Examples from the Masdar Initiative in Abu Dhabi Touc Mezher, Samer Tabbara and Nawal Al Hosani Masdar Institute of Technology, Abu Dhabi, United Arab Emirates Abstract Purpose The purpose of this paper is the introduce corporate social responsibility (CSR) in Abu Dhabi, the biggest Emirate and one with the largest oil reserve in United Arab Emirates (UAE). Abu Dhabi set the rst renewable energy policy in the region in January 2009. The policy calls for at least 7 percent of Abu Dhabis power generation capacity to come from renewable energy sources by 2020. In 2006, the leadership of Abu Dhabi made a strategic decision to establish a globally competitive renewable energy sector in the country and hence the Masdar Initiative was created. It is driven by the Abu Dhabi Future Energy Company (ADFEC), also called Masdar. Design/methodology/approach The paper focuses on the corporate social responsibility of Masdar and the role the rm is playing as the prime mover in the renewable energy sector in UAE and the region. The paper is structured in the following manner. First, the literature on corporate social responsibility is reviewed. Second, the environmental challenges of UAE are highlighted. Third, the paper discusses the different business units of Masdar and their related projects and investments at local, regional and global levels. Finally, the role of ADFEC as a prime mover in sustainability and corporate social responsibility is highlighted. Findings Masdar has taken leadership in CSR and sustainable energy technologies in Abu Dhabi, UAE and the region. Originality/value The case demonstrates the willingness of oil-producing countries to become more sustainable and to do something about climate change. The Masdar Initiative, which includes the rst carbon-neutral city, can be regarded as a benchmark for future similar projects in the region and around the world. Keywords Social responsibility, Renewable energy, Gases, Emission, United Arab Emirates Paper type General review Introduction Human activities are the most important factor that is affecting our climate. This was conrmed by the Third and Fourth Assessment Reports of the United Nations Intergovernmental Panel on Climate Change (IPCC, 2007). Carbon dioxide (CO2) is one of the most important anthropogenic greenhouse gases (GHG). Annual emissions, energy as the main source, grew by about 80 percent between 1970 and 2004. Reduction of CO2 emissions from energy use can be done in three ways: energy efciency, renewable energy (RE), and carbon capturing and sequestration. Renewable energy is an attractive option because it substitutes for fossil fuel and the economic The current issue and full text archive of this journal is available at www.emeraldinsight.com/1477-7835.htm The support of Masdar Institute of Science and Technology (MIST) in Abu Dhabi, UAE, is gratefully acknowledged. MEQ 21,6 744 Received 15 October 2009 Revised 28 April 2010 Accepted 1 June 2010 Management of Environmental Quality: An International Journal Vol. 21 No. 6, 2010 pp. 744-760 qEmerald Group Publishing Limited 1477-7835 DOI 10.1108/14777831011077619 feasibility of renewable energy technologies is improving with time (Clift, 2007; Sims, 2004). Fossil fuel will still remain the major source of energy for decades to come, but eventually alternative sources of energy will surpass fossil fuels (Zerta et al., 2008). Developing a renewable energy sector in a country will have a positive impact on its sustainability and will provide a wide variety of socioeconomic benets, contribute to the diversication of energy supply, enhance regional and rural development, and create an opportunity for a domestic industry and job creation potentials (del R o and Burguillo, 2009). Newly established RE companies are considered to be in the business of sustainability and corporate social responsibility (CSR). This paper will look at the CSR role of newly established RE companies and will discuss the case of Masdar especially after the Abu Dhabi government announced that seven percent of power has to come from RE sources by year 2020. This paper starts by reviewing the CSR literature, and then looks at the environmental challenges in Abu Dhabi. Finally, the role of Masdar as the Prime Mover in the RE sector is highlighted including its sustainability and CSR practices. Literature review of CSR CSR: concept, development and principles Since 2000, the European Union (EU) has been engaged in developing a framework for corporate social responsibility with tools for assessing standards (Streimikiene et al., 2009). In their Green Paper, the Commission of the European Communities described CSR as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (CUC, 2001, p. 6). Socially responsible means going beyond compliance, investing more into human capital, the environment and relations with stakeholders and not just fullling legal obligations (CUC, 2001). CSR was acknowledged as an opportunity for enterprises in Europe to contribute to a sustainable growth and job creation. CSR can play a leading role in enhancing Europes innovation potential and competitiveness. Some of the proposed actions to promote CSR practices include awareness-raising and practice exchange, support to multi-stakeholder initiatives, cooperation with member