INSEAD SeminarChanging Business of Urban Sustainability

27th April 2010, The INSEAD Middle East Campus, Abu Dhabi

The Abu Dhabi Sustainability Group

A public-Private Partnership for Sustainability in the UAE

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Content

IV Sustainability, our challenge, our opportunity

Why is sustainability relevant to us?

V Sustainability, your challenge, your opportunity

II

What are we talking about?I

III Which are our sustainability challenges?

VI The Abu Dhabi Sustainability Group

About sustainabilitySustainability was defined for the first time in 1987 by the United Nations World Commission on Environment and Development as A development that meets the needs of the present without compromising the ability of future generations to meet their own needs.The primary goal of sustainability is meeting the basic needs of all and extending to all opportunities for a better life. It refers to three type of needs: Economic needs (access to wealth to cover, at least, basic human

needs) Environmental needs (access to clean and safe environment and clean

and safe products and services) Social needs (a catch-all dimension, includes access to work, education,

health, and culture amongst other needs).About sustainability management and reportingTo achieve sustainability, organizations can commit to adopt sustainability management practices, that is the systematic management of economic, environmental and social performance with the goal of optimizing benefits for both, business and society.To communicate progress regarding sustainability, organizations can commit to sustainability reporting, that is the incorporation of economic, social and governance information into public reporting in a systematic way that is linked to strategy and management processes.

What are we talking about?

Why is sustainability relevant to us?

About environmental sustainabilityHH Sheikh Zayed is remembered for his deep interest in his country's landscape, wildlife, and notably an unwavering determination to realize even the most ambitious goals. In a speech he delivered to mark the UAE's first Environment Day in February 1998, he articulated his beliefs:

"We cherish our environment because it is an integral part of our country, our history and our heritage. On land and in the sea, our forefathers lived and survived in this environment. They were able to do so only because they recognized the need to conserve it, to take from it only what they needed to live, and to preserve it for succeeding generations.

With God's will, we shall continue to work to protect our environment and our wildlife, as did our forefathers before us. It is a duty, and, if we fail, our children, rightly, will reproach us for squandering an essential part of their inheritance, and of our heritage".About co-responsibility and economic and social sustainability

While HH Sheikh Zayed acknowledged the responsibility that government must assume in conserving the natural environment, he also called upon individuals to play a role in ensuring the region developed sustainably, not only from an environmental perspective but also from a social and economic point of view.

Source: Embassy of the United Arab Emirates, HH Sheikh Zayed: A Special Tribute. Quoted by Zayed Future Energy Prize.

Which are our sustainability challenges?

Economic development: The Emirate of Abu Dhabi is witnessing a period of impressive economic development with projects worth millions like Saadiyat Island, a $27bn project which will convert the city in one of the culture capitals of the world. But, does this economic growth come at no cost to other areas?

Cultural District in Saadiyat Island

Abu Dhabi Performing Arts Centre by Zaha Hadid

Abu Dhabi Guggenheim by Frank Gehry

Abu Dhabi Louvre by Jean Nouvel

Which are our sustainability challenges?

Corporate Governance: Transparency and reporting in the GCC are below international standards (Fitch Ratings in The National, 08/02/2010, p. 7). As a consequence, a string of corporate scandals and lawsuits have hit the region since the credit crisis. Will the new UAE corporate governance law help to restore trust?

• .

Which are our sustainability challenges?

Wealth generation (economic diversification): In January 2009, The Government announced its 2030 Economic Vision, a strategy that aims to safeguard the Emirate’s future by diversifying its economic base to lessen its dependence on oil. This will require channeling resources to aid the growth of other economic sectors (AD Economic vision 2030, November 2008).

A strategic game plan to diversify Abu Dhabi’s economy away from oil will require at least $167.5 billion from the government coffers in the next five years. Bulk of this budget (51%) has been earmarked for construction projects, with other key non-oil sectors such as tourism, industry, water and power set to receive 20%, 10% and 6%, respectively. The remaining 13% of the total budget, however, will be spent on oil and gas.

Data Source: Abu Dhabi Chamber of Commerce and Industry

Which are our sustainability challenges?

Wealth distribution (employment): 14% unemployment rate for Emiratis in Abu Dhabi. Chronic problems in education, and disincentives to join the workforce are a main challenge for economic development. How can the UAE share the nation’s wealth while fostering a commitment to the national project through the work of its citizens in both the public and the private sector? (The National, 25/01/2010).

Which are our sustainability challenges?

Wealth distribution (wages): Increasing number of labour violations and complains in the UAE for late payments (Ministry of Labour in The National, 08/02/2010, p 6). As a response the Ministry of Labor has established the Electronic Wage Protection System (EPWS) (Khaleej Times, 27/01/2010) and has distributed the guidebook “The worker: rights and duties” Will this measures help to address other pressing economic issues affecting unskilled migrant workers such as low salaries and financial exclusion?

