WPP PLC ("WPP" or "the Company")

Publication of Annual Report 2024, Sustainability Report and 2025 Notice of Annual General Meeting

WPP has today published on its website its Annual Report for the year ended 31 December 2024 ('Annual Report 2024', http://www.wpp.com/investors/annual-report-2024) together with its Sustainability Report. WPP has also today published its 2025 Notice of Annual General Meeting (the '2025 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 23 May 2025 at 11.00am at Rose Court, 2 Southwark Bridge Road, London SE1 9HS, with facilities to follow the business of the AGM virtually.

In compliance with 6.4.1R of the Listing Rules, copies of the Annual Report 2024 and 2025 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 2024 will be sent to those shareholders who have elected to receive paper communications on or about 10 April 2025.

The information included in the unaudited preliminary results announcement released on 27 February 2025, together with the information in the Appendices to this announcement which is extracted from the Annual Report 2024, 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 2024 in full. Page and note references in the Appendices below refer to page and note references in the Annual Report 2024.

Balbir Kelly-Bisla

Company Secretary

Further information 

Media: [email protected]

Investors: [email protected]

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

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 2024 and up to the date of this report - including any adverse effects of the geopolitical situation resulting from the conflicts in Ukraine and the Middle East - which are described in the table on this and the following pages.

ECONOMIC RISK

Risk definition

Adverse economic conditions, including those caused by the conflicts in Ukraine and the Middle East, severe and sustained inflation and currency volatility in key markets where we operate, tariffs and other trade barriers, supply chain issues including around resilience 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.

Potential impact

Economic conditions, including inflation, currency volatility and increasing interest rates among others, have a direct impact on our business, results of operations and financial position.

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

Our account teams, in partnership with WPP's Treasury function as needed, work proactively with our clients to understand the challenges they are facing, determine general trends in marketing spend and develop plans in advance to help us prepare, redeploy resources and manage costs accordingly.

Our crisis management and business resilience team works with our networks to identify priority services and the key dependencies they rely on and develops market-specific incident response and service continuity plans to best ensure business operations are resilient to external factors.

Our client portfolio is diverse, consisting of organisations operating in different industry sectors and across a broad geographical spread, which further helps mitigate the impact of any specific challenges individual clients or markets might be facing.

GEOPOLITICAL RISK

Risk definition

Growing geopolitical tension and conflicts continue to have a destabilising effect in our markets and across geographical regions. Alongside an adverse effect upon the economic outlook, there is a general erosion of trust in institutions and - in relation to global cooperation and integration - an increasing political focus both on national interests and regional convergence. Such factors and economic conditions may be reflected in our clients' confidence in making longer-term investments and commitments in marketing spend.

Potential impact

Actual or threatened geopolitical tension and conflicts lead to greater uncertainty, economic instability and a general lack of confidence for many of our clients who are inclined to scale back, delay or cancel their marketing plans and budgets.

How it is managed and reflected in our strategic priorities

We work closely with our in-country teams, third-party advisors, clients and other agencies in monitoring the level and nature of geopolitical issues, events and developments across all markets and regions.

Our primary focus is the safety and security of our people, and for extreme events or periods of disruption we have developed a series of crisis and response plans with clear lines of escalation to the Board and Executive Committee that focus upon the wellbeing of our people and their families.

We have detailed operational and financial plans, developed through the consideration of a range of potential scenarios and outcomes that are continuously monitored and, if required, used to make interventions and support decision making over our operations, investments and advice to clients.

STRATEGIC PLAN

Risk definition

The failure to successfully complete the strategic plan updated in January 2024 to lead through AI, data and technology, to accelerate growth through the power of creative transformation, to build world-class, market-leading brands and to execute efficiently to drive financial returns through margin and cash.

Potential impact

A failure or delay in implementing or realising the benefits from the strategic plan 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 Group simplification and regular briefings on the Group's response to economic and geopolitical risks.

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 economic and geopolitical risks 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 strategic plan as we continue to move towards a simplified company structure and enhanced use of technology, including generative AI, by our people.

AI STRATEGY

Risk definition

WPP Open is our AI-driven operating system for marketing transformation - it brings together, through proprietary AI models created within WPP, diverse datasets across media, performance, client and industry insights, it offers intelligent workflow and operations in a centralised workspace, it augments creative and strategic capabilities in an enterprise-level generative AI studio and it integrates, through WPP's technology partnerships, third-party technologies and data to provide an industry solution. Delay in adoption and leverage of the opportunities offered by WPP Open and AI in general may impact the services WPP provides to its clients, as well as the overall operation of the business.

