Managing sustainability in our supply chain
WPP spends over $9 billion with suppliers of goods and services each year, related to both our own business as well as the work we do for our clients. We aim to work with suppliers that protect the environment and meet high standards on employment practices. We are committed to managing sustainability 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. See Resource use and waste.
Managing sustainability in our supply chain is the responsibility of the global Procurement Leadership Team (PLT), who make sure that sustainability initiatives and policies are communicated through local procurement teams in our countries and operating companies. Sustainability is included in the personal objectives for all PLT members. Objectives are aligned with our three main themes of supplier selection, managing supply chain risk and helping operating companies to integrate sustainability into their local procurement. We raise awareness through quarterly reporting, our regular cross-Group sourcing team activities and newsletters.
Our supply chain
We currently focus most of our sustainability efforts on WPP preferred suppliers that provide goods and services to our operating companies such as IT, travel, telecommunications, professional services (for example, consultancy and recruitment) and facilities management. We spend over $4 billion with these suppliers each year and many contracts are negotiated centrally by WPP Commercial & Procurement Services.
For goods and services used in client work, contracts are usually smaller and negotiated by budget holders within our individual operating companies. Suppliers of these goods and services are generally not directly included in our Group sustainability program, although individual operating companies are encouraged to apply sustainability approaches which are consistent with Group best practice. Where WPP’s procurement team leads projects to select preferred suppliers for client work, sustainability 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 sustainability. 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 sustainability questionnaire to raise awareness and make our requirements clear:
- Policy. Does your company have a sustainability policy?
- Responsibility. Is a senior executive (or executives) responsible for sustainability performance? Does your company have a sustainability 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 sustainability report?
- Supply chain. Does your company have a process for implementing sustainability standards in its supply chain?
The answers help us to evaluate a potential supplier’s approach to sustainability. In 2011, all new preferred Group suppliers completed our sustainability questionnaire.
During 2012, we are improving our data collection systems which will enable us to better track spending with third-party suppliers in our operating companies. In particular, this will help us to understand which of our operating companies are sourcing from our preferred suppliers. We also intend to pilot a new tracking and reporting system for diverse suppliers in the US. In addition, we are reviewing our approach to supplier selection and reporting of sustainability metrics, with a view to implementing new policies in this area in the second half of the year.