UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
____________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of March 2022
Commission File Number: 001-38303
______________________
WPP plc
(Translation of registrant's name into English)
________________________
Sea Containers, 18 Upper Ground
London, United Kingdom SE1 9GL
(Address of principal executive offices)
_________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form
20-F X Form 40-F
___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an
attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ___
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report
or other document that the registrant foreign private issuer must
furnish and make public under the laws of the jurisdiction in which
the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form
6-K submission or other Commission filing on EDGAR.
Forward-Looking Statements
In
connection with the provisions of the Private Securities Litigation
Reform Act of 1995 (the “Reform Act”), WPP plc and its
subsidiaries (the “Company”) may include
forward-looking statements (as defined in the Reform Act) in oral
or written public statements issued by or on behalf of the Company.
These forward-looking statements may include, among other things,
plans, objectives, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. As such, actual results or outcomes may
differ materially from those discussed in the forward-looking
statements. Important factors that may cause actual results to
differ include but are not limited to: the unanticipated loss of a
material client or key personnel, delays or reductions in client
advertising budgets, shifts in industry rates of compensation,
regulatory compliance costs or litigation, natural disasters or
acts of terrorism, the Company’s exposure to changes in the
values of major currencies other than the UK pound sterling
(because a substantial portion of its revenues are derived and
costs incurred outside of the United Kingdom) and the overall level
of economic activity in the Company’s major markets (which
varies depending on, among other things, regional, national and
international political and economic conditions and government
regulations in the world’s advertising markets). In addition,
you should consider the risks described in Item 3D, captioned
“Risk Factors” in the Company’s Form 20-F for the
year ended 31 December 2019, which could also cause actual results
to differ from forward-looking information. In light of these and
other uncertainties, the forward-looking statements included in the
oral or written public statements should not be regarded as a
representation by the Company that the Company’s plans and
objectives will be achieved.
The
Company undertakes no obligation to update or revise any such
forward-looking statements, whether as a result of new information,
future events or otherwise.
EXHIBIT INDEX
|
Exhibit No.
|
Description
|
|
1
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Annual Report 2021 and AGM 2022 dated 31 March 2022, prepared by
WPP plc.
|
|
FOR
IMMEDIATE RELEASE
|
31
March 2022
|
WPP
PLC (“WPP” or “the Company”)
Publication of Annual Report 2021, Sustainability Report and 2022
Notice of Annual General Meeting
WPP has today published on its website its Annual Report for
the year ended 31 December 2021 ('Annual Report 2021',
www.wpp.com/investors/annual-report-2021)
together with its Sustainability Report. WPP has also today
published its 2022 Notice of Annual General Meeting (the '2022 AGM
Notice', www.wpp.com/investors/shareholder-centre/shareholder-meetings),
which will be distributed to shareholders
shortly.
The
Company’s AGM will be held on 24 May 2022 at 2.00pm at Sea
Containers House, 18 Upper Ground, London SE1 9GL, with facilities
to follow the business of the AGM virtually.
In
compliance with 9.6.1 of the Listing Rules, copies of the
Annual Report 2021 and 2022 AGM
Notice will be submitted to the UK Listing
Authority and will shortly be available for inspection at the
National Storage Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
A hard copy version of the Annual Report 2021 will be sent to those
shareholders who have elected to receive paper communications on or
about 19 April 2022.
The
information included in the unaudited preliminary results
announcement released on 24 February 2022, together with the
information in the Appendices to this announcement which is
extracted from the Annual Report 2021, constitute the materials
required by the FCA's Disclosure Guidance and Transparency Rule
6.3.5R. This announcement is not a substitute for reading the
Annual Report 2021 in full. Page and note references in the
Appendices below refer to page and note references in the Annual
Report 2021.
Balbir
Kelly-Bisla
Company
Secretary
Further information
|
Chris
Wade, WPP
Richard
Oldworth,
Buchanan
Communications
|
+44
(0)20 7282 4600
+44
(0)20 7466 5000
|
About WPP
WPP is the creative transformation company. We use the power of
creativity to build better futures for our people, planet, clients
and communities. For more information, visit www.wpp.com.
