WPP spends around £1.9 billion ($3 billion) with suppliers each year. We want to do business with suppliers that meet high standards on the environment and employment practices. We are committed to managing CR risks in our supply chain, both for ourselves and for our clients.
We focus our CR efforts on preferred suppliers that provide centrally purchased goods and services such as IT, travel, telecommunications, professional services (e.g. consultancy and recruitment) and facilities management. We spend around $1.5 billion with these suppliers each year and contracts are negotiated by WPP Commercial & Procurement Services. The size of these contracts, and the fact that they are negotiated centrally, means that we can use our commercial influence to bring improvements.
We also spend around $1.5 billion on goods and services for use in client work, such as film and print production, post production and market research services. These contracts are usually negotiated by individual operating companies. Suppliers of these goods and services are currently not included in our Group CR program, although individual operating companies may engage these companies on CR.
Selecting preferred suppliers
WPP’s Global Procurement Policy contains ethical and environmental criteria which our Group procurement teams use in supplier selection and management.
We thoroughly evaluate companies against a set of business requirements before they can become a preferred supplier. These include assurance of supply, quality, service, cost, innovation and CR. We do not have a standard weighting for each criteria and they may vary from project to project.
As part of this process we ask potential suppliers to complete a simple five-point CR questionnaire to raise awareness and make our requirements clear:
- Policy Does your company have a CR policy?
- Responsibility Is a senior executive (or executives) responsible for CR performance? Does your company have a CR manager or equivalent?
- Key issues Please identify the environmental issues most relevant to your company. Please identify the social issues most relevant to your company (social issues include employment, health & safety and community).
- Reporting Does your company publish a CR report?
- Supply chain Does your company have a process for implementing CR standards in its supply chain?
In 2009, all existing and new preferred suppliers in Asia Pacific, France, Spain, the UK and US completed our CR questionnaire. In the US we also incorporate CR criteria into our standard Group supply contract terms and conditions.
Monitoring and awareness
CR is included in the personal objectives for our regional heads of procurement and purchasing managers in our major markets. Objectives are aligned with our two main themes of supplier selection and managing supply chain risk. They also cover green electricity purchasing in line with our climate change strategy.
We raise awareness of CR through our regular cross-Group sourcing team activities and Buy-in newsletter, and review progress through our procurement reporting process. This includes quarterly updates from regional procurement teams to the head of Commercial & Procurement Services, and reviews by WPP’s procurement leadership team (our global and regional heads of procurement). Regular updates are also provided to the WPP Board of Directors.