states, consumer information transparency, research, education, and international dimension of CSR (CUC, 2006). Better regulations, instruments, mainstreaming CSR with EU policies and programs, and Europes contribution to global CSR were also proposed (CUC, 2007). CSR has evolved over time since it was rst debated in 1932 by Professor Dodd when he said that corporate managers have responsibilities to the public as a whole and not just to shareholders (Dodd, 1932). CSR has also evolved through the years from philanthropy to strategic philanthropy, from investing to socially responsible investing (fund screening, social advocacy, community investment), from entrepreneurship to social entrepreneurship, from venture capital fund to social venture capital fund, from an MBA to an MBA in CSR, corporate social responsibility and protability (employees, customers, governments, media), and the bottom line (Cochran, 2007). At the global level, many international accords were initiated to promote voluntary CSR practices. Such accords include the UN Global Compact (UNGC), Global Corporate Citizenship Initiative (GCCI), Equator Principles for Financial Institutions (EPFIs), and the UN Principles for Responsible Investments (UNPRI) (Sadler and Lloyd, 2009). The UNGC, which was launched at UN headquarter in 2000, is a strategic policy initiative An overview of CSR 745 for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption as shown in Table I (UNGC, 2000). The GCCI was launched by the World Economic Forum in 2001. According to Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, corporations are having more inuence over the lives of stakeholders, which is due to diminishing role of the state due to advances in technology (Schwab, 2008). In 2003, ten major European project nance banks agreed a set of guidelines named the Equator Principles, aimed at incorporating environmental and social responsibility into their lending practices (Equator Principles, 2003). The principles were formulated with the support of the International Finance Corporation, the private sector lending arm of the World Bank. In 2004 the UN also promoted its Responsible Investment Initiative which led in 2006 to agreement on six Principles for Responsible Investment (PRI) in a global charter signed by 32 pension and investment funds (Sadler and Lloyd, 2009). Table II shows the Equator and PRI principles. CSR and sustainability Lynes and Andrachuk (2008) developed a conceptual model for corporate social and environmental responsibility (CSER). There are four parts of the model. Part I consists of four levels of inuence: (1) the market system; (2) political-institutional system; (3) scientic system; and (4) social system. Principle Human rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights Principle 2: make sure that they are not complicit in human rights abuses Labor standards Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Principle 4: the elimination of all forms of forced and compulsory labor Principle 5: the effective abolition of child labor Principle 6: the elimination of discrimination in respect of employment and occupation Environment Principle 7: Businesses should support a precautionary approach to environmental challenges Principle 8: undertake initiatives to promote greater environmental responsibility Principle 9: encourage the development and diffusion of environmentally friendly technologies Anti-corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery Source: UNGC (2000) Table I. United Nation Global Compact Principles MEQ 21,6 746 Part II consists of different rms motivation for CSER including: . long-term nancial strategy; . eco-efciencies; . competitive advantage; . good corporate citizenship; . image enhancement; . stakeholder pressures; and . a desire to avoid or delay regulatory action. Part III consists of catalysts, which help shape inuences by acting as a medium for encouraging/discouraging CSER. Part IV consists of the level of commitment encompassing the degree to which a rm will participate in CSER in terms of its pledges to take a course of action, responsibility taken for its action, level of involvement with environmental and social issues, as well as its dedication to improve the rms performance in these areas. The conceptual model was used for an in depth study and was applied to Scandinavian Airlines (SAS) (Lynes and Andrachuk, 2008). Responsible leadership plays a critical role in the sustainability of the rm. A company that embarks on the path of sustainability needs to carefully examine its mission, vision and values. It must be informed about legal constraints and assess all its management structures. Leaders should examine carefully the critical strategic sustainability factors. Internal factors include managerial, operational, and economical. External factors include market, government, and stakeholders expectations (Szekely and Knirsch, 2005). Corporations are driven by prots, but still, they should play a more proactive role in the sustainable development of the society. This means that they have to go beyond The Equator Principles UN Principles for Responsible Investment (ESG) Principle 1: Review and categorization Principle 2: Social and environmental assessment Principle 3: Applicable social and