WPP introduced the Worldwide Ownership Plan that typically makes share awards to approximately 47,000 eligible employees per year in over 78 countries and, since inception, has made awards to over 110,400 of our people. We also provide local benefits such as retirement and medical plans.
For information on our approach to executive remuneration, see How we're rewarded.
Regular communication helps our people in all markets to keep up-to-date with Group news and changes in the business. In addition, our operating companies use a range of channels to communicate news and to obtain feedback.
We are integrating questions on sustainability into the employee opinion surveys conducted by our operating companies to help us assess attitudes and awareness around the Group. The questions relate to issues such as ethics, training, wellbeing and the environment. The results will be published in our Sustainability Report.
Group-wide communications channels include:
- WPP’s multi-award-winning public website, Group intranet site, social media channels and professional knowledge communities.
- WPP’s multi-award-winning global newspaper and eBook, The WIRE.
- WPP’s public monthly online news bulletin, e.wire, and monthly digital update, Digital Loop.
- WPP’s annual journal of original thinking, the Atticus Journal.
- The WPP Reading Room, an extensive online library of thinkpieces (both public and original) from WPP professionals worldwide.
- Our multi-award-winning Annual Report & Accounts, financial statements and Sustainability Report, which are distributed across the Group and are available on our websites.
- Regular FactFiles profiling specialist services and resources within the Group.
- Regular communication on Group initiatives such as the Worldwide Partnership Program, BrandZTM, the Atticus Awards, the WPPED Cream awards, the WPP Marketing Fellowship Program and professional development workshops.
- Our series of Navigator handbooks, which provide a directory of specialist expertise and individual experts within Group companies, such as sustainability and healthcare communications. A Sports Navigator and Retail Navigator will be published in 2012.
- Periodic reports from the Group chief executive on topics of importance.
- Formal and informal meetings at operating company level.
Health and wellbeing
Our companies invest in initiatives to improve the health of their workforce and to mitigate any health and safety risks. This contributes to employee productivity and reduces the costs of people taking time off work due to illness.
As an office-based business, the main health and safety risks to our people are injuries connected to workstation ergonomics and work-related stress.
Ensuring our workstations follow good practice design reduces problems such as repetitive strain injury or back problems.
Our companies assess the risk of work-related stress through regular staff surveys and by monitoring issues raised via our Right to Speak helpline, Employee Assistance Programs and during exit interviews.
Initiatives to combat workplace stress vary by company but may include:
- Employee Assistance Programs – a source of confidential advice, support and counselling.
- Flexible benefit programs, including subsidised childcare.
- Flexible work arrangements enabling people to work part-time or from home.
- Medical checks and health screening.
- Training on stress and time management.
Health and safety data is published in our Sustainability Report.
Employee external appointments
We recognise that our companies’ executives may be invited to become non-executive directors of other companies, and that such experience may be beneficial to the Group. Consequently, executives are allowed to accept non-executive appointments with non-competing companies, subject to obtaining the approval of the Group chief executive in the case of senior executives, the Group chief executive and chairman in the case of Board members, and the approval of the Nomination and Governance Committee in the case of the chairman or Group chief executive. Any fees receivable out of such appointments may be retained by the individuals concerned
Our environmental impact is relatively modest. However, we view our efforts to reduce it as an opportunity to demonstrate to clients, our people and investors that we have strong environmental principles. Clients are showing increased interest in our approach to environmental issues and in some cases asking us to provide information and data on our carbon footprint. Using energy and other resources more efficiently can also result in cost savings. In 2011, energy use across the Group decreased by 2% which represents an approximate cost saving of $500,000.
Our priority is to reduce our carbon footprint. We also work to use resources more efficiently, to purchase more sustainable goods and services and to reduce waste and increase recycling.
To implement our strategy, we have established Environmental Action Teams in North America, Europe, Asia Pacific and Latin America. These include members of our IT, real estate and procurement functions.
Building a low-carbon Group
Climate change is the priority environmental issue for WPP. Our strategy is to reduce our carbon emissions by:
- Improving the energy efficiency of our buildings and IT.
- Reducing non-essential flights by promoting videoconferencing.
- Purchasing renewable electricity where available.
- Offsetting a portion of our unavoidable CO2 emissions, equivalent to those from business air travel.
Our Environmental Action Teams identify energy- and carbon-saving measures and provide technical guidance to our companies. They are supported by a network of Climate Champions, who help to implement these measures in our companies.