APPENDIX A: PRINCIPAL RISKS AND UNCERTAINTIES
PRINCIPAL
RISKS
The Board has
carried out a robust assessment of the principal risks and
uncertainties affecting the Group and the markets we operate in and
strategic decisions taken by the Board as at 31 December 2021 and
up to the date of this report including any adverse effects of the
Covid-19 pandemic and the geopolitical situation following the
Russian invasion of Ukraine and which are described in the table on
the following pages.
COVID-19
PANDEMIC
Risk
definition
The extent of the
continued impact of the Covid-19 pandemic on our business will
depend on numerous factors that we are not able to accurately
predict, including the duration and scope of the pandemic, any
existing or new variants, government actions to mitigate the
effects of the pandemic and the intermediate and long-term impact
of the pandemic on our clients’ spending plans.
Potential
impact
The Covid-19
pandemic and any new variants and the measures to contain its
spread may have a continuing adverse effect on our business,
revenues, results of operations and financial condition and
prospects.
How
it is managed and reflected in our strategic
priorities
A strong balance
sheet, supported further by action to maintain liquidity including,
if needed, the suspension of share buybacks, dividends and
acquisitions, cost reduction and cash conservation measures,
savings on property and IT capex. Constant monitoring of working
capital position.
STRATEGIC
RISKS
Risk
definition
The failure to
successfully complete the strategic plan updated in December 2020
to return the business to sustained growth and simplify our
structure.
Potential
impact
A failure or delay
in implementing or realising the benefits from the transformation
plan and/or returning the business to sustained growth may have a
material adverse effect on our market share and our business,
revenues, results of operations, financial condition or
prospects.
How
it is managed and reflected in our strategic
priorities
Board oversight of
the implementation of the strategic plan and regular briefings on
the Group’s response to the pandemic and the economic and
geopolitical consequences of the invasion of Ukraine by
Russia.
The Executive
Committee regularly reviews progress against the strategic plan and
actions required to deliver against the plan and convenes regularly
to discuss the Group’s response to and implementation of the
measures highlighted above to mitigate the impact of the pandemic
and the economic and geopolitical consequences of the invasion of
Ukraine by Russia on the Group’s operations, people, clients
and financial condition.
The focus on
managing cost and changes in ways of working have accelerated
aspects of the transformation as we move faster towards a
simplified company structure and enhanced use of technology by our
people as a consequence of adapting to remote working.
OPERATIONAL
RISKS - CLIENTS
Risk
definition
We compete for
clients in a highly competitive industry which has been evolving
and undergoing structural change. Client loss to competitors or as
a consequence of client consolidation, insolvency or a reduction in
marketing budgets due to recessionary economic conditions triggered
by the pandemic, the invasion of Ukraine by Russia, or a
geopolitical change or shift in client spending would have a
material adverse effect on our market share, business, revenues,
results of operations, financial condition and
prospects.
Potential
impact
The competitive
landscape in our industry is constantly evolving and the role of
more traditional services and operators in our sector is being
challenged. Competitors include multinational advertising and
marketing communication groups, marketing services companies,
database marketing information and measurement and professional
services and consultants and consulting internet
companies.
Client contracts
can generally be terminated on 90 days’ notice or are on an
assignment basis and clients put their business up for competitive
review from time to time. The ability to attract new clients and to
retain or increase the amount of work from existing clients may be
impacted if we fail to react quickly enough to changes in the
market and to evolve our structure, and by loss of reputation, and
may be limited by clients’ policies on conflicts of
interest.
There are a range
of different impacts on our clients globally as a consequence of
the pandemic and the geopolitical and economic consequences of the
invasion of Ukraine and imposition of sanctions. In the past,
clients have responded to weak economic and financial conditions by
reducing or shifting their marketing budgets which are easier to
reduce in the short term than their other operating
expenses.
How
it is managed and reflected in our strategic
priorities
The transformation
plan updated in December 2020. Emphasis on providing faster, more
agile and more effectively integrated solutions for our
clients.