WPP may incur costs when ensuring it can comply with the introduction of AI laws and regulations, including the EU AI Act. This would be through review of IT systems and processes, which may require refinement or amendment, to ensure regulation can be adhered to.

IP laws and in particular the analysis of copyright infringement is evolving in generative AI specifically. Where AI is used in client deliverables, IP infringement risk, in particular copyright infringement risk, must be assessed in the context of the underlying data sets used in the creation of client work.

Potential impact

Without the automation and efficiency gains offered by generative AI, and AI more broadly, we may experience increased costs and inefficiencies in our operations impacting profitability and competitiveness.

Clients expect us to use generative AI-driven tools and technologies in our services and deliverables and are increasingly able to purchase and use licences to such tools and technologies themselves. If we fail to adopt generative AI at pace and continue to advance and evolve our commercial model, we may struggle to keep up with these demands, leading to decreased relevance and effectiveness of our services and deliverables for clients, and allow an opportunity for AI vendors to contract directly with our clients.

Falling behind competitors leveraging the opportunities AI offers to gain a competitive advantage could result in lost market share, decreased revenue and reduced profitability.

We may struggle to attract and retain talent, further hindering our ability to innovate and compete.

Generated materials may infringe third-party IP resulting in legal costs and client reputation impact.

How it is managed and reflected in our strategic priorities

The Chief AI Officer, working together with the CEO and CTO, is responsible for the strategic direction of generative AI in the business.

We have established a Generative AI Governance Committee which oversees the application and adoption of, and risks associated with, generative AI across WPP. This committee includes the CEO, CTO and Chief Privacy Officer and other senior stakeholders in the business with responsibility for the safe and responsible use of generative AI within the Group. This committee will be expanded in 2025 to cover all AI risk.

We have developed and continue to invest in WPP Open, which is available to all staff in order to support our work and deliverables both internally and for clients.

We have established partnerships with leading generative AI platforms, technologies and companies, including NVIDIA.

We actively monitor the changing regulatory landscape and the introduction of new laws regulating AI to assess the impact on our business and work, including detailed review of the EU AI Act and evolving IP laws (including copyright), and how they will impact how we service our clients.

We have a comprehensive due diligence process in place to review the third-party AI tools/platforms used in the business. This process considers the use case for the tool/platform and includes reviews of the security, legal and technology aspects of the tool/platform as well as sources of underlying learning data, where applicable, to develop a 'traffic light' approach to risk.

While AI provides many opportunities (including efficiencies and new services and offerings), we also continue to review and consider the impact around our business model through the Generative AI Governance Committee, reporting to the Board and Audit Committee on identified risks and impacts.

IT AND SYSTEMS

Risk definition

We continue to undertake a series of IT programmes devised to prioritise the most critical changes necessary to support the Group's strategic plan while maintaining the operational performance and security of core systems.

The Group is reliant on third parties for the performance of a significant portion of our worldwide information technology and operations functions.

Failures or delays in providing these functions could have an adverse effect on our business.

Potential impact

Any failure or delay in implementing the IT programmes may have a material adverse effect upon the overall strategic plan and the realisation of key targeted benefits and savings.

Disruption and unavailability of critical systems may lead to disruption in our operations and client service delivery.

How it is managed and reflected in our strategic priorities

The Board and management team provide oversight and governance of the most important IT and systems change initiatives the business is pursuing.

Detailed plans have been prepared for each major systems initiative and overall progress, challenges and risks are monitored as part of our project management processes and discussed in dedicated steering committees which also agree upon any corrective action that may be required, including around supplier resilience.

Progress reports are also completed as part of regular briefings that the Board receives on the overall implementation of the strategic plan.

CLIENT LOSS

Risk definition

We compete for clients in a highly competitive industry which is continuously evolving and undergoing structural change and advancements in AI, data and technology. Client net loss to competitors or as a consequence of client consolidation, insolvency or a reduction in marketing budgets due to a geopolitical change or shift in client spending, could 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 who have not successfully diversified 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, or as a consequence of any loss of reputation, and may be limited by clients' policies on conflicts of interest.

How it is managed and reflected in our strategic priorities

The strategic plan updated in January 2024 places emphasis on leading through AI, data and technology, accelerating growth through the power of creative transformation, building worldclass, market-leading brands and executing efficiently to drive financial returns through margin and cash.

Renewed investment in WPP Open, our AI-powered marketing operating system, and increasing engagement amongst employees (74% increase in monthly active users since the start of 2024 to 33,000) and deployment through clients (see page 67).

Continuous improvement of our creative, media and production capabilities 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, Executive Committee and network management meeting to identify client loss. Monthly updates to the executive 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.

Board focus on the importance of a positive and inclusive culture across our business to attract and retain talent and clients. A continued simplification of our organisational structure (and therefore structural cost savings) and more collaborative working through the opening of further campus co-locations (see page 33).

CLIENT CONCENTRATION

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 or of a major assignment with them 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 19.7% of revenue less pass-through costs in the year ended 31 December 2024.

Clients can reduce their marketing spend, terminate contracts or cancel projects on short notice. The loss of one or more of our largest clients or of a major assignment with them, 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

Business review at every Board meeting and regular engagement at executive level with our clients including GCL (Global Client Lead) and business development teams monitoring (including through client satisfaction surveys) and supporting growth of client relationships.

A 'new and existing business' tracker is reviewed by the Executive Committee on a monthly basis with regular updates provided to the Board.

Increased flexibility in the cost structure (including incentives, consultants and freelancers).

PEOPLE, CULTURE AND SUCCESSION

Risk definition

Our performance could be adversely affected if we: do not react quickly enough to changes in our market; fail to attract and develop key creative, commercial, technology and management talent; are unable to retain and incentivise key talent; or are unable to adapt to new ways of working by balancing home and office working.

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

The Compensation Committee provides oversight for the Group's compensation and incentive plans, which are structured to provide retention value by, for example, paying part of annual incentives in shares that vest two years after grant date.

WPP's All In survey provides the Board, Executive Committee and senior leaders across the Group with the general sentiment, opinions and concerns of employees and was completed by 72% of our people in 2024. Headline findings included general and local views on engagement, career growth, leadership, clients, wellbeing and inclusion and have contributed to the menu of initiatives available to our people.

We continue to work across the Group to embed collaboration and invest in training and development to retain and attract talented people.

The investment in co-located campus properties continues to increase the cooperation across our agencies and provides extremely attractive and motivating working environments. Our real estate teams work closely with people teams across the business to consider how space is being utilised to support collaboration and innovation, and also operations: co-locating our people in fewer, higher-capacity campus buildings means we can centralise emergency preparedness procedures and deploy climate mitigation measures more efficiently.

We also continue to focus on the mental health of our people by providing access to wellbeing resources, support networks, funded events, discussion forums and additional time off.

Looking ahead, 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 is identified for both emergency and planned scenarios.

CYBER AND INFORMATION SECURITY

Risk definition

WPP has in the past, and may in the future, experience a cyber attack that leads to harm or disruption to our operations, systems or services. This risk is also likely to increase as the prevalence and sophistication of generative AI means there is potential for both human and AI-generated attacks.

Such an attack may also affect suppliers and partners through the unauthorised access to, or manipulation, corruption or destruction of, data.

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 and the associated geopolitical situation following the conflicts in Ukraine and the Middle East have triggered an increase in cyber attacks generally.

How it is managed and reflected in our strategic priorities

WPP has a single IT control framework that is mandatory for all WPP agencies and is aligned to the WPP Data Privacy & Security Charter, NIST, IS27001 and COBIT.

We monitor and log our network and systems through the WPP 24/7 Cyber Security Operations Centre, as well as undertaking threat intelligence activities, vulnerability scanning and penetration testing, where appropriate.

Breach and attack simulation software provides continuous assessment and incident response plans and playbooks are tested, with lessons learned and improvements made.

We continually raise our people's security awareness through our mandatory WPP Safer Data training and rolling phishing simulation and education programmes.

WPP's Data Privacy, Security & Ethics Risk Committee (a subcommittee of the WPP Risk Committee) meets quarterly and includes WPP's Chief Information Officer, Chief Information Security Officer, Chief Privacy Officer, Chief Sustainability Officer and Chief Technology Officer. This sub-committee is responsible for identifying and responding to privacy, technology, data and cybersecurity risk across WPP.

CREDIT RISK

Risk definition

We are subject to credit risk through the default of a client or other counterparty.

Challenging economic conditions, heightened geopolitical issues, shocks to consumer confidence, disruption in credit markets and challenges in the supply chain disrupting our client operations can lead to a worsening of the financial strength and outlook for our clients who may reduce, suspend or cancel spend with us, request extended payment terms beyond 60 days or be unable to satisfy obligations.

