Governance & management

WPP’s Sustainability Committee

Paul Richardson, WPP’s Group finance director, is the Board director responsible for corporate sustainability. He chairs our Sustainability Committee made up of senior representatives from Group functions, which meets annually on our Sustainability Strategy Day to review progress and discuss risks and opportunities. Paul Richardson shares outcomes from this meeting with WPP’s Nomination and Governance Committee and Board of Directors.

Our central sustainability team sets our overarching strategy and policies, monitors performance data and supports our operating companies in managing sustainability issues. It communicates our progress internally and externally and collaborates with other Group functions (such as our talent team, legal, real estate, IT and procurement). The head of sustainability reports directly to the Group finance director.

We track our progress using a set of social and environmental performance indicators. Data is collected quarterly through our Group financial reporting system. Our carbon and employment data is verified by Bureau Veritas, an independent assurance provider.

How we manage sustainability issues

How we manage sustainability issues: The parent company is responsible for setting strategy, policy principles and guidance for the operating companies, and public reporting. The Operating companies implement Group policies and guidance, report to the parent company on progress and set more detailed/relevant policies. Sustainability issues are included in the Brand Check process.

Risk management

Social, environmental and ethical risks are considered in the Group’s risk identification, management and monitoring processes. This includes:

  • Annual Board assessment of sustainability risks and performance (presented by Paul Richardson).
  • 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.
  • Due diligence for new acquisitions, see below.

See our Annual Report for more detail on our risk management process, our audit process and a list of our principal risks.

Acquisitions and sensitive countries

Our due diligence process for acquisitions and expansion into new markets includes a review of risks relating to bribery and corruption or ethical issues associated with client work. We take steps to ensure that acquired businesses embed our policies and undertake our ethics training.

We use a variety of sources to understand and manage any risks associated with different countries of operation, the Transparency International Corruption Index, Human Rights Watch country reports and any relevant governmental guidance.

We comply with all relevant sanctions regimes.

Human rights

Human rights are relevant to our business in a number of ways, including how we treat our people, how we manage human rights risks in our supply chain and the potential impact of the work we do for clients on human rights. We aim to respect human rights wherever we operate in line with the principles of the UN Universal Declaration on Human Rights, the International Labour Organisation’s fundamental conventions on core labour standards and the UN Guiding Principles on Business and Human Rights.

Plans for 2015

To explain our approach we are developing a Human Rights Policy Statement which will be available on our website. We are integrating human rights into our ethics training and due diligence processes. Our companies create pro bono campaigns for several human rights organisations. See our Pro Bono Book for examples.

Stakeholder engagement

We communicate our progress to stakeholders and seek their views on our performance. This helps us to improve how we work and to identify risks and opportunities for the Group. We prioritise engagement with our people, clients and investors, the stakeholders who have the most influence on our business success. We share stakeholder feedback on important issues with the executive team and Board of Directors, via our Group finance director.

We engaged with a number of investors, rating agencies and benchmarking organisations on sustainability during 2014. These included BNP Paribas, EIRIS, FTSE4Good, MSCI, Oekom, RobecoSAM, Sustainability Index, Sustainalytics, Trucost, and Vigeo. To raise investor awareness of our activities, we submit this section of our Annual Report for share owner voting at our AGM.

Our score from the CDP climate change program

We are included in the DJSI World and Europe Indices and the FTSE4Good Index and the Ethibel Sustainability Index Excellence Global and Europe. We participate in the Carbon Disclosure Project (CDP) and received a score of 98B in 2014, an increase from 95B in 2013. We are listed in the CDP Climate Disclosure Leadership Index.

We update clients on our approach to sustainability, particularly during tender processes, and we partner with clients on issues of mutual interest. For example, we are sharing our recent analysis of the carbon footprint of marketing campaigns with key clients.

We communicate with our people through regular meetings, employee surveys (conducted at operating company level), the Group intranet and regular newsletters and publications. We distribute our Sustainability Report to over 2,000 senior executives and employees.

In 2014, we carried out a formal materiality assessment, through which we sought feedback on our approach and priorities from investors, clients, sustainable business experts and NGOs working in the areas of business ethics and human rights as well as WPP senior management. The results have been communicated to the WPP Board and used to prioritise the issues we cover in our reporting and to help us identify areas for further action. See the results of our materiality assessment.

Corporate governance

The WPP Board of Directors is dedicated to the principles of corporate governance defined in the UK Corporate Governance Code. It also upholds our commitment to complying with the laws, regulations and guidelines that apply in the countries where we operate, such as the US Sarbanes-Oxley Act 2002, the NASDAQ rules and their related regulations. We seek to respect the guidelines issued by institutional investors and their representative bodies, wherever this is practicable.

WPP operates a system of internal control, which is maintained and reviewed in accordance with the UK Corporate Governance Code and the Turnbull Report guidance, as well as the relevant provisions of the Securities Exchange Act of 1934.

Tax policy

Tax revenues sustain national economies. We recognise our obligation to pay the amount of tax legally due in the territory in which the liability arises and comply with all legal requirements. At the same time we have an obligation to maximise share owner value, which includes controlling our overall liability to taxation. However, we do not condone either personal or corporate tax evasion under any circumstances.

Our aim is to have a constructive relationship with tax authorities. Where disputes arise with tax authorities, in areas of doubt or where legal interpretations differ, we aim to tackle the matter promptly and resolve it in a responsible manner.

The Group paid corporation taxes of £289.9 million in 2014, an increase on £273 million due to higher profits earned during the year. Estimated employer and employee taxes (e.g. payroll and social security-related taxes) paid during 2014 were £857.7 million, compared with £850 million in 2013.

The WPP Audit Committee, which is made up of independent non-executive directors, is responsible for overseeing our policies on tax and regularly reviews our tax strategy.

Lobbying and political contributions

WPP does not make political contributions from corporate resources with the occasional exception of very small, lawful contributions to local candidates or parties in the US or UK.

In countries where it is consistent with applicable law, individuals working at WPP make personal voluntary political contributions directly to candidates for office. Several of our businesses, including Burson-Marsteller, Glover Park Group, Hill+Knowlton Strategies, Prime Policy Group and Wexler & Walker, also maintain political action committees (PACs) which accept voluntary donations from employees to support political candidates.

On occasion, WPP engages in the debate on public policy issues relevant to our business, sometimes operating through our public affairs companies. Our companies also contribute to public debate in areas where they have expertise and a special interest – our digital and research companies, for example, get involved on privacy and data protection issues.

Several WPP companies have public affairs practices that lobby governments on behalf of clients.

Read more about our Code of Conduct – the standards by which we conduct ourselves corporately and individually at:

Read more about our Sustainability Policy – the issues we see as most relevant to WPP and the principles we apply to them at: