How we manage risk and opportunity

Social, environmental and ethical risks are considered in the Group’s risk identification, management and monitoring processes. This includes: an annual Board assessment of sustainability risks and performance (presented by Paul Richardson); our Brand Check process – a review of WPP business operations and risk profiles (presented by Group chief executive Sir Martin Sorrell at Board meetings); selected internal audits covering sustainability risks; and due diligence for new acquisitions.

To identify our sustainability priorities and to support our risk management process, we have a structured materiality process that incorporates both internal and external stakeholder feedback. This process looks at the significance for WPP of a range of issues, and takes into account both the positive and negative impacts of our business, and the risks and opportunities created by sustainability issues for WPP. Read more in our Sustainability Report.

This table summarises our approach to managing sustainability-related risks and opportunities:

Risk/Opportunity Materiality rating Reason Our response
Damage to WPP's reputation from unethical business practices. High Significant potential impact on the reputation of the Group and/or our companies. Code of Business Conduct establishes ethical standards for all WPP  companies – senior executives sign annually to confirm compliance. All employees complete business ethics and anti-bribery and corruption training. Right to Speak reporting helpline established.
Damage to WPP's reputation from unethical business practices. High. Significant potential impact on the reputation of the Group and/or our companies. Upward referral process established and communicated via the WPP Policy Book and ethics training. WPP's Ethics Committee discusses cases of concern and identifies new risk areas.
Compliance with privacy and data protection regulations and best practices. High. Increasingly important issue as we expand our digital and insight businesses. Associated with contractual, financial, legal and reputational risks, as well as opportunities to work with clients on these issues. All WPP companies implement the WPP Data Code of Conduct. We use our data health tracker to measure progress and employees complete privacy training. These issues are also managed and monitored at operating company level.
Marketing compliance High. Failure to comply with marketing standards could impact the Group's reputation or its relationship with clients. Managed by our operating companies with referral to WPP Code of Business Conduct and WPP directors as necessary.

Employment including diversity and equal opportunities, employee development, remuneration, and communication.  High
Our approach to diversity, remuneration and training affects our ability to recruit and retain talented employees in key markets. Failing to meet standards on diversity and gender could impact the perception of the Group and quality of work.  Human resources policies are set by our operating companies. WPP’s chief talent officer assists our companies in attracting, developing and retaining our talent and sharing best practice on issues such as recruitment, remuneration, engagement, diversity and training. 
The social and environmental impact of our work for clients  Medium-high
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. The parent company supports the development of sustainability expertise and encourages collaboration between our companies. 
Our impact on human rights including how we treat our people, how we manage human rights risks in our supply chain and the potential human rights impact of the work we do for clients.  Medium-high
We need to manage potential human rights risks in relation to our own employees, our suppliers and client work, and also have an opportunity to promote human rights through our pro bono work.  We are developing a Human Rights Policy Statement to provide guidance for our companies on this issue. 
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 brings credibility to our sustainability work with clients. Potential negative reputation and cost impact if we fail to meet our climate target.  Cross-functional, Group-wide Environmental Action Teams implement our climate change strategy. Some companies have appointed environmental managers. 
Supply chain, including supplier standards and sustainable sourcing.  Low-medium
Our approach to supply chain management is of growing interest to clients.  WPP’s Procurement Leadership Team manages sustainability in our supply chain. Suppliers are assessed on sustainability criteria and must comply with the WPP Code of Business Conduct. Some suppliers are managed at operating company level. 
Social investment, including pro bono work, donations to charity, employee volunteering and free media space negotiated for pro bono clients.  Low-medium
Pro bono work supports employee development and retention, and the Group’s reputation. Significant beneficial impact on the charities we support.  Pro bono projects are agreed directly between WPP companies and charities. WPP, the parent company, helps to co-ordinate pro bono projects involving multiple WPP companies or cross-Group collaborations. 
Health and Safety  Low
Health and safety is relatively low risk for WPP as an office-based company.  Our companies operate their own health, safety and wellbeing management systems, which may include employee training, audits and risk assessments. 
Other environmental impacts including the resources we use (e.g. paper and water) and the waste we create.  Low
As an office-based company our resource use is relatively low.  Group strategies in place to manage paper sourcing and use, waste management, and water use at key locations. Other impacts managed by our companies. 

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