Simplifying our
organisational structure such as the reduction in the number of
legal entities in the Group as part of an ongoing programme and the
disposal of non-core minority holdings.
Launch of further
campus co-locations including in London, Warsaw and Milan.
Embedding data and technology more deeply into our offer to
clients.
Board focus on the
importance of a positive and inclusive culture across our business
to attract and retain talent and clients. Team focused on culture,
diversity and inclusion across the Group and the WPP Global
Inclusion Council and commitments to anti-racism.
Continuous
improvement of our creative capability and reputation of our
businesses.
The development and
implementation of senior leadership incentives to align more
closely with our strategy and performance.
Business review at
every Board, management and Executive Committee meeting to identify
client loss. Monthly updates to the management team on the status
of the Group’s major clients and upcoming pitches for
potential new clients. Continuous engagement with our clients and
suppliers through this period of uncertainty and reduction in
economic activity.
OPERATIONAL
RISKS - CLIENTS
Risk
definition
We receive a
significant portion of our revenues from a limited number of large
clients and the net loss of one or more of these clients could have
a material adverse effect on our prospects, business, financial
condition and results of operations.
Potential
impact
A relatively small
number of clients contribute a significant percentage of our
consolidated revenues. Our ten largest clients accounted for 17% of
revenue less pass-through costs in the year ended 31 December 2021.
Clients can reduce their marketing spend, terminate contracts or
cancel projects on short notice. The loss of one or more of our
largest clients, if not replaced by new accounts or an increase in
business from existing clients, would adversely affect our
financial condition.
How
it is managed and reflected in our strategic
priorities
Increased
flexibility in the cost structure (including incentives,
consultants and freelancers).
Business review at
every Board meeting and regular engagement at executive level with
our clients.
A monthly new and
existing business tracker is reviewed by the Executive Committee on
a monthly basis with regular updates to the Board.
PEOPLE,
CULTURE AND SUCCESSION
Risk
definition
Our performance
could be adversely affected if we do not react quickly enough to
changes in our market and fail to attract, develop and retain key
creative, commercial, technology and management talent, or are
unable to retain and incentivise key and diverse
talent.
Potential
impact
We are highly
dependent on the talent, creative abilities and technical skills of
our people as well as their relationships with clients. We are
vulnerable to the loss of people to competitors (traditional and
emerging) and clients, leading to disruption to the
business.
How
it is managed and reflected in our strategic
priorities
Our incentive plans
are structured to provide retention value, for example by paying
part of annual incentives in shares that vest two years after grant
date.
We are working
across the businesses to embed collaboration and investing in
training and development to retain and attract talented people. The
investment in co-located campus properties is increasing the
co-operation across our companies and provides extremely attractive
and motivating working environments.
Succession planning
for the Chief Executive Officer, the Chief Financial Officer and
key executives of the Company is undertaken by the Board and
Nomination and Governance Committee on a regular basis and a pool
of potential internal and external candidates are identified in
emergency and planned scenarios.
The Compensation
Committee provides oversight for the Group’s incentive plans
and compensation. Our first priority during the Covid-19 pandemic
has been the safety and welfare of our people and seeking to
protect them as much as possible as well as maintaining the ability
to serve clients and win new business as markets
recover.
CYBER
AND INFORMATION SECURITY
Risk
definition
We are undertaking
a series of IT transformation programmes to support the
Group’s strategic plan and a failure or delay in implementing
the IT programmes may have a material adverse effect on its
business, revenues, results of operations, financial conditions or
prospects. The Group is reliant on third parties for the
performance of a significant portion of our worldwide information
technology and operations functions. A failure to provide these
functions could have an adverse effect on our business. During the
transformation, we are still reliant on legacy systems which could
restrict our ability to change rapidly.
The Group has in
the past and may in the future experience a cyber-attack which
results in disruption to one or more of our businesses or the
security of data being compromised.
Potential
impact
We may be subject
to investigative or enforcement action or legal claims or incur
fines, damages, or costs and client loss if we fail to adequately
protect data. A system breakdown or intrusion could have a material
adverse effect on our business, revenues, results of operations,
financial condition or prospects and have an impact on long-term
reputation and lead to client loss.
The imposition of
sanctions following the Russian invasion of Ukraine has triggered
an increase in cyber attacks generally.
How
it is managed and reflected in our strategic
priorities
The IT
transformation programmes are underpinning our strategic plan and
enhance our data security.
There is a rolling
programme to retire servers across the Group and move to cloud
solutions.
We monitor and log
our network and systems and keep raising our people’s
security awareness through our WPP Safer Data training and mock
phishing attacks. Heightened focus on monitoring our network and
systems and raising awareness of the potential for phishing and
other cyber-attacks during the period of remote working and the
geopolitical situation and an increased focus on our control
environment.
FINANCIAL
RISKS – ECONOMIC AND CREDIT RISK
Risk
definition
Economic conditions
have a direct impact on our business, results of operations and
financial position. Adverse economic conditions, including those
caused by the pandemic, invasion of Ukraine by Russia, severe and
sustained inflation in key markets where we operate, supply chain
issues affecting the distribution of our clients’ products
and/or disruption in credit markets, pose a risk our clients may
reduce, suspend or cancel spend with us or be unable to satisfy
obligations. We are subject to credit risk through the default of a
client or other counterparty.
Potential
impact
We are generally
paid in arrears for our services. Invoices are typically payable
within 30 to 60 days.
We commit to media
and production purchases on behalf of some of our clients as
principal or agent depending on the client and market
circumstances. If a client is unable to pay sums due, media and
production companies may look to us to pay those amounts and there
could be an adverse effect on our working capital and operating
cash flow.
How
it is managed and reflected in our strategic
priorities
Evaluating and
monitoring clients’ ongoing creditworthiness and in some
cases requiring credit insurance or payments in
advance.
We are working
closely with our clients during this period of economic uncertainty
to ensure timely payment for services in line with contractual
commitments and with vendors to maintain the settlement flow on
media.
Our treasury
position and compliance with lending covenants is a recurring
agenda item for the Audit Committee and Board.
Increased
management processes to manage working capital and review cash
outflows and receipts during the Covid-19 pandemic and as a
consequence of the invasion of Ukraine by Russia.
FINANCIAL
RISKS – INTERNAL CONTROLS
Risk
definition
Our performance
could be adversely impacted if we failed to ensure adequate
internal control procedures are in place.
We have previously
identified material weaknesses in our internal control over
financial reporting. If we failed to properly remediate these
material weaknesses or new material weaknesses are identified, they
could adversely affect our results of operations, investor
confidence in the Group and the market price of our ADSs and
ordinary shares.
Potential
impact
Failure to ensure
that our businesses have robust control environments, or that the
services we provide and trading activities within the Group are
compliant with client obligations, could adversely impact client
relationships and business volumes and revenues.
As disclosed in our
Form 20-F, in connection with the Group’s assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2020, we previously identified material weaknesses in
our internal control over financial reporting with respect to
management’s review of the impairment assessment of
intangible assets and goodwill (specifically the selection of
appropriate discount rates for use in the impairment calculations,
the determination of the appropriateness of the cash flow periods
and associated discounting and determination of the assumptions in
respect of working capital cash flows, in each case used in the
impairment calculation); the design and implementation of internal
controls to ensure that the complex accounting matters and
judgements are assessed against the requirements of IFRS and to
reflect changes in the applicable accounting standards and
interpretations or changes in the underlying business on a timely
basis; and our net investment hedging arrangements (specifically
concerning the eligibility of hedging relationships under IFRS, the
adequacy and maintenance of contemporaneous documentation of the
application of hedge accounting, and the review of the impact of
changes in internal financing structures on such hedging
relationships). We implemented remedial measures during 2021 and
believe that we have remediated each of these material weaknesses
such that our internal control over financial reporting is
effective as at 31 December 2021.
If
the remedial measures were ultimately insufficient to address the
material weaknesses, or if additional material weaknesses in
internal control are discovered or occur in the future, our ability
to accurately record, process and report financial information and,
consequently, our ability to prepare financial statements within
required time periods, could be adversely affected. In addition,
the Group may be unable to maintain compliance with the federal
securities laws and NYSE listing requirements regarding the timely
filing of periodic reports. Any of the foregoing could cause
investors to lose confidence in the reliability of our financial
reporting, which could have a negative effect on the trading price
of the Group’s ADSs and ordinary shares.
How
it is managed and reflected in our strategic
priorities
Transparency and
contract compliance are embedded through the networks and
reinforced by audits at a WPP and network level.
Regular monitoring
of key performance indicators for trading are undertaken to
identify trends and issues. An authorisation matrix on inventory
trading is agreed with the Company and the Audit
Committee.
In 2021, our new
controls function continued to review and enhance controls across
the Group, under the direction of our Global Director of Risk and
Controls. As part of this effort, we significantly enhanced the
staffing, capabilities and resources of our technical accounting
function, which supported the retrospective review efforts and will
continue to provide ongoing support in regards to complex
accounting matters and judgment and changes in accounting
standards.
Management is
committed to maintaining a strong internal control environment,
with appropriate oversight from our Audit Committee. We have made
significant enhancements to our controls through the implementation
of the remediation and continue to evaluate further opportunities
to improve our control environment. We have engaged an independent
valuation specialist, on an on-going basis with oversight by
management, to assist us as an integral part of the discount rate
and cash flow determination process in the impairment assessment of
intangible assets and goodwill.
This has included
such items as updating our discount determination methodology for a
current market participant approach; enhancing the level of review
and controls related to the selection of the variables underpinning
the discount rate calculation, the discount rate methodology and
annual refresh; and implementing additional validation controls and
additional reviews of the selection of cash flow periods and net
working capital assumptions. In the case of complex accounting
matters and hedging arrangements, we performed a comprehensive
retrospective review of our controls and procedures and implemented
enhanced periodic controls into our control framework and have
engaged outside advisors with specialist expertise in the
respective subject matter areas to assist with the performance of
the comprehensive retrospective review.
COMPLIANCE
RISKS – DATA PRIVACY
Risk
definition
We are subject to
strict data protection and privacy legislation in the jurisdictions
in which we operate and rely extensively on information technology
systems. We store, transmit and rely on critical and sensitive data
such as strategic plans, personally identifiable information and
trade secrets:
-
Security of this
type of data is exposed to escalating external threats that are
increasing in sophistication, as well as internal data
breaches
-
Data transfers
between our global operating companies, clients or vendors may be
interrupted due to changes in law (eg EU adequacy decisions, CJEU
Schrems II decision)
Potential
impact
We may be subject
to investigative or enforcement action or legal claims or incur
fines, damages, or costs and client loss if we fail to adequately
protect data or observe privacy legislation in every
instance:
-
The Group has in
the past and may in the future experience a system breakdown or
intrusion that could have a material adverse effect on our
business, revenues, results of operations, financial condition or
prospects
-
Restrictions or
limitations on international data transfers could have an adverse
effect on our business and operations
How
it is managed and reflected in our strategic
priorities
We develop
principles on privacy and data protection and compliance with local
laws. We also monitor pending changes to regulations and identify
changes to our processes and policies that would need to be
implemented. In the case of data transfers, we also identify
alternative approaches, including using other permitted transfer
mechanisms, in order to limit any potential disruption (eg SCCs
instead of Privacy Shield following the CJEU Schrems II
decision).
We implemented
extensive training ahead of GDPR and CPPA implementation and the
roll-out of toolkits to assist our people to prepare for
implementation and will do the same as new legislation is adopted
in other markets.
A Chief Privacy
Officer and Data Protection Officer have been appointed at the
Company and Data Protection Officers are in place at a number of
our companies.
Our people must
take Privacy & Data Security Awareness training and understand
the WPP Data Code of Conduct and WPP policies on data privacy and
security.
The Data Health
Checker survey is performed annually to understand the scale and
breadth of data we collect so the level of risk associated with
this can be assessed.
COMPLIANCE
RISKS – TAXATION
Risk
definition
We may be subject
to regulations restricting our activities or effecting changes in
taxation.
Potential
impact
Changes in local or
international tax rules, for example, as a consequence of the
financial support programmes implemented by governments during the
Covid-19 pandemic, the OECD/G20 Inclusive Framework on Base Erosion
and Profit Shifting, and changes arising from the application of
existing rules, or challenges by tax or competition authorities,
may expose us to significant additional tax liabilities or impact
the carrying value of our deferred tax assets, which would affect
the future tax charge.
How
it is managed and reflected in our strategic
priorities
We actively monitor
any proposed regulatory or statutory changes and consult with
government agencies and regulatory bodies where possible on such
proposed changes.
Bi-annual briefings
to the Audit Committee of significant changes in tax laws and their
application and regular briefings to executive management. We
engage advisors and legal counsel to obtain opinions on tax
legislation and principles.
COMPLIANCE
RISKS – REGULATORY
Risk
definition
We are subject to
strict anti-corruption, anti-bribery and anti-trust legislation and
enforcement in the countries in which we operate.
Potential
impact
We operate in a
number of markets where the corruption risk has been identified as
high by groups such as Transparency International. Failure to
comply or to create a culture opposed to corruption or failing to
instil business practices that prevent corruption has previously
and could expose us to civil and criminal sanctions.
How
it is managed and reflected in our strategic
priorities
Online and
in-country ethics, anti-bribery, anti-corruption and anti-trust
training on a Group-wide basis to raise awareness and seek
compliance with our Code of Conduct and the Anti-Bribery &
Corruption Policy.
A continuously
evolving business integrity function to ensure compliance with our
codes and policies and remediation of any breaches of
policy.
Continuous
communication of the Right to Speak confidential, independently
operated helpline for our people and stakeholders to raise any
potential breaches of our Code and policies, which are investigated
and reported to the Audit Committee on a regular
basis.
Due diligence on
acquisitions and on selecting and appointing suppliers and
restrictions on the use of third-party consultants in connection
with any client pitches. Rolling programme of creating shared
financial services in the markets in which we operate and the
creation of a new controls function in 2020.
Risk Committees are
well established at WPP and across the networks to monitor risk and
compliance through all of our businesses and the enhancement of our
business integrity programme across our markets.
Gift and
hospitality register and approvals process.
COMPLIANCE
RISKS – SANCTIONS
Risk
definition
We are subject to
the laws of the United States, the EU, the UK and other
jurisdictions that impose sanctions and regulate the supply of
services to certain countries.
The Russian
invasion of Ukraine has caused the adoption of comprehensive
sanctions by, among others, the EU, the United States and the UK,
which restrict a wide range of trade and financial dealings with
Russia and Russian persons.
Potential
impact
Failure to comply
with these laws could expose us to civil and criminal penalties
including fines and the imposition of economic sanctions against us
and reputational damage and withdrawal of banking facilities which
could materially impact our results.
How
it is managed and reflected in our strategic
priorities
Online training to
raise awareness and seek compliance and updates for our companies
on any new sanctions.
Regular briefings
to the Audit Committee and constant monitoring by the WPP legal
team with assistance from external advisors of the sanctions
regimes. Executive Committee briefed and working with WPP legal to
ensure compliance with escalating sanctions as a consequence of the
Russian invasion of Ukraine.
We have taken a
number of actions as a consequence of the invasion. We have
announced the discontinuance of our operations in Russia and
ensured compliance with all sanctions as they impact any clients,
suppliers or financial arrangements.
EMERGING
RISKS
Risk
definition
Increased frequency
of extreme weather and climate-related natural
disasters.
Potential
impact
This includes
storms, flooding, wildfires and water and heat stress which can
damage our buildings, jeopardise the safety of our people and
significantly disrupt our operations. At present 10% of our
headcount is located in countries at “extreme” risk
from the physical impacts of climate change in the next 30
years.
