Investing
in the future
A year of two halves
As we began the financial year, the entire business was dominated by our Covid response. The first three month lockdown was just easing but the debilitating effects of the pandemic had taken their toll.
A year on, we are seeing the benefits of a strategy built on our long term goals of supporting our clients, our people and our communities.
By putting our purpose - to build trust in society and solve important problems - at the core of our thinking we have been able to navigate our way through a situation unchartered in living memory.
We held our nerve
We didn’t furlough or cut jobs. Instead we relied on the flexibility and resilience of our people as they juggled competing responsibilities. And we collaborated with our clients to help them best deal with the issues they faced while we supported our communities with a clear focus on employment, social mobility, diversity and inclusion, and sustainability.
We also picked up a few awards along the way.
“We plan to invest £1.2bn over the next five years in a number of ambitious programmes to create jobs, increase skills and deliver wider benefits to the UK economy.”
Kevin Ellis, Chairman and Senior Partner
In the second half of FY21 we began to see real change. While the pandemic was still with us, we settled into new routines to cope with its demands. Audit benefitted from our investment in quality, while the deals-led recovery has been felt strongly in our Transaction Services and Corporate Finance teams.
Demand for transformation advice, including finance transformation and digital and data strategies, were key drivers of second half growth, along with increased demand for other services such as decarbonisation plans and designing and delivering hybrid working strategies.
The firm’s 2% revenue growth reflects two underlying trends. There was growth in the second half of the year as client activity rebounded and with large numbers of our people working from home we saw revenue related to client engagement costs such as business travel expenses decline considerably.
Many see this recovery as a catalyst for profound change and we’re no exception. Our strategy is built on identifying and addressing the change that clients are demanding. In our view, this is around helping them build trust with their stakeholders and delivering sustained outcomes that make a difference.
Our revenues
Select the options below to explore the make-up of our revenues:
Serving our clients
Above all else, the last year has been about investing in relationships.
Our clients are some of the most innovative and impactful private, public, and third sector organisations. We’re proud of the way that our people have consistently shown up for them with speed, imagination, and care.
In practice, this has meant staying connected with them to help identify and solve their most important problems. For some, that’s been about survival - conserving cash, accessing government support, or responding to fundamental industry change. For others, it’s been about bold moves into new markets, accelerating complex transformation, or building trust with a growing group of stakeholders.
Throughout the year, clients have called upon us to help reset their strategies, to lead transformation, and to help them run their operations in new and more efficient ways. We’ve supported the start of a deals-led recovery, helped our clients to rethink risk, and met client demand for specialist tax expertise. We’ve also continued to drive action and investment in high-quality audits.
We worked with the Government on its emergency response to Covid and its actions to enable economic repair, with support for the levelling up agenda being a strong feature of our work across all regions this year.
“We talk about three characteristics - speed, imagination, and care - to describe how our five lines of service deliver for clients of all shapes and sizes, across all industry sectors, market segments, and geographies.”
Marco Amitrano, Head of Clients & Markets
Traditional industry boundaries blurred more than ever in FY21, with business disruption, the need for collaboration, and the exciting possibilities offered by digitisation among the biggest drivers. Our unique view across industries positioned us well to share knowledge and solutions from one sector to another, from resolving supply chain challenges to shoring up cyber defences.
Drawing on the best of our human skills and the strength of the PwC global network has allowed us to support organisations with an industry and regional reach that impacts the lives of millions across and beyond the UK.
All of this was backed up by our Technology & Investments team. Our growing community of technologists can be found across the firm with specialists in every Line of Service and our central technology function.
As clients shift their focus to the medium term, a common theme in our conversations is better aligning the business agenda with urgent social and environmental needs - whether that’s transitioning to net zero or strengthening the UK as a competitive, secure place to do business.
We’re excited about what our clients are saying they need from us in FY22 and beyond, which is to bring everything we offer together in new, creative ways. Our focus now is on growth through change and we’re committed to investing alongside our clients for mutual success.
Investing in our people
Our main priority throughout the pandemic has been our people - and in particular, their wellbeing and job security. During the worry and uncertainty, we’ve sought to provide reassurance, care and clarity, and our consistently high engagement scores over the last year reflect this.
As well as protecting jobs, we’ve been able to make an unprecedented investment in our people, while planning for a post-pandemic world, continuing recruitment activity and investing in the workforce of the future.
Alongside the annual reward round, we’ve given our people an extra day off and an extra week’s pay in recognition of their hard work amidst the challenges presented by Covid. We’ve continued to invest in mental and physical wellbeing support, including a year’s subscription to meditation and mindfulness app Headspace, and we’ve added a 24/7 virtual GP service as standard for all. We’ve been sure to have some fun along the way too - our virtual ‘Spring Fest’ featured some well-known celebrity guests and was designed to lift our people’s spirits towards the end of the lengthy winter lockdown.
Empowered flexibility - the future of work
We’ve also been looking ahead - planning for what post-pandemic life will mean for our people, clients and communities. While we had already moved towards a flexible approach to working pre-Covid, this year we’ve taken the opportunity to enhance this further through the launch of a new Deal for our people. It shines a spotlight on empowered flexibility - giving our people more control over where, when and how they work, as we all adapt to a new, blended way of working from home, client sites and our offices.
Workforce of the future
As a large employer, we recognise the important role we’ll play in the economic recovery, helping to close the UK’s skills gap and creating opportunities for the workforce of the future. So as well as running internal upskilling programmes, we’ve supported our communities through the provision of learning and employability resources and programmes.
Thanks to our investments in technology, we’ve been able to continue with our recruitment and onboarding activities throughout the pandemic. Our innovative new virtual reality platform, Virtual Park, has enabled us to engage with and hold large-scale events for students in a very different way, and we are continuing to broaden routes into our firm to attract the most talented people in the market from an increasingly diverse range of backgrounds.
Diversity and inclusion
Building a more diverse and inclusive workplace
This is our seventh year publishing our gender pay gap data and we are pleased to report that our key metrics, the median pay and bonus gaps, have all reduced further, continuing the downward trend. This reflects our commitment to taking action to ensure we deliver our gender targets. You can use the data explorer below to find out more about our progress against these targets and our Diversity Pay Report to find out more about our gender pay gap.
Headcount data is correct as of 1 July 2021, and takes into account promotions effective as of that date. Pay data excluding partners is a snapshot as at 5 April 2021 (following regulatory methodology) and data including partners is for the FY21 financial year.
We have made good progress this year in strengthening our pipeline of female talent, particularly at manager and senior manager level, and we’re delighted that women made up 41% of internal partner admissions this year. All of this means we are on track to achieve our gender targets across all grades by July 2025.
Our diversity data plays an important part in helping to shape the steps we’re taking in our five point action plan to build an even more diverse and inclusive culture within our firm where everyone feels they belong and valued for who they are.
In addition to this, we have been delivering a targeted racial equality action plan that we announced last year to help accelerate the pace of change in improving racial equality both within our firm and in wider society. Our ethnicity data includes our progress against our targets and our ethnicity pay gap, which we’re publishing voluntarily for the fifth year running. We’ve broken down our ethnicity pay data even further this year to include Chinese data in addition to the Black, Asian, and Mixed Ethnic Background data we shared last year.
And because we believe in the power of transparent data in driving real change, we are also voluntarily publishing our socio-economic background and disability pay and bonus gaps for the first time this year - you can find this on our diversity data page.
Data excluding partners is a snapshot as at 5 April 2021 (following regulatory methodology) and data including partners is for the FY21 financial year. Further information is provided in our Diversity Pay Report. You can also find out more about our broader approach to pay.
ESG - Living our purpose
Our ambition is to build trust in the climate transition and help accelerate the transformation the world needs.
Purpose sits at the heart of our strategy and integrating the fundamentals of ESG into our work is key to helping organisations improve their impact on the environment, and on society, to become more resilient, agile and sustainable. We’re launching an ESG platform and committing to upskill our people to build ESG into our client services, which is part of our global net zero commitment.
We’re also using our role as an employer to support a fair and just transition, for example we have been ranked as the top employer for social mobility in the Social Mobility Foundation’s Employer Index (2019 & 2020). Our work this year includes expanding our Flying Start Degree Programme, which allows people to earn while they learn, with Queen Mary University of London joining the programme.
We have kept the spotlight on tackling inequality and climate change through a number of our initiatives. This includes helping clients as they take action on net zero and move to maximise their positive impact throughout their international supply chains, and support a fair transition to a greener world.
Our Future of Government programme looks at how government and business can work together to address inequality. Our Women in Work Index is our annual assessment of female economic empowerment across 33 OECD countries. And we have promoted initiatives for sustainable development by working with high-profile businesses on women’s economic empowerment in a number of countries.