Which are our sustainability challenges?

Environmental sustainability: The UAE state of environment represents a significant challenge. We have one of the world’s highest ecological footprint.

Energy: The UAE has a high per capita level of greenhouse gas emissions due to intensive air

conditioning, high reliance on private transportation, and dependence on oil as a key source for energy (H.H. Sheikh Khalifa bin Zayed Al Nahyan, UAE President in UAE Interact, 20/01/2010)

Waste: The UAE has one of the world's highest per capita levels of domestic waste: Abu Dhabi annual average 730 Kg; US 710 Kg, Australia 690 Kg and UK 300 Kg (uae.gov.ae).

Water: The UAE has one of the world's highest per capita water consumptions 550 litres per day, despite having a hyper arid climate. This risks the depletion of water reserves within 50 years (H.H Sheikh Hamdan bin Zayed Al Nahyan, UAE Deputy Prime Minister and Chairman of EAD in UAE interact, 22/03/2009).

Which are our sustainability challenges?

Social equity: Although the UAE is one of the most cultural diverse societies in the world where modernity and tradition coexist peacefully, the UAE faces multiple socioeconomic challenges related to demographic unbalances and disparities between citizens and residents:

Challenges that affect citizens: related to the rapid pace of development and its impact on culture and heritage, as well as to the need to ensure the equal participation and contribution of women to the emirate prosperity and success.

Challenges that affect residents: related to equal access to health, education, housing, decent work and rule of law.

Which are our sustainability challenges?

Loyalty: “In order to enhance the national loyalty in future generations we need to exclude the artificial discrepancy between fixed and changing methods, between the Arabic language and foreign languages, between UAE citizens and expatriate residents and between the past and the future“ (Dr Fatima Al Shamsi, Secretary General of the UAE University during the forum National identity and media: reality and possibilities in Gulf News, 27/01/2008)

Sustainability, our challenge ...

• In this scenario a fundamental question arises: is it possible for current levels of growth to continue while also preserving the livelihoods and quality of life for future generations?

The future will be very challenging unless action is taken (H.H Sheikh Hamdan bin Zayed Al Nahyan, UAE Deputy Prime Minister and Chairman of EAD in UAE interact, 22/03/2009).

Although the challenges faced by the UAE are many, the most important issues (increasing rates of economic growth and population, which led to increased consumption in the areas of energy, water and waste production) can be overcome through proper planning, development strategies and concerted efforts (H.H Sheikh Hamdan bin Zayed Al Nahyan, UAE Deputy Prime Minister and Chairman of EAD in Emirates News Agency, 03/02/2009).

... our opportunity

• We still have the opportunity to reverse the situation and improve the quality of life in Abu Dhabi in the present and long into the future.

• This can be achieved through a triple approach:

Policies: Political will and resources to support clear and effective policies Values: Collective responsibility

• Government entities, business and not for profit organizations should be partners in working towards achieving the goal of economic, environmental and social sustainability.

Actions: Sustainability management and reporting

• This approach will make a major contribution to ensure a more balanced development and to secure our competitiveness in global markets.

Sustainability, your challenge ... your opportunity

• How can your organization optimize benefits for both, business and society?1. How can you contribute to address the economic, social

and environmental needs of citizens and residents from your core business?

Economic needs (give one example)Social needs (give one example)Environmental needs (give one example)

2. How can covering these needs contribute to minimize business risks and maximize opportunities?

Minimize business risks (give one example)Maximize opportunities (give one example)

The Abu Dhabi Sustainability Group

The Abu Dhabi Sustainability Group (ADSG)

The ADSG was established in June 2008 to address some of the economic, environmental and social challenges faced by the Emirate of Abu Dhabi.The ADSG is a forum of government entities, private companies and not for profit organizations who have committed themselves to work in partnership to adopt best sustainability management and reporting practices.

The Abu Dhabi Sustainability Group

May 2008H.E. Al Bowardi, Secretary General of the AD Executive Council and Managing Director of EAD invites representatives from the sectors participating in the AD EHSMS (Energy, Industry, Transport, Tourism, Health, Oil and Gas, Construction and Building) to join the ADSG.

June 2008The ADSG is established as a forum of members who have signed the ADSG Declaration committing themselves to adopt best sustainability management and reporting practices.

Launching (2008) Lying the foundations (2009) Outreach

(2010)

November 2008The General Secretariat is established with 5 elected members: ADICO, ADWEA, Aldar, Emirates Foundation, Dolphin Energy, and 2 permanent members: Executive Council and Environment Agency.

March 2009The Charter is approved by the founding members stating the mission, goals, governance and rights and duties.

The ADSG action plan 2009 is approved. Training activities are initiated with three workshops: sustainability management, reporting and stakeholder management.