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 work closely with our clients to ensure timely payment for services in line with contractual commitments and with vendors to maintain the settlement flow on media.

Treasury and our liquidity position is a recurring agenda item for the Audit Committee and Board.

Increased management processes to manage working capital and review cash outflows and receipts.

INTERNAL FINANCIAL CONTROLS

Risk definition

Our performance could be adversely impacted if we fail to ensure adequate internal control procedures are in place. If material weaknesses are identified, they could adversely affect our results of operations, investor confidence in the Group and the market price of our ADRs and ordinary shares.

Potential impact

Failure to ensure that our networks 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.

If material weaknesses in internal controls 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 ADRs 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 is undertaken to identify trends and issues.

An authorisation matrix on inventory trading is agreed with the Board and the Audit Committee.

Our controls function is responsible for the design of financial, operational, reporting and compliance controls across the Group and, under the direction of our Group Financial Controller, performs an evaluation of the effectiveness of our internal control over financial reporting. Our technical accounting function supports both these review efforts and complex accounting matters and judgements, and changes in accounting standards.

Alongside the ongoing ERP deployment and finance shared service optimisation programmes, management has set clear control enhancement objectives for 2025 as part of the ongoing and continued development of the Group's controls culture, formalising its continuous improvement activities into a Controllership Enhancement programme.

Management is committed to maintaining a strong internal control environment, with appropriate oversight and monitoring, from controls committees which sit at WPP and at network level as sub-committees of the Risk Committees and meet quarterly, and from our Audit Committee.

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. The use of AI, while offering significant benefits, introduces specific data privacy risks related to data collection, model training and automated decision-making. 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 (for example, 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

-     Misuse or unintended consequences of AI technologies could lead to breaches of data privacy, reputational damage and regulatory scrutiny

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 to limit any potential disruption (for example, SCCs instead of the US Data Protection Framework).

We implement extensive training on data protection regulations (including GDPR and CPPA) and roll out toolkits to assist our people with their implementation.

We have a Chief Privacy Officer and Global Data Protection Officer in role and supported by a Data Protection Office. Data privacy activities across WPP are governed by the WPP Data Privacy & Security Charter and follow the WPP Privacy Management Framework.

WPP's Data Privacy, Security & Ethics Risk Committee (a subcommittee of the WPP Risk Committee with responsibility for identifying and responding to privacy, technology, data and cybersecurity risk) meets quarterly and includes WPP's CIO, CISO, Chief Privacy Officer, DPO, Chief Sustainability Officer and CTO.

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.

Tailored risk assessments have been conducted for key business functions, including Finance, Security, IT, and People, to identify and mitigate specific data privacy risks associated with AI implementation within those areas. These assessments inform function-specific policies, procedures, and training programmes.

Annual reporting to the Audit Committee on significant regulatory changes, data privacy risks and steps taken to mitigate those risks.

TAXATION

Risk definition

WPP's tax charge could be adversely impacted by new tax rules, changes to the application of existing rules or higher tax rates.

Potential impact

Changes in local or international tax rules and rates, changes arising from the application of existing rules, new demands and assessments or challenges by tax 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 and our liquidity position.

How it is managed and reflected in our strategic priorities

We actively monitor any proposed regulatory or statutory changes and consult with government agencies 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.

We seek to identify, evaluate and mitigate operational tax risks through our tax control framework.

REGULATORY

Risk definition

We are subject to strict anti-corruption, anti-bribery and anti-trust legislation and enforcement and incoming anti-fraud legislation 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 fraud, bribery and corruption or failure to instil business practices that prevent both human and AI-generated fraud and corruption could expose us to civil and criminal sanctions and negatively impact our reputation or financial condition.

How it is managed and reflected in our strategic priorities

Online and in-country ethics, anti-bribery, anti-corruption, anti-fraud and anti-trust training on a Group-wide basis to raise awareness and seek compliance with our Code of Conduct and AFBAC Policy.

A continuously evolving business integrity programme to ensure compliance with our codes and policies and remediation of any breaches of policy.

Continuous communication of the confidential, independently operated Right to Speak 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, an actively managed disclosure programme and approvals process around conflicts of interest and related party interests and (separately) around gifting, entertainment and hospitality and restrictions on the use of third-party consultants in connection with any client pitches.

Shared financial services in the markets in which we operate and a controls function which operates at WPP and at network level.

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. For details of the risk committees' responsibilities and our business integrity programme, see pages 73-74.

