Environment

Climate change and our business

Climate change is a major threat to global social and economic development. We support urgent action to tackle climate change through the Paris Agreement. We have been working to cut our carbon footprint since 2006.

Taking action on climate change reduces risks to our business. It cuts costs associated with energy use and travel; enables us to comply with the environmental requirements in client tender processes; supports employee engagement; and strengthens our credibility as advisors to clients on sustainability communications.

Governance and risk management

Paul Richardson, Group finance director, has overall responsibility for our climate change strategy and risk management. He gives an annual assessment of sustainability risks and opportunities (including climate change) and performance to the Board.

Climate change-related risks are integrated into our overall risk management processes. Performance and updated risk implications are reviewed by the Audit Committee on a bi-annual basis. Assessment of risk is informed by feedback from investors, clients and our people. Types of risk considered include potential for increased regulatory requirements, financial risks associated with energy costs, reputational risks, physical risks (i.e. weather-related) to our offices, and the opportunities to advise our clients on sustainability strategy and communications and low-carbon products. We are analysing how the transition to a low-carbon economy in line with the Paris Agreement may affect our client base and the potential impact on WPP.

We support the Task Force on Climate-related Financial Disclosures and aim to develop our disclosures in line with the Task Force’s recommendations.

We estimate the cost to society from our emissions to be £5.3 million. See Quantifying our impacts.

Our carbon strategy

We work to reduce our carbon emissions through a focus on:

• Office energy use: Improving the energy efficiency of our buildings and IT, and consolidating our office space.
• Air travel: Reducing non-essential flights by promoting videoconferencing. We offset 100% of emissions from our business air travel.
• Renewable energy: Increasing the proportion of renewable electricity purchased.

Our target was to reduce carbon emissions to 1.8 tonnes of CO₂e per person by 2020, a 47% reduction on our 2006 baseline. We also have an annual reduction target of 4%. We use a carbon intensity target per person, as headcount is closely linked to levels of business activity and this allows us to reflect the impact of acquisitions and disposals without needing to adjust our baseline.

We have met our target ahead of schedule and will set a new target during 2018. We aim to align our target with climate science and the requirements of the Science Based Targets Initiative.

We participate in the CDP Climate Change program, a collaboration of institutional investors, and scored B in 2017 for our climate strategy and reporting (2016: A-). The drop in our rating this year is due to a lower score for our responses to the CDP questions on climate-related risk assessment. In 2018, we will be doing further work in this area, extending the scope of our risk assessment in line with the TCFD recommendations.

Decoupling emissions from business growth Index (2006 = 100)

• Emissions
• Headcount
• Revenue

Carbon intensity 2006-2017
tonnes of CO₂e

• Headcount intensity
• Revenue intensity
• Target headcount intensity

Performance in 2017

We reduced our carbon footprint per person by 8% year-on-year and by 50% against our 2006 baseline. We also reduced our carbon footprint per £million revenue by 13% year-on-year and by 67% compared with 2006.

Since 2006, we have reduced absolute carbon emissions by 39,800 tonnes, a 15% reduction.

The reduction in our carbon footprint this year is due to improvements in office energy consumption, an increase in the proportion of energy purchased from renewable sources including renewable energy certificates (RECs) and a reduction in business air travel. Changes in scope 2 carbon emissions factors reflecting a global increase in renewable energy generation have also had an impact.

Our energy use decreased by 3% year-on-year due to improvements in office energy efficiency and consolidation of office space. Since 2006, our total energy use has increased by 7% but energy use per person has fallen by 37%.

Air travel fell by 4% year-on-year (total miles travelled and miles per person). This may be due to cost controls as well as an increase in the use of our videoconferencing facilities. Since 2006, total miles travelled have increased by 32% but miles per employee has fallen by 22%.

Carbon footprint in 2017 %

Building and IT energy use

We invest in low-carbon, energy-efficient office buildings. We are also consolidating our offices, aiming to use space more efficiently and encourage collaboration between our companies. When we lease, purchase, fit out or renovate a building larger than 50,000 square feet, we require it to be certified to an internationally-recognised green building standard. This includes the US standard LEED and the UK standard BREEAM. We estimate this reduces energy use by around 21% per location.

Offices below 50,000 square feet must either be certified or assessed against our own scorecard covering energy and carbon; water; materials and waste; travel; and health & safety.

Today, over 4.7 million square feet, 20% of our total floor space, is certified to recognised standards (2016: 18%) against our target of 25% by 2020. We have made steady progress since 2007 when 1% of our floor space was certified, and have a pipeline of major projects in cities in Europe, Asia and the Americas.

We aim to design and run our offices in a way that promotes our people’s well-being, looking at factors such as indoor air quality (especially in large congested cities), thermal comfort, lighting levels, noise and acoustics. This is good for our people and can contribute to increased productivity. To improve our understanding of healthy buildings, we successfully tested the WELL Building Standard at our operating company GTB’s new offices in Shanghai. We aim to follow this standard for major projects.

