These past 18 months have been a testing time for everyone, particularly those who have lost relatives and friends or have struggled with the health impacts of COVID-19. Across PwC we have pulled together to support our people and the communities in which we live and work, to help each other get through these challenging times.
I want to thank all of my colleagues for their hard work and perseverance. And on behalf of everyone at PwC I would also like to thank the front-line workers who have been helping us in countless ways, as well as the scientists and healthcare workers who have developed and rolled out the vaccines that are saving lives and will enable the world to open up again. Their ingenuity and imagination are an inspiration to us all.
While the disruption caused by the COVID-19 pandemic has brought many challenges, it has also taught me some very important lessons. Such as the need to protect your people as best you can. The need to connect and keep in touch. And the need to take time for yourself and balance your personal life with your work. As an organisation we have also learned lessons, and I believe that PwC will emerge from the pandemic stronger, more focused and better positioned than ever to deliver on our Purpose - to build trust in society and solve important problems - and our strategy - The New Equation.
In a year when economic conditions were tough, I’m proud that PwC led with our values, taking a “people first” approach - prioritising wellbeing and health while continuing to create jobs and opportunities for advancement. I’m also proud of the significant investments we have made in digitalising the PwC network and upskilling our people over the past several years. These investments have not only empowered our people to continue to deliver quality services seamlessly while working remotely, but have also enabled us to recruit and onboard over 90,000 new employees across the network. Something that’s still hard for me to grasp is the idea that so many PwC professionals are yet to set foot in a PwC office. But they soon will, as we open up more of our offices around the world. While remote working has its benefits, we are committed to giving people the opportunity to come together, build relationships and share ideas person-to-person in a PwC workplace.
Prior to the pandemic we were already immersed in a conversation with thousands of clients and other stakeholders about the global trends and challenges they faced - things like technological disruption, climate change, fractured geopolitics, social tension and the dissolution of trust in institutions - trends the pandemic only intensified and accelerated. We applied that “outside-in” perspective when laying out our new global strategy in June 2021. It centres on how PwC is uniquely positioned to address the two distinct but interconnected needs we know every organisation faces: to build trust and to deliver sustained outcomes for all its stakeholders.
Our strategy, The New Equation, is about how PwC brings together unique combinations of people, powered by technology, galvanising ourselves as a community of solvers to address those dual challenges. The foundation of the strategy is our multidisciplinary model, which allows us to help clients build trust and deliver sustained outcomes by bringing together deep expertise across a broad range of capabilities. It is this combination of capabilities and the ability to look at things from different perspectives that is so essential to delivering high quality and real impacts for clients, stakeholders and society at large.
The New Equation is more than just words on paper. We’ve committed to more than US$12bn of investments over the next five years and the creation of over 100,000 net new jobs. These investments include initiatives such as the establishment of Trust Institutes based in the US and China. An incremental US$3bn investment in quality. And the addition of specialists in increasingly critical areas such as technology, digital, climate, strategic deals, leadership and change, strategy, and supply chain. We are focused on the actions we need to take to reposition our services and the skills we need to deliver for our stakeholders in the future. These initiatives translate into increased career opportunities for our people, growth for our operations and an enhanced ability to make a difference for our clients and stakeholders.
In addition to delivering for our stakeholders and taking care of our people we have worked together across our network to develop The New Equation - an impressive achievement given the challenge of engaging virtually with thousands of stakeholders and PwC leaders to test our ideas and ultimately launch our new strategy across the world.
In order to help organisations build trust, PwC needs to be a trusted organisation. At PwC we have a long-standing reputation for trust that is built on financial reporting and compliance, but we know that trust goes much further than that. The concept of trust - including what drives trust and how we can contribute to the creation of trust - has broadened far beyond the assurance we provide to shareholders on financial statements, and now extends to looking at the needs of a wide group of stakeholders and the impact that organisations have not just financially but socially and on the planet. This fundamental shift means our ability to protect data, make progress on diversity and inclusion, and govern responsibly are all a part of how we build a trusted brand.
As a global network of firms, PwC has committed to transparency in a number of areas to build that trust. For example, we have worked closely with the International Business Council of the World Economic Forum in agreeing a universal set of environmental, social and governance metrics which were published in September 2020. As well as actively promoting the use of these metrics with our clients and stakeholders, we are comparing our disclosures to these metrics in our global annual review this year, so everyone can see how far we have come and how much further we have to go on our journey towards greater transparency and accountability.
A further step forward is that we are providing more detail on how the PwC network is organised and the operation of the PwC Global Board. During the 2021 financial year (FY21) I was delighted that Lisa Sawicki was chosen as the chair of our global governance board, and for the first time in our history we welcomed two independent members to that board. Having independent members on our governance and oversight bodies is good practice and we are encouraging its adoption by our member firms.
In an environment where society's expectations are increasing almost by the day, it’s more vital than ever that we maintain an unwavering commitment to quality right across our businesses. That’s why we are constantly looking for ways both to enhance the quality of our work and also to meet and exceed the expectations of our stakeholders.
We were proud to be the first professional services network to publish its audit quality inspection results - and I am happy to say that for the fourth consecutive year our audit quality inspections show an improvement. While this is clearly satisfying, there is always more we can do and our new strategy includes US$1bn of new investment specifically dedicated to the accelerated deployment of technology to drive audit quality. In the future, we believe that a step-change in audit quality will be achieved through a new partnership between people and technology. To help bring this about, we are investing heavily in advanced digital skills and AI-powered tools that are transforming the way our people and tech work together.
The economic conditions in FY21 remained challenging across the world for much of the year. Overall, PwC firms across our network had gross revenues of US$45 billion for the 12 months to the end of June – up by 2% on FY20. This was a solid result given the situation.
For the first nine months of FY21 growth remained relatively flat. But as we neared the end of the year demand started to pick up, and in the final quarter revenues rose by 18% compared to the same period in FY20. While some of this 18% growth is due to a very difficult last quarter in FY20, it also reflects other factors including an increase in client needs for services such as deals and restructuring, the resilience of our firms around the world, and our preparedness to move quickly with the right people in the right places when demand started to pick up. With the launch of our strategy The New Equation, which helps us support our clients in building trust and to deliver on the broad business issues they are facing, we project that our revenue growth will remain robust through FY22.
In addition to reporting in more detail on our revenues by region and lines of business, we are also reporting this year for the first time some information on net income and taxation. Given our legal structure there is no basis to consolidate member firm financial statements, but we are committed to improving transparency and to providing increasing amounts of information for our stakeholders. With this in mind, I encourage you to take a look at the financial report in this global annual review.
Overall, I am proud of the progress we have made as a global network of firms and a 295,000‑strong community of solvers. Below are some key highlights from our global annual review and links to where you can find more information:
A big thank you to our PwC partners and professionals around the world who, despite the challenges posed by the pandemic, live our values and deliver on our purpose and strategy every day. As a result of successfully executing on this strategy, I’m confident we will be well positioned to help reinvent the future in new and unexpected ways, while continuing to make a difference for our communities and our world.
I hope you enjoy reading our FY21 global annual review. If you have any comments or questions, please don’t hesitate to get in touch. I’ll be delighted to hear from you.
Director, Global Corporate Affairs and Communications, PwC United Kingdom
Tel: +44 7803 974136