Our target is to reduce CO2 emissions per person to 1.2 tonnes by 2020, a 63% reduction on our 2006 baseline. We believe a carbon intensity target is most appropriate for WPP, as Group headcount is closely linked to levels of business activity. Our business evolves continually through acquisitions and disposals. The intensity measure allows us to reflect this without needing to adjust our baseline.
In 2011, our carbon footprint per person was 2.44 tonnes, down 3% on 2010 and 26% lower than 2006. Despite this progress, we are unlikely to meet our interim target of 1.8 tonnes per person in 2012. We are reviewing our strategy and will adjust our approach as necessary to work towards our 2015 and 2020 targets.
|tonnes of CO2 per person|
|Office energy use||1.38||1.27||1.45||1.36||1.25|
Our absolute carbon footprint in 2011 was 277,058 tonnes of CO2 (rating renewable energy as zero emissions), an increase of 6% over 2010 compared to a 9% growth in headcount. This increase is primarily due to growth in business air travel. Emissions from air travel increased by 15%, due to an upturn in business activity and despite our investment in videoconferencing. Although we used less energy in our offices (345,411 MWh in 2011 compared with 350,724 MWh in 2010), associated emissions rose by 1%. We believe this is due to growth of our business in countries such as India and China in particular where grid electricity is relatively more carbon-intensive.
WPP’s carbon footprint (rating renewable energy as zero emissions)
|CO2 emissions (tonnes)|
|Office energy use||124,335||121,572||143,154||141,113||142,438|
|Other (includes unmeasured impacts, e.g. couriers and taxis)||32,491||31,661||32,884||34,044||36,138|
WPP’s office energy use (megawatt hours)
We have had some success in decoupling business growth from an increase in our absolute carbon footprint. However, this remains extremely challenging. In the last five years our absolute footprint has increased by 11%, compared to a growth in headcount of 26%.
When calculated with renewable energy rated as normal grid electricity, our total carbon footprint in 2011 was 300,745 tonnes of CO2.
We report our greenhouse gas emissions to the Carbon Disclosure Project (CDP), a collaboration of institutional investors, and participate in the CDP’s Supply Chain Program. In the UK, WPP met its current obligations under the UK CRC Energy Efficiency Scheme and achieved the Carbon Trust Standard.
We aim to reduce our carbon footprint through the following initiatives:
- Information: We aim to empower our operating companies with better information and tools for managing their energy use and carbon emissions. We operate smart meters at 55 of our key locations. These meters provide detailed monthly energy-use reports which allow our operating companies to spot inefficiencies and improve their performance. We also produce an individual carbon footprint for every company annually, which is distributed to the operating company CEO.
- Buildings: We are integrating energy efficiency and other environmental considerations into our property acquisition and capital expenditure processes so that where possible any property we lease, purchase, fit out or renovate meets advanced environmental standards, such as Leadership in Energy and Environmental Design (LEED) and BRE Environment Assessment Method (BREEAM). We estimate that 7% of our total floor space is currently certified to such standards.
In 2011, our carbon footprint per person was 2.44 tonnes, down 3% on 2010 and 26% lower than 2006
- IT: We have introduced requirements to improve energy efficiency which means, for example, that all new equipment purchased must comply with our power consumption standards. Through our data centre consolidation and server virtualisation programs and the use of energy-efficient server technology, we aim to achieve up to 40% reduction in power consumption for key IT applications. Approximately 50% of our servers are now virtualised. Our managed print program, which includes reducing the number of printers in use, is helping us to reduce energy used for printing by up to 30% in each location. It covers approximately 10% of employees, but we are aiming to increase this substantially by 2015.
- Videoconferencing: We encourage our people to meet via videoconferencing, avoiding the cost and carbon impact of travelling to meetings. We have installed 75 shared high-definition videoconferencing (VC) units around the world which can be used by any WPP company. These are linked to an additional 275 VC units exclusive to individual operating companies. Videoconferences can be booked between any of the rooms and external VC locations via the Group intranet. In 2011, usage increased by 120%. Half of all calls involved external links to clients and suppliers.
- Renewable electricity: We purchase renewable electricity where we can, and regularly review electricity sourcing across all markets to identify new opportunities. Around 16% of the total electricity we purchase is generated from renewable sources. Our renewable electricity purchases reduce our total carbon footprint by 23,687 tonnes of CO2. Green electricity contracts are usually for a fixed period and may not be available at competitive prices in future. However, it is our intention to increase the percentage of electricity purchased from renewable sources to 20% by 2015.
