WPP spends around $6 billion with suppliers of goods and services each year. We aim to do business with suppliers that protect the environment and meet high standards on employment practices. We are committed to managing CR risks in our supply chain, both for ourselves and for our clients.
We also look for opportunities to increase the proportion of environmentally-preferable products and services we buy and/or reduce demand. More detail can be found in Sustainable sourcing.
Our supply chain
We currently focus our CR efforts on preferred suppliers that provide centrally purchased goods and services such as IT, travel, telecommunications, professional services (for example, consultancy and recruitment) and facilities management. We spend around $3 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 about CR improvements.
For goods and services used in client work, contracts are more usually negotiated by our individual operating companies. Suppliers of these goods and services are generally not included in our Group CR program, although individual operating companies may engage these companies on CR. Where WPP Procurement lead projects to select preferred suppliers for client work, CR selection criteria are applied.
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 evaluate companies thoroughly 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 which 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?
The answers help us to evaluate a potential supplier’s approach to CR. In 2010 all new preferred Group suppliers in Asia Pacific, EMEA, the UK and US completed our CR questionnaire.
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 three main themes of supplier selection, managing supply chain risk and helping operating companies to integrate CR into their local procurement. We raise awareness of CR through quarterly reporting, our regular cross-Group sourcing team activities and newsletters.