environmental standards Principle 4: Action plan and management system Principle 5: Consultation and disclosure Principle 6: Grievance mechanism Principle 7: Independent review Principle 8: Covenants Principle 9: Independent monitoring and reporting Principle 10: EPFI reporting Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest Principle 4: We will promote acceptance and implementation of the Principles within the investment industry Principle 5: We will work together to enhance our effectiveness in implementing the Principles Principle 6: We will each report on our activities and progress towards implementing the Principles Note: ESG Environmental, social, and corporate governance Sources: The Equator Principles (Equator Principles, 2003); UN Principles for Responsible Investment (PRI, 2009) Table II. The Equator Principles and the UN Principles for Responsible Investment An overview of CSR 747 their prot-oriented commercial activities and increase the well being of the society around them (Malovics et al., 2008). CSR and the supply chain In response to customer and shareholder concerns for corporate social responsibility (CSR), many buying rms are implementing programs within their supply chains aimed at ensuring suppliers act in a socially responsible way with respect to such labor practices and/or environmental issues. To transfer supply chain partners socially responsible behaviors, companies can use three management tools (Ciliberti et al., 2008): (1) establishing written supplier requirements; (2) monitoring supplier performance to verify compliance with the requirements; and (3) contributing to suppliers awareness building and training on the company policy about CSR issues. Monitoring suppliers behavior to ensure compliance is important but may damage buyer-supplier relationship. Therefore, a CSR implementation regime characterized by procedural justice rather than by greater monitoring is more likely to increase supplier compliance, and can improve rather than damage a buyers exchange relationships with their suppliers (Boyd et al., 2007). A study conducted in Italy reveals difculties in transferring CSR behaviors to small and medium sized enterprises that operate in developing countries. Some of these obstacles to diffuse CSR practices in developing countries include: cultural differences, low interest showed by customer in CSR, located and operating in developing countries, and corruption in general (Ciliberti et al., 2008). CSR strategies There are many external forces that drive organization to the path of CSR such as consumer demand for responsibly made products, challenges to organizations reputations by nongovernmental organizations (NGOs), industry codes of conduct, assessments and rankings of CSR performance, pressure from socially responsible investors through public interest proxy resolutions, as well as the socially conscious values of organizational managers and employees (Heslin and Ochoa, 2008). Heslin and Ochoa proposed seven principles where organization can embark on strategic CSR: (1) cultivate needed talent; (2) develop new markets; (3) protect labor welfare; (4) reduce your environmental footprint; (5) prot from by-products; (6) involve customers; and (7) green your supply chain. Strategic orientation of rms toward CSR philosophy can support both its nancial and stakeholders interests (Burke and Logsdon, 1996). Burke and Longsdon have proposed a model for strategic analysis of CSR which has ve dimensions: MEQ 21,6 748 (1) centrality (closeness to t to the rms mission and objectives; (2) specicity (ability to capture private benets by the rm); (3) proactivity (degree for to which the program is planned in anticipation of emerging social trends and in the absence of crisis; (4) voluntarism (the scope of discretionary decision-making and the lack of externally imposed compliance requirements); and (5) visibility (observable, recognizable credit by internal and/or external stakeholders for the rm). These dimensions should help managers develop CSR strategies that pay off. Husted and Allen viewed Burke and Longsdon model as not fully developed with testable hypotheses. In their study, Husted and Allen examined three (visibility, appropriability, and voluntarism) of the ve dimensions in more detail and set out a hypothesis of the relationship of each dimension to value creation. The other two dimensions, centrality and proactivity, do not affect value creation in the Spanish context where their empirical study was conducted. The conclusion of their study was that visibility is clearly understood to be related to value creation. To the extent that consumers and other stakeholders are perceived to observe CSR activity, they are able to reward rms for their participation. Appropriability also signicantly affects the creation of value through CSR projects. In other words, rms perceive that designing CSR projects with the intent to generate benets is necessary for value creation. Voluntarism is an essential element for the creation of value, but not in the direction hypothesized by Burke and Logsdon. They thought that greater voluntarism would lead to greater creation of value from strategic CSR projects (Husted and Allen, 2007). To increase a rms competitive advantage, CSR projects should be cost effective