Our approach to CR reflects the decentralised structure of our Group, with many CR issues managed at operating company level. WPP the parent company complements this activity. Our Group CR function determines CR policy, monitors risks and opportunities and coordinates data collection. It helps raise awareness within our companies and provides advice and guidance on CR issues.
Corporate responsibility is included in our Group risk management processes. This includes the ‘Brand Check’ review of each of the business’ operations presented by the Group chief executive at each Board meeting.
Our approach to CR focuses on the issues that are most material (relevant and significant) to WPP. Our assessment of materiality is informed by the feedback we receive from stakeholders particularly investors, clients and our people.
Paul Richardson, the Group finance director, is the Board director responsible for CR and is chair of our Corporate Responsibility Committee. He provides an annual assessment of corporate responsibility risks and performance to the Audit Committee. From 2011, he will report CR risks and performance to the Nomination Committee.
Elements of the variable compensation for some executives are linked to CR performance.
|Issue||Materiality rating||How it is managed||Aims|
|The social and environmental impact of our work for clients.||Medium. Already an important opportunity for WPP companies and we anticipate its significance will increase as environmental regulation and consumer interest continue to grow.||Opportunities to advise clients on marketing with a social or environmental dimension are identified by our companies.||Be a centre of excellence for sustainability communication.|
|Risk to WPP’s reputation from undertaking controversial client work.||High. Significant potential impact on the reputation of the Group and/or our companies.||Upward referral within operating companies and consideration by the Group CEO and/or WPP’s ethical review committee.||Protect WPP’s reputation by taking decisions at the appropriate level.|
|Marketing ethics, compliance with marketing standards, and transparency about our marketing practices.||High. Failure to comply with marketing standards could have financial, legal and reputational impacts on the Group.||Managed by our operating companies with referral to WPP directors as necessary.||Comply with all laws and industry codes governing marketing material. Improve standards and measurement in marketing practices.|
|Privacy and data protection.||High. Increasingly important issue as we pursue our business strategy to expand our digital and insight (research) businesses. Associated with contractual, financial and legal risks to the Group.||The Group assists our operating companies in developing principles on privacy. Our key digital marketing and research companies have nominated senior executives to provide leadership on privacy and to work with other companies in the Group.||Meet best practice standards, contribute to the debate on privacy, increase transparency for consumers on how their data is obtained and used.|
|Employment, including diversity and equal opportunities, business ethics, employee development, remuneration, communication and health and safety.||High. Policies on diversity, remuneration and training affect our ability to recruit and retain talented employees in key markets.
Low. Health and safety is low risk for WPP as an office-based company.
|Human resources policies are set and implemented at operating company level. WPP’s chief talent officer assists the operating companies in attracting, developing and retaining our talent.||Support our companies’ talent recruitment and retention through our reputation for corporate responsibility. Improve standards and measurement in employment.|
|Social investment, including pro bono work, donations to charity and employee volunteering.||Low–medium. Pro bono work supports employee development and retention, and the Group’s reputation. Significant beneficial impact on charities we support.||Pro bono projects are agreed directly between WPP companies and charities. Many of our companies have long-standing relationships with their pro bono partners. WPP the parent company helps to coordinate pro bono projects involving multiple WPP companies or cross-Group collaborations.||To make a significant contribution to good causes through pro bono application of our marketing skills and direct donations to charity.|
|Climate change, including the emissions from energy used in our offices and during business travel.||Medium. Our climate strategy enables us to comply with regulation, reduce costs, and achieve our ambition to be a centre of excellence for sustainability communication. Likely to become more significant over time.||Cross-functional, Group-wide Energy Action Teams and a network of agency Climate Champions help implement our climate change strategy. Some agencies have appointed environmental managers.||Reduce per head carbon intensity to 1.2 tonnes by 2020 (from 3.3 tonnes in 2006).|
|Other environmental impacts including waste and recycling and water use.||Low. As an office-based company our resource use is relatively low.||Group strategies in place to manage waste and water use at key locations. Other impacts managed by our companies.||Establish preferred suppliers of recycling services in major markets. Reduce water consumption by 20% per capita by 2015 at 11 offices in areas of water scarcity.|
|Supply chain including supplier standards and sustainable sourcing.||Low. A relatively low risk to WPP as a service company.||WPP’s Group Procurement team use ethical and environmental criteria in the selection of preferred suppliers. Other suppliers managed at operating company level.||All new preferred suppliers to complete our CR questionnaire. Source 50% of paper from recycled sources by 2015.|