How
it is managed and reflected in our strategic
priorities
Our strategy of
co-locating our people in WPP campuses is enabling us to centralise
emergency preparedness procedures. It will also enable us to more
efficiently deploy climate mitigation measures. We integrate
climate-related risk assessment into the technical due diligence
suite that we follow when we invest in a new campus building to
help ensure that material, acute and chronic physical climate risks
are considered in design and embedded into business continuity
procedures.
EMERGING
RISKS
Risk
definition
Increased
reputational risk associated with working on client briefs
perceived to be environmentally detrimental and/or misrepresenting
environmental claims.
Potential
impact
As consumer
consciousness around climate change rises, our sector is seeing
increased scrutiny of its role in driving unsustainable
consumption. Our clients seek expert partners who can give
recommendations that take into account stakeholder concerns around
climate change.
Additionally, WPP
serves some clients whose business models are under increased
scrutiny, for example energy companies or associated industry
groups who are not actively decarbonising. This creates both a
reputational and related financial risk for WPP if we are not
rigorous in our content standards as we grow our
sustainability-related services.
How
it is managed and reflected in our strategic
priorities
Our climate crisis
training seeks to ensure that our people recognise the importance
of our sector’s role in addressing the climate crisis. It is
part of a broader sustainability training programme being run in
multiple markets with localised content in key
regions.
We have developed
internal tools to help our people identify environmentally harmful
briefs. These tools embed climate-related issues within existing
content-review procedures across the organisation. The
misrepresentation of environmental issues is governed by our Code
of Conduct. We also ensure our policies reduce the risk that any
client brief undermines the implementation of the Paris
Agreement.
EMERGING
RISKS
Risk
definition
Changes in
regulation and reporting standards.
Potential
impact
We could be subject
to increased costs to comply with potential future changes in
environmental laws and regulations and increasing carbon offset
pricing to meet our net zero commitments.
Carbon emission
accounting for marketing and media is in its infancy and
methodologies continue to evolve. This is particularly the case for
emissions associated with digital media.
How
it is managed and reflected in our strategic
priorities
We are developing a
net zero roadmap to deliver against our net zero commitments and
aim to disclose more details of that roadmap in 2023.
As part of this
plan and through our work to decarbonise media and media supply
chains, we are exploring opportunities to improve accounting for
emissions from media.
As we seek to limit
emissions we need to reduce the total footprint of any product or
service as far as possible. To manage the cost and quality of
carbon credits purchased to offset remaining emissions, WPP
developed a new offsetting policy and is further developing our
offsetting strategy as part of our net zero roadmap.
APPENDIX B: DIRECTORS' RESPONSIBILITY STATEMENT
Each of the current
Directors whose names and functions are listed in the Corporate
Governance section of the Annual Report 2021 confirms that, to the
best of his or her knowledge:
●
the Group financial
statements, which have been prepared in accordance with IFRS,
issued by the International Accounting Standards Board (IASB) as
they apply to the financial statements of the Group for the year
ended 31 December 2021, give a true and fair view of the assets,
liabilities, financial position and profit of the Group.
and
●
the Strategic
report and risk sections of the Annual Report, which represent the
management report, include a fair review of the development and
performance of the business and the position of the Company and the
Group taken as a whole, together with a description of the
principal risks and uncertainties that it faces.
APPENDIX C: RELATED PARTY TRANSACTIONS
The
Group enters into transactions with its associate undertakings. The
Group has continuing transactions with Kantar, including sales,
purchases, the provision of IT services, subleases and property
related items. In the year ended 31 December 2021, revenue of
£117.2 million (2020: £90.6 million) was reported in
relation to Compas, an associate in the USA. All other transactions
in the years presented were immaterial. The Group invested a
further £92.9 million in Kantar in 2021 to fund its 40% share
of the Numerator acquisition.
The
following amounts owed by related parties were outstanding at 31
December 2021:
Kantar £30.3
million
Other £45.7
million
The
following amounts owed to related parties were outstanding at 31
December 2021:
Kantar £(6.2)
million
Other £(51.4)
million
END
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
WPP PLC
|
|
|
(Registrant)
|
|
Date:
31 March 2022
|
By:
______________________
|
|
|
Balbir
Kelly-Bisla
|
|
|
Company
Secretary
|
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