and produce a clear return on investment. CSR governance refers to organizing the activities of transferring of rm resources for the production of social goods and services. Husted describes three types of common modes of governance: (1) outsource CSR through corporate charitable contributions; (2) internalize CSR through in-house projects; and (3) use a collaborative model. When deciding on a mode, managers should consider two attributes: (1) coordination (autonomous or cooperative); and (2) motivation (incentive intensity or administrative control). The two drivers for internalizing CSR are the centrality and specicity as developed by Burke and Logsdon (1996). A decision matrix was developed for choosing among the CSR governance structures where specicity and centrality are treated as being only high or low when in fact they are both continuous. For example, if specicity is high and centrality is high, then the best CSR governance structure is an in-house project (Husted, 2003). Falck and Heblich (2007) propose a planning process of strategic CSR action. Decision-making is initiated by looking and evaluating a social trend. Once the trend is evaluated, then it will be determined whether any of the companys stakeholders are An overview of CSR 749 interested in it and its impact on the nancial system of the company. Depending on what is at stake and the type of committed resources, the company will choose a strategic action without any risk of opportunistic behavior on the part of competitors (exclusive stake) (Falck and Heblich, 2007). McWilliams and Siegel (2001) conducted an empirical study based on a framework of supply and demand model and CSR. Their hypothesize that a rms level of CSR will depend on its size, level of diversication, research and development, advertising, government sales, consumer income, labor market conditions, and stage in the industry life cycle (McWilliams and Siegel, 2001). A study conducted in the US modeled corporate investments in environmental research and development (R&D) as investments in corporate social responsibility. The theory and the empirical study support the hypothesis that socially responsible corporate investments in environmental R&D increase with corporate self-interest in reducing pollution caused by toxic emissions. Consequently, corporate environmental R&D investments depend on both public policy and the structure of markets (Scott, 2005). CSR and energy A study in the Baltic States (Lithuania, Latvia, and Estonia) investigated the problems and challenges of CSR in the energy sector, revealing that the main barriers to CSR development in the social sphere include: weak co-operation with stakeholders; weak NGOs, insufcient care in competence and motivation of personnel; low awareness of society about energy companies activities; indebtedness of heat consumers, high energy prices comparing with low average income of population reducing initiatives to pay higher price for green (renewable) energy or white energy (saved) support for socially responsible business in energy sector; and the lack of information and awareness (Streimikiene et al., 2009). The indicators used to monitor the sustainable development of the Baltic States include both sustainable and energy development indicators. The main sustainable development indicator used is the Human Development Index (HDI), which provides information on the main economic and social trends of the country and represents economic and social dimensions of sustainable development. The sustainable energy development indicators (Streimikiene et al., 2009) are: . increase in energy efciency which is expressed by energy intensity of GDP (primary energy/GDP, nal energy/GDP); and . increase use of renewable energy sources which can be expressed by share of renewables in electricity generation, share of renewable in total primary energy supply, and in use of biofuels in transport. Environmental challenges of Abu Dhabi, UAE The United Arab Emirates (UAE) is located in the Middle East and in the eastern part of the Arabian Peninsula as shown in Figure 1. The land is largely hot, dry desert. The UAE consists of the seven emirates. Abu Dhabi is by far the largest and controls 90 percent of all oil and natural gas reserves in the UAE. The UAE federal government recognizes that diversication of its economy plays a key role in maintaining growth. The other main industrial activities in the country include construction, aluminum, chemicals and plastics, metals and heavy equipment. MEQ 21,6 750 According to the state of the environment (SOE) report of Abu Dhabi (EAAD, 2009), the main source of air pollution in the country comes from the oil and gas industry followed by electricity and water desalination production. Over 90 percent of the water consumed in the country comes from desalinated water and this shows the coupling between energy and water. Natural gas fuels over 99 percent of total electricity generation, the remainder being based on oil. UAE and other Gulf states have the highest CO 2 emissions per capita and UAE has the second highest water consumption per capita after the United States of America (EAAD, 2009). Figure 2 shows the historical CO 2 emission in UAE (CDIAC, 2009). The Abu Dhabi Urban Planning Council (ADUPC) has developed