In 2011, we offset 98,482 tonnes which is equivalent to our total emissions from air travel, by supporting renewable energy projects
- Carbon offsetting: We offset a portion of our unavoidable CO2 emissions. This means paying someone else to reduce their carbon emissions by a specified amount. In 2011, we offset 98,482 tonnes, which is equivalent to our total emissions from air travel, by supporting renewable energy projects only (we do not support forestry offset). We reviewed our offset policy in 2011 and appointed a new provider. From 2012 our operating companies will cover the cost of offset equivalent to their annual air travel emissions. This will further incentivise our companies to reduce air travel.
Resources and waste
We aim to use natural resources more efficiently, to source more sustainable office materials and to reduce waste. The key elements of our approach are summarised below and more information and data is available in our sustainability report.
- Paper: Our target is to source 50% of the paper we use for copying and printing from recycled sources by 2015. On average, in 2011, 35% of the paper purchased by WPP companies contained recycled content. We have identified preferred paper suppliers in all of our major markets (75% of headcount) which our companies are encouraged to use. All of these provide paper and paper products with recycled content. Our managed print program (see above), helps us to reduce paper use by 20-30% per location. In 2011, our total paper usage was 9,327 tonnes.
- Waste: We aim to use resources more efficiently so we produce less waste, and to reduce the amount of waste sent to landfill through increased recycling. Our key waste streams are electronic waste (including IT and mobile phones) and office consumables (including paper, card, cans, plastic bottles and toner cartridges). By the end of 2011, we had established preferred suppliers of recycling services for paper and standard office consumables, where possible, in all major markets (representing 75% of headcount). We were not able to complete the process of appointing a global IT vendor to manage our obsolete IT equipment, including laptops, desktops and servers in 2011 but plan to do so in 2012. Our goal is for obsolete IT equipment to be refurbished and sold for reuse or, if this is not possible, to be broken down for recycling. Disposal is a last resort, and must be done in compliance with local environmental regulations and data security best practice. We have established arrangements for mobile phone recycling in our offices across Europe and Asia Pacific. Data on recycling will be available in our Sustainability Report.
Many charities and non-profit organisations lack the financial resources to adequately promote their work and campaigns. WPP companies make a major contribution through pro bono work – providing creative services for little or no fee – and by negotiating free media space.
Pro bono work is often worth more than the equivalent cash donation, and is highly valued by charities because it helps them to raise awareness and money and achieve their campaign objectives. It also supports the development of our people and our companies and showcases our creative skills and ability to create compelling communications on a wide range of issues. Our people gain a breadth of experience and the chance to contribute to their communities.
We also support a range of good causes through cash donations at both the parent company and operating company levels, and by supporting employee volunteering.
In 2011, the total value of our social investment was £15.3 million compared with £14.3 million in 2010. This is equivalent to 1.5% of reported profit before tax. This figure includes direct cash donations to charities of £4.8 million and £10.5 million worth of pro bono work based on fees the organisations would have paid for our work. In addition, WPP media agencies negotiated free media space worth £12.4 million on behalf of pro bono clients, making the total social contribution £27.7 million, or 2.7% of reported profit before tax.
* Excludes free media space donations.
Examples of recent pro bono campaigns are included in our Sustainability Report.
WPP, the parent company
WPP, the parent company, supports a range of charities and non-profit organisations, with a particular focus on education, the arts and young people.
In 2011, the total value of our social investment was £15.3 million compared with £14.3 million in 2010. This is equivalent to 1.5% of reported profit before tax
Many senior WPP executives also give pro bono advice and support. Sir Martin Sorrell is an active participant in programs at the following international business schools: London Business School; IESE, Spain; Indian Business School; and Harvard Business School. He is also chairman of the Executive Committee and of the International Business Council (112 global CEOs) of the World Economic Forum and a member of the Business Council in the US. He is a member of the UK Prime Minister’s Business Advisory Group. He is a Patron of the British Museum, a member of the Corporate Advisory Group of the Tate Gallery, deputy chairman of the Mayor of Shanghai’s International Business Leaders Advisory Council, and on the International Advisory Board of The Russian Museum in St. Petersburg. He is also chairman of the Mayor of Rome's IBAC and of the Mayor of London's IBAC.