From our CEO

To say that 2016 was a year of political uncertainty would be something of an understatement. From the Brexit referendum in the UK to the results of the US Presidential election, voters shocked the pollsters, the commentators and their political leaders. We don’t yet know what their full impact will be, but the fact that these results surprised so many indicates a worrying disconnect between leaders and many of their citizens.

From our CEO

But political uncertainty is just one of the many challenges the world faces in 2017. Nearly 11% of the world’s population still live in extreme poverty, 130 million girls are currently out of school1 and six million children die from easily preventable causes each year2. Even in affluent societies like the UK and US, many people feel they have not reaped the benefits of globalisation and technological change – a sentiment likely to intensify with many jobs at risk of being replaced by automation3.

Climate change and a growing and ageing population will make these challenges more difficult to resolve. By 2030 there will be 660 million people severely affected by climate change4. The world’s population will be approaching nine billion with increasing demand on food supplies, public services and resources.

So what does this mean for WPP and our clients? Certainly these trends will impact businesses – and for many sectors there will be significant challenges. But, more importantly, business can be a key part of the solution to these problems, and this in turn will create new commercial opportunities. It is business that will provide the much-needed innovation to enable the transition to a low-carbon economy in which we can address the needs of a growing population with fewer resources. In doing so, forward-looking brands will be able to tap into new markets and create more resilient businesses for the long term.

There is a growing movement of businesses already engaged on these issues and many of them are WPP clients. In pursuing these opportunities they are connecting to society’s rising expectations of what the role of business in society should be. Citizens believe that business has a responsibility to bring social change on important issues, and research by WPP’s Kantar Media demonstrates that consumers across markets take into account a brand’s approach to sustainability see Our thinking and insight.

Communications, with its power to change attitudes and influence behaviour, has a key role to play in helping shift society towards more sustainable development. WPP companies are already advisors to pioneering businesses looking to embed sustainability and purpose into their brands, products and marketing. Some recent examples of this work are profiled in Our client work. Clients who engaged with us on sustainability generated £1.64 billion in revenues to the Group in 2016, 11.4% of the total.

The United Nations Sustainable Development Goals provide an important framework for government agencies, civil society and the private sector to work together to end extreme poverty, inequality and climate change by 2030. During 2016, we were pleased to help launch Common Ground, a new collaboration between the six biggest advertising and marketing services groups in support of the Sustainable Development Goals. Through Common Ground we are putting aside our competitive differences and using the power of communication to help stimulate progress in tackling the world’s sustainability challenges.

WPP is focusing on the goal of gender equality, which is critical both in its own right and in terms of its knock-on benefits: achieving gender equality will also help to tackle poverty and improve education and economic growth.

We are collaborating internally and with the other groups to drive progress as well as encouraging clients to get involved. Some of the early projects are profiled on Finding Common Ground for the Global Goals and there is plenty more exciting work to come during 2017.

There is a clear-cut case for gender equality and diversity in our sector, just as there is across the world of business. We absolutely require a workforce that is diverse in all senses and able to create work that connects with the diverse global consumer base. And businesses with greater gender balance in their leadership teams perform better than the competition. We at WPP have much more to do in this respect at the most senior levels.

In our own business, diversity and inclusion has remained a focus, including through our Stella women’s network in the UK which aims to remove barriers to women’s progression. Our companies are innovating through programs such as Brave your Bias at MEC, equipping people to identify and counteract unconscious biases, and Walk the Talk, an intensive coaching program for women that began at Maxus and is being rolled out to other parts of the Group. Our senior management mentoring and development program, ‘The X Factor’, run by Charlotte Beers, the former chairman and CEO of Ogilvy & Mather and chairman of J. Walter Thompson, continues to prepare women for the next level of leadership in the Group. Women now account for 54% of our people and 34% of executive leaders.

We made progress on other issues too. We reduced our per-head carbon footprint by 10% last year and our energy use by 4%. Overall, we have cut our per-head carbon footprint by 45% since 2006.

Our future success depends on our ability to recruit and retain great people. We continue to invest in skills, offering over 6,413 internships and apprenticeships in 2016, partnering with universities and colleges and providing training worth £45.1 million for our people.

The Common Ground partnership builds on our long heritage of pro bono work – providing professional communications services for little or no fee. Pro bono campaigns enable organisations and charities working in areas such as the environment, human rights and anti-poverty to raise awareness and funds, recruit new members and bring about positive change. Our social investment, including pro bono work and charitable donations, was worth £19.5 million in 2016 - equivalent to 1.03% of reported profit before tax. Our companies also negotiate free media space for charity campaigns. This was worth £22.8 million in 2016, bringing our total social contribution to £42.3 million - equivalent to 2.23% of reported profit before tax.

Political attitudes to issues of sustainability are changing – and not necessarily always for the better – but at WPP we will continue to make them a priority in 2017 and beyond. I look forward to updating you on our progress.

Sir Martin Sorrell
Group chief executive
[email protected]

1 UNESCO Institute for Statistics and the Global Education Monitoring Report –

2 Unicef –

3 Citi and the Oxford Martin School at the University of Oxford –

4 Global Humanitarian Forum –

2016 highlights

45%
reduction in carbon emissions per person since 2006

6,413 
paid internships and apprenticeships

34%
of executive leaders are women

£42.3m
total social contribution