the Plan Abu Dhabi 2030 (ADUPC, 2007). It is the most comprehensive visionary plan for the city of Abu Dhabi. This Urban Structure Framework Plan is rst and foremost grounded in the cultural and environmental identity of Abu Dhabi. The citys population may grow Figure 1. Location of United Arab Emirates Figure 2. Historical CO 2 emissions in UAE An overview of CSR 751 to three million or it may exceed ve million by 2030. Clearly, this situation will have important implications and will assert more pressures on existing infrastructure and institutions even without drawing upon the demand for RE technology. At the same time, it is clear that even though the plan covers most aspects of urban planning, it still lacks attention to the energy required to meet the comprehensive development plan. This omission could have serious consequences. Abu Dhabis energy demand and supply to meet electricity generation and water desalination is critical to the sustainable development of the city and must be dealt with very wisely because it could be the tipping point between success or failure of the plan. Abu Dhabi Water and Electric Company (ADWEC) is the government agency dealing with electricity and water needs not only for the Emirate of Abu Dhabi but for the whole country. Based on Plan Abu Dhabi 2030, ADWEC developed a projection plan for electricity and water demand which will almost triple by the year 2030. The mandate of ADWEC is to ensure that, at all times, all reasonable demands for water and electricity in the Emirates are satised (ADWEC, 2008). The Masdar Initiative in Abu Dhabi: a bold move In April 2006, Abu Dhabi took a bold and historic decision to embrace renewable and sustainable energy technologies. Hence, the Masdar Initiative was created. It is a multi-billion dollar comprehensive economic development program designed to leverage Abu Dhabis considerable nancial resources and energy expertise into innovative solutions for cleaner, more sustainable energy production and resource conservation. The Masdar Initiative has four primary objectives: (1) to help drive the economic diversication of Abu Dhabi; (2) to maintain, and later expand, Abu Dhabis position in evolving global energy markets; (3) to position the country as a developer of technology, and not simply an importer; and (4) to make a meaningful contribution towards sustainable human development. To implement the Masdar Initiative, Abu Dhabi government has created the Abu Dhabi Future Energy Company (ADFEC). ADFEC is a private joint stock company wholly owned by the government of Abu Dhabi through Mubadala Development Company. The following is a brief description of the different business units of ADFEC. . Property development unit. Overseeing the building of Masdar City. Masdars Special Free Zone (SFZ) is a unique, integrated Green Community in the heart of Abu Dhabi and will be completed in 2016. Renewable energy is main source of energy, 230 Megawatts, to power the city. The main RE technology used is the photovoltaics (PV), about 90 percent, which will be installed on the roofs of the buildings. The other 10 percent will come from other RE technologies such as concentrated solar power (CSP), biomass, and geothermal energy. Masdar City has commissioned in April 2009 its rst 10 MW PV power plant that will used to power the rst phase of the city. This is the rst power plant of its kind in the MEQ 21,6 752 region. The plant is also registered in the United Nations as a clean development mechanism (CDM) project eligible for carbon credits (CDM, 2009). . Industries. Main objectives is to invest in RE manufacturing plants around the world for both money making operations and to develop the technology know how and transfer it later to Abu Dhabi. ADFEC has identied both wind and solar as the most protable between all RE technologies. For example, ADFEC has already invested and built a thin lm manufacturing plant (to use in PV) in Germany using new technology that was developed by German scientists with ADFEC funding. Today, ADFEC will be building a second thin lm manufacturing plant in Abu Dhabi. ADFEC is investing in a wind turbine manufacturing plant in Finland and London Array offshore wind farm. . Carbon management. ADFEC signed several projects related to carbon capture and storage in Abu Dhabi and Bahrain. In addition, ADFEC is building a hydrogen energy plant in joint venture between British Petroleum (BP) Alternative Energy and Rio Tinto. They are working together on the front-end engineering design of an industrial-scale hydrogen-red power generation project with capture of the carbon dioxide (CO2), which would then be available for transportation and storage. The plant would be located in Abu Dhabi. Many of the CDM projects that are implemented in Abu Dhabi will contribute to the reduction of CO2 per capita emissions especially in the oil and gas industry. . Utilities and asset management. The objective of this unit is to build and operate RE (wind and solar) power plants in Abu Dhabi and abroad. The power is sold to local utility companies. One of their major investments in Abu Dhabi is Shams 1 (100 MW), which is one of a several CSP power plants that will be built in Zayed City. ADFEC is planning to build about 1600 MW of CSP plants by 2020. CSP is the