SANCTIONS

Risk definition

We are subject to the laws of the US, the EU, the UK and other jurisdictions that impose sanctions and regulate the supply of services to certain countries.

The conflict in Ukraine has caused the adoption of comprehensive sanctions by, among others, the EU, the US 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 agencies on any new sanctions.

Regular briefings to the Audit Committee and constant monitoring by the WPP legal function with assistance from external advisors of the sanctions regimes. Executive Committee briefed and working with the WPP legal function to ensure compliance with escalating sanctions as a consequence of the conflict in Ukraine.

ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)

Risk definition

The Group's operations could be disrupted by an increased frequency of extreme weather and climate-related natural disasters.

The Group could be subject to increased costs to comply with the potential future changes in ESG law and regulations. This includes the EU Corporate Sustainability Reporting Directive (CSRD) and the IFRS Sustainability Standards.

A failure to manage the complexity in carbon emission accounting for marketing or to consider Scope 3 emissions in new technology and business model innovation across the supply chain could have an adverse effect on our business and reputation.

We are susceptible to reputational risk associated with working on client briefs perceived to be environmentally detrimental and/or misrepresenting environmental claims.

Potential impact

More frequent extreme weather and climate-related natural disasters could include storms, flooding, wildfires and water and heat stress which can damage our buildings, jeopardise the safety and wellbeing of our people and significantly disrupt our operations.

We could be subject to increased costs to comply with potential future changes in ESG laws and regulations. This includes increasing carbon offset pricing to meet our climate commitments.

Increased investment is also required to renovate and electrify buildings, embed sustainability in AI development and develop internal ESG reporting capacity and capabilities.

In addition, carbon emission accounting for marketing is in its infancy and methodologies continue to evolve. This is particularly the case for emissions associated with digital media. This may result in the need for future emissions restatements to reflect measurement changes.

Furthermore, as societal consciousness around climate change evolves, our sector is seeing scrutiny of its role in driving consumption. Our clients seek expert partners who can give recommendations that take into account their impact and 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. This creates both a reputational and related financial risk for WPP if we are not rigorous in our content standards.

How it is managed and reflected in our strategic priorities

Our Crisis Management and Business Resilience function provides global standards for operational resilience: strategy, governance, policy, resources and training assets to better plan for and respond to crisis events of all types and at all degrees of scale. This includes extreme weather events and also the Employee Assistance Programme is activated in response to climate-related extreme weather events. In addition, climate-related risk is considered in our co-location strategy as noted above and as needed we also employ a hybrid working approach, providing additional resilience by enabling full remote working - provided employees and their families are in safe locations - during extreme weather events.

We are developing an ESG compliance roadmap to deliver against our regulatory obligations, including for the EU Corporate Sustainability Reporting Directive.

Our Transition Plan will provide the roadmap to achieving our carbon reduction commitments. 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.

To manage the cost and quality of carbon credits purchased to offset residual emissions, WPP's Sustainability Policy and Environmental Policy include policy guidance around offsetting. We are further developing our offsetting strategy as part of our Transition Plan.

The Board Sustainability Committee gives increased focus on sustainability and implementation of our plans and policies. ESG reporting has been embedded in the Terms of Reference of the Audit Committee, providing increased focus on the development of our non-financial reporting capabilities.

Measuring and monitoring sustainability KPIs is critical to meet our sustainability strategy and targets. We are embedding ESG controls across our operations to enhance the accuracy of our disclosures across material ESG topics.

In 2024, we launched a Future Readiness Academy for Sustainability. Modules covering Climate Essentials and Green Claims are accessible to all employees globally and seek to ensure that our people recognise the importance of our sector's role in addressing the climate crisis. The Academy 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 potentially 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 Business Conduct. Our Assignment Acceptance Policy and Framework and Green Claims Guide provide further guidance about how to conduct additional due diligence in relation to clients and any work we are asked to undertake.

Further information on ESG governance and ESG reporting is provided in the Sustainability section of this report (pages 36-61).

APPENDIX B: STATEMENT OF DIRECTORS' RESPONSIBILITIES

Each of the current Directors whose names and functions are listed in the Corporate Governance section of the Annual Report 2024 confirms that, to the best of his or her knowledge:

·   the Group financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) as they apply to the financial statements of the Group for the year ended 31 December 2024, 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, primarily in relation to pass-through billing arrangements.

The following amounts were outstanding at 31 December 2024:

·    Amounts owed by related parties: £68 million; and

·    Amounts owed to related parties: £(104) million.

END