Our managed print program is being deployed at 56 of our largest locations globally and is expected to reduce paper use by 15% and printer energy use by 61% at these locations.

Renewable energy

We increased the percentage of electricity purchased from renewable sources to 26% (2015: 22%), exceeding our 25% target.

In some of our locations it is not possible to purchase electricity via green-tariff contracts. As an alternative, we purchase renewable energy certificates (RECs) in the US, our largest market. Each REC purchased is equivalent to purchasing 1MWh of renewable energy and promotes investment in renewable energy generation.

We purchased 34,900 Green-e Energy certified RECs for 2017, enough to offset 49% of the electricity used by WPP companies in the US. We work with Renewable Choice Energy, a US-based business providing clean energy products and services.

Total renewable electricity purchased % breakdown by country 2017

Air travel and offsetting

We aim to reduce unnecessary business travel and use audio and videoconferencing to replace some face-to-face meetings.

Our videoconferencing network now incorporates over 700 units in 155 cities worldwide. We are integrating the system into our online collaboration platforms, enabling us to extend video services to all users within the Group.

We cannot eliminate air travel since face-to-face meetings are often essential to our work with clients. We offset 100% of our remaining air travel emissions by purchasing high-quality carbon credits. We work with South Pole Group, a company that develops emission- reduction projects. In 2017, we invested over £150,000 to support four renewable energy-generation projects in faster-growing economies. Together, these projects generate over 380m kWh of renewable electricity a year and create social benefits including around 400 direct jobs. For example, we are supporting a wind power project in India which generates 268 kWh a year. The project has created 210 jobs during construction and 150 permanent roles.

Our operating companies cover the cost of the carbon credits, based on their air travel mileage, which encourages initiatives to reduce air travel. Since 2007, we have purchased and permanently retired almost 1.4 million carbon credits.

Our carbon footprint

Environmental impact

We aim to be a low-carbon, resource efficient group. Our carbon footprint varies by market reflecting factors such as our work to improve energy efficiency in our offices; our purchase of electricity from renewable sources; and the carbon intensity of national grids. This map shows our progress in some of our key markets. The size of each pie chart is relative to the carbon footprint per person in each country.

Green buildings case study

Carbon offsetting projects 2017

Resource use and waste

We aim to use resources carefully, to reduce waste and to recycle as much as possible. To assist our companies, we have identified preferred supplier partners for recycling services in all major markets. We work with landlords on waste management in our leased properties.

In 2017, we estimate the Group generated 10,696 tonnes of waste (2016: 10,233) of which 54% was recycled. The remaining 46% was disposed of via landfill or incineration. We are working to improve our data collection on waste and recycling but have further to go to improve data quality.

Our main waste types are electronic waste and office consumables (eg paper, card, cans, plastic bottles and toner cartridges).

Paper

As an office-based business, paper use is one of our most significant resource impacts and we have set a target to purchase 80% sustainably-sourced paper by 2020. This includes paper with recycled content and paper certified to recognised sustainability standards such as FSC and PEFC. We are not on track to meet our target, sourcing 23% in 2017 (2016: 23%).

Our total paper usage in 2017 was 3,597 tonnes (2016: 4,460 tonnes). Our managed print program (see IT energy use) helps us to reduce paper use.

Our wider carbon impact

As well as managing our direct greenhouse gas emissions, we can have an influence on indirect emissions associated with our business activities – our value chain (scope 3) emissions.

To help us prioritise our efforts, we have analysed our value chain emissions using data from the UK. This showed that our main sources of greenhouse gas emissions are:

• Day-to-day activities (direct emissions): Emissions associated with running our business including office energy use, business air travel, commuting and waste. With the exception of commuting, these emissions are covered by our current carbon strategy and target.
• Goods and services we buy: Emissions associated with the goods and services we buy from supplier partners to create marketing campaigns for clients and to run our business.
• Advertising we place for clients: Emissions from the physical dissemination of advertising through press, TV, radio, internet and outdoor channels.

We are exploring how we can work with clients to reduce the carbon footprint of media campaigns.

We aim to work with supplier partners in more carbon-intensive industries to improve their reporting and performance.

Carbon emissions across our value chain %

The carbon impact of the advertising we place for clients

• Emissions from the manufacturing and printing of paper used for newspaper and billboards advertisements.
• Emissions from the energy used to transmit TV and radio advertisements, to transfer advertisement data over the internet, and to deliver newspaper and billboard advertisements.
• Emissions from the energy used to view and/or listen to the advertisement on a TV/radio, smartphone, tablet or computer.
• Emissions from the disposal of newspaper and billboard advertisements.

Carbon emissions statement 2017

CO2_e emissions breakdown (in tonnes of CO2_e)

WPP’s carbon intensity (in tonnes of CO2_e)

Office energy use (in megawatt hours)

Notes to carbon emissions statement 2017