most proven technology when it comes to a large-scale power generation in desert-like country. In addition, ADFEC has direct investment in 12 clean tech companies and invested in four leading green funds focusing on cutting-edge clean technology. . Masdar Institute of Science and Technology. Located in Masdar City and developed in cooperation with the Massachusetts Institute of Technology (MIT), the Masdar Institute emulates MITs high standards and offers masters and doctoral-level degree programs focused on the science and engineering of advanced energy and sustainable technologies. The Masdar Institute aims to become a centre of high-caliber renewable energy and sustainability research capable of attracting leading scientists and researchers from around the world and to develop a pool of highly skilled scientists, engineers, managers and technicians capable of accelerating the development of indigenous technology and enterprise in the region and globally. Masdar Innovations benets to economy and society The project represents a paradigm shift, a Middle Eastern oil-producer nation making a visionary and long-term commitment to the development of new forms of clean and sustainable energy. Masdar is a highly structured initiative, ensuring that all critical elements for success (workforce, technology, infrastructure and institutions) are put in place to create a sustainable and synergistic community capable of achieving tangible An overview of CSR 753 results of world-scale signicance. The project is innovative in its open engagement model, pooling an impressive array of some of the worlds best scientic and corporate resources to maximize the potential for impact, creative breakthroughs and eventual scale-up and broad deployment of new energy solutions for the global community (Clean Energy Awards, 2007). Although difcult to precisely measure, the following direct results are expected from the project by 2016: . 10,000 new high-quality jobs in the clean energy and sustainable technologies sector in Abu Dhabi; . 500 full-time Masters and PhD students, and 80 high caliber faculty at the Masdar Institute specializing in clean energy and sustainable technologies; . a multibillion-dollar expansion of the Abu Dhabi non-oil economy; and . the creation of a world-class scientic and research hub which is currently non-existent in the Gulf region; such a hub can become the core of other knowledge-based activities and industries in addition to clean energy. The whole society will certainly benet from the creation of the renewable energy sector through job creation, research and development in RE technologies, and graduate educational opportunities at the Masdar Institute. Society and the environment will benet through the accelerated use of renewable energies developed and/or produced at Masdar. Towards sustainability and social responsibility in Abu Dhabi Future Energy Company (ADFEC) CSR is not new to UAE, the Emirates Environmental Group (EEG), which has been active in the country since 1991 and established a CSR network in 2004 (EEG, 2009). The objective of the network is to establish collaboration with leading public and private enterprises on solving environmental problems and promoting sustainable development through the concept of CSR. In addition, many UAE organizations are current participants in UNGC. CSR and energy Building a renewable energy industry is a big challenge especially when workforce, institutions, and infrastructure do not have the experience. Therefore, the country will need the private sector to take the leadership role in close partnership with the public sector by providing technical expertise, nancial capability, and political power to safe sail UAE in the right direction. ADFEC is considered to be a Primary Mover and will leapfrog Abu Dhabi into the renewable energy sector and will ensure that the seven percent target that was set by the government of Abu Dhabi by 2020 is met. That is why ADFEC is trusted by the government to implement the Masdar Initiative and especially to eliminate many of the barriers of CSR development in the social sphere. ADFEC is currently working with all concerned stakeholders in order create a renewable energy sector in Abu Dhabi. The HDI for United Arab Emirates is 0.868. This is considered high and gives the country a rank of 39th out of 177 countries according the United Nations Human Development Report 2007/2008. UAE has shown MEQ 21,6 754 an upward trend for the past ten years. The HDI provides a composite measure of three dimensions of human development: (1) living a long and healthy life (measured by life expectancy); (2) being educated (measured by adult literacy and enrolment at the primary, secondary and tertiary level); and (3) having a decent standard of living (measured by purchasing power parity, PPP, income). CSR and the supply chain ADFEC is not trying to ensure sustainability and social responsibility within its company but also working with its suppliers to ensure such practices. Sustainability is part of every contract that ADFEC signs with its suppliers. One of the most visible problems in UAE is the Labor practice. UAE depends on foreign unskilled labor for its development. The government is cracking down on unsafe labor practices such as housing and working