We have also used our technical expertise to support Government and international bodies on programmes such as the Global Future Cities Programme, studying the impact of changes in global mobility, and facilitating green energy in the Democratic Republic of Congo.
For our own part, we have also driven significant progress on our environmental commitments, and achieved a platinum Ecovadis sustainability rating.
Total community contribution: £4.8m (FY20: £6.2m)
Climate risk and reporting
Action on ESG relies on trusted reporting, but historically this has been challenging because of the many standards that exist. In partnership with the World Economic Forum and the International Business Council, we’ve been playing a leading role in promoting global coordination on non-financial reporting for investors and other stakeholders through the Measuring Stakeholder Capitalism report.
Building on our membership of the Task Force on Climate-related Financial Disclosures (TCFD), we’ve been raising awareness and promoting best practice through our practical guide on implementation of TCFD. And we’ve provided snapshot insights into climate change and ESG reporting through our annual review of practices in the FTSE 350. We’ve also used our annual Building Public Trust Awards to shine a light on the importance of open and robust non-financial reporting, with the introduction of a specific climate-change reporting award. We’ve been improving quality through our market leading assurance work and helping our clients assess the potential risks and opportunities from climate change and implement strategies to respond and we've also updated our own statement on climate risk.
Supporting climate action on the road to COP26
This year the international climate summit (COP26) will be hosted in Glasgow - the first time a United Nations Climate Change Conference has taken place on UK soil - and it’s an important milestone in our net zero journey.
We have colleagues currently seconded to the United Nations High Level Climate Champions Team to support on COP26 - Kiran Sura (Senior Manager, S&CC) and Bridget Jackson (Chief Sustainability Officer). Kiran is providing geo-political and strategic advice to inform country engagement, and Bridget is leading business engagement for the High Level Champions, driving momentum towards climate action amongst businesses via the Race to Zero and the Race to Resilience campaigns. This is a clear sign of our commitment to support the market, and our clients, on the transition to net zero, and a demonstration of our purpose in action.
And in the run up to COP26 we’re empowering our people to take positive action themselves through supporting and promoting the Count Us In programme. This is a global initiative which aims to inspire a billion people to significantly reduce their carbon footprint whilst challenging leaders to set and deliver bold climate commitments at COP26 and beyond.
Additionally, PwC is delivering two flagship climate programmes - the Climate Ambition Support Alliance (CASA) and Climate Finance Accelerator (CFA) - for UK Government to be profiled at COP26. You can read more about these programmes here.
Countdown to COP26
Our reports, events and activities supporting our clients’ ESG agenda
Integrity, objectivity and impartiality
Being able to demonstrate that we always act with integrity, objectivity and impartiality is fundamental to fulfilling our purpose.
Transparency is paramount to the firm and our stakeholders. That’s why we continue to share key information on important topics such as how we engage with our stakeholders, how we’ve constructively contributed to policy debates, and how we set our tax strategy which underpins our purpose and influences the decisions we make. We also publish our Transparency Report every year.
This year we are launching a new digital Transparency Report designed to help our stakeholders stay informed about important information relating to our Audit practice and audit related services.
At a time when the audit profession continues to be under significant scrutiny, it’s critical that we continue to share insight into what we do, and how we do it - whether it’s our approach to recruiting, training and rewarding our people, our focus on audit quality, or how we create an inclusive culture - all overseen by robust governance structures.
As part of our commitment to transparency we also publish details of our executive pay. Partner remuneration is determined through a fair, robust and transparent income system aligned with the firm’s vision, culture and performance ambitions. Individual profit per partner depends on the overall profitability of the firm and is based on a number of factors including responsibility and performance across the firm’s strategic priorities. Remuneration for members of the Management Board is overseen by the Talent & Remuneration Committee and more information is available here.
For FY21 our distributable profit per partner includes a number of one-off non recurring items. For transparency, we have also disclosed our executive remuneration figures based on our underlying average distributable profit per partner (core profit).
We are a large partnership managed and governed by three main bodies each with a different role and responsibility: the Management Board, the Supervisory Board and the Public Interest Body. This year we also announced the establishment of our Audit Oversight Body as a further important step in strengthening the governance of our Audit practice. You can hear from members of the firm’s governance bodies in the Transparency Report, including their reflections on key activities during FY21 and their engagement on the BEIS consultation on the UK’s corporate governance, reporting and audit regime.