hours. ADFEC has established a Code of Conduct policy in addition to Contractors Temporary Living Quarters Guidelines. One of the major concerns in the region is unskilled labor living conditions and Masdar took the lead in establishing decent labor villages in Masdar City for the unskilled labor force building the city. CSR strategy This initiative since its inception had a positive and a propagating impact on local, regional, and global levels. The Masdar Initiative has been called many names that reect its global importance such as a Lighthouse, a Hydrogen Bomb, a Sustainability Laboratory, etc. Table III summarizes ADFECs role on the local, regional, and global sustainability levels. This is not a complete mapping of ADFEC sustainability and CSR practices but only a high level listing of the primary activities that shows how sustainability is core to ADFEC. Most of the activities listed in the table are in accordance to the United Nations Global Compact (UNGC) principles that are related to human rights, labor, environment, and anti-corruption. ADFEC will be a participant in UNGC soon. In addition, ADFEC is working with an international consultant to establish CSR policy and procedures for all its units and will be publishing its rst CSR report in December 2009. Also, ADFEC is working toward getting all the needed ISO certications such as ISO 9001 (quality), ISO 14001 (environment), and OHSAS 18001 (occupational health and safety) which will increase its credibility among its stakeholders. CSR in Masdar extends beyond the common understanding of social responsibility, corporate philanthropy and green washing; it is the core and the integral part of ADFECs business. It is corporate responsibility that covers sustainability, societal norms, and strives to be the change in a local and a global platform. For example, Masdar City has adopted all One Planet Living principles and ADFEC is keeping track of all its CO2 footprints. ADFEC is working with many NGOs including the local chapter of Worldwide Fund for Nature (WWF) to develop awareness program in the country regarding sustainability and renewable energy. The Masdar Institute is collaborating with WWF on establishing an ecological footprint program in UAE. An overview of CSR 755 ADFEC as a prime mover Workforce Skilled Will rely in the short term on expatriates but also ensuring the developing of national expertise by hiring and training UAE nationals (building local capacity) Unskilled Will remain depending on expatriates Human rights and corruption Establishing Code of Conduct and Contractors Temporary Living Quarters Guideline and other related policies for employees and establishing decent labor villages in Masdar City for the unskilled labor force living quarters in the city. Other related policies will follow Institutions Government agencies Working and advising government agencies on energy reform policies, land use planning reform, etc. Laws, regulations, and legislations Advising the legal branch of the government to create laws that will facilitate and speed up RE projects Private sector Building the capabilities of the local private sector in UAE by allowing it to participate in the different projects and in implementing green supply chain Financial institutions Advising local banks, with the assistance of global nancial banks, on how to participate in nancing RE projects in the UAE and abroad Taxes and tariffs Negotiating with the local government to come up with the best tariff reform policy that will benet all the stakeholders High school education Building environmental awareness with UAE Ministry and NGOs Tertiary education Building relations with all local universities through Masdar Institute to help develop their programs. 10-15 percent of students from local universities are considered to be main recruiting target for Masdar Institute Research and development institutions Masdar Institute in the heart of the Masdar Initiative. Full nancial support to R&D. Hiring top faculty and recruiting top caliber students Government-private sector cooperation A good model for government and private sector partnership Innovation factors R&D spending, university-industry collaboration, the number of patents generated from different projects, driving technology change, etc. Infrastructure Power plants Investing in CSP plants in Zayed with a capacity reaching 1,900 MW by 2020. Building the rst 10 MW PV power plant, registered at the UN as a CDM project eligible for carbon credits, in Masdar City Distribution networks Already UAE has excellent conventional distribution networks and grids but need to connect RE projects to them Connectivity Working with ADWEA and other related institutions and companies, by providing the expertise, to build the RE connectivity infrastructure and dealing with logistics, tariffs, and regulatory issues (continued) Table III. ADFECs role and impact on local and global sustainability MEQ 21,6 756 Conclusion This paper discussed the sustainability and the corporate social responsibility of ADFEC in Abu Dhabi and UAE. The success of Masdar Initiative will encourage others to start investing in renewable energy, which will eventually contribute to the social welfare of the society at large. But in order to ensure sustainable development and social prosperity of the country, all stakeholders (government institutions, private sectors, NGOs, public, universities, etc.) must be engaged in direct coordination and collaboration in order to develop the right energy policies, incentives to invest in RE projects, ensure the funding is available for research and development to develop RE technologies, put in place the needed market mechanisms for diffusing RE technologies, build public awareness, etc. ADFEC has the ability to leverage its own actions into the GCC, MENA and Southeast Asian regions. By providing the leadership and demonstrating that concrete results are possible Masdars spillover effect can be quite substantial. Masdar is driving the transition from an oil-based economy to more knowledge-based technology and service industries. The environment will also be a key beneciary of Masdar Initiative and the different RE and water resources technologies developed and applied by ADFEC can greatly enhance sustainable human development in the arid countries of the MENA region. ADFEC is striving to be ADFEC as a prime mover Impact on the local level Creating the rst sustainable city in the world, Masdar City, where the quality of life is of importance Creating the Silicon Valley of the renewable energy in UAE Developing the local human capabilities and capacities Developing local institutions and infrastructure Building unique thin-lm (PV) manufacturing plants in Abu Dhabi Creating the RE market in an oil rich country, which is a unique endeavor and a bold move ADFEC is partnering with local NGOs including Emirates Wildlife Society (EWS) and the local branch of WWF to build environmental awareness, and energy savings and efciency in UAE Reduction of CO 2 emissions and water consumptions per capita Impact on the global level: some people are calling Masdar a Lighthouse, Hydrogen Bomb, Sustainability Laboratory Making UAE a global leader in the RE sector Masdar is becoming a well-known brand around the world Investing in the best RE companies around the world Investing in RE infrastructure projects around the world Many countries regionally and globally are proting from Masdars experience and initiating similar projects (Dubendorf, Swiss Hub) Signaling a positive sign that oil-rich countries can be sustainable ADFEC has direct investment in 12 clean tech companies and invested in four leading green funds focusing on cutting-edge clean technology Masdar City is adopting One Planet Living principles Impact on climate change Contributing to reduction of global CO 2 emissions by investing in projects around the world related to energy efciency, renewable energy, and carbon capturing and sequestration Table III. 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He earned a BS in Civil Engineering from University of Florida, and a Masters and ScD in Engineering Management from George Washington University in 1988 and 1992 respectively. His research interests include Sustainable Development, Renewable Energy Management and Policy, Building Knowledge-Based Economies and Innovation Systems, etc. Touc Mezher is the corresponding author and can be contacted at: tmezher@masdar.ac.ae Nawal Al Hosani is the Associate Director of Sustainability at Masdar. Her responsibilities in Masdar range from conceptual thinking to execution, leading and coordinating the sustainability team, and introducing innovative integrative applications. Previously, she held senior leadership positions in the General Headquarters of Abu Dhabi Police (ADP). From 2002-2007 she was the Head of Design and Studies in the Projects Engineering Department. In 2007 she became the rst female Deputy Director in the history of ADP. She actively participated in a large number of Continuous Professional Development (CPD) courses to remain in the forefront of the social science and sustainable development debates. The selection of CPD courses reects her interest in project management methods, leadership, planning and decision support mechanisms. She was decorated with several medals and received special rewards for her professional conduct and excellence. She won a Chevening Fellowship from the Foreign and Commonwealth ofce of the UK. Recently (May 2008) she won the Emirates Businesswomen Award for professional and career achievements category. Nawal Al Hosani has a BSc in Architecture from UAE Faculty of Engineering and a PhD from the University of Newcastle upon Tyne, UK. Samer Tabbara is the Sustainability Education and Awareness Associate at Masdar. He focuses on corporate sustainability and integrating sustainability on Masdar City. Previously he held several design and development positions, the latest with Tameer as Sustainable Developments Manager. His experience includes the design and development of several signature and large-scale projects in the region. He also has extensive experience in Corporate Sustainability, Sustainability Cost Analysis; Energy Modelling; and Building Life Cycle Analysis. He is LEED-accredited and has a Bachelor of Engineering from the American University of Beirut and an MBA from Manchester Business School, UK. MEQ 21,6 760 To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints Reproducedwith permission of thecopyright owner. Further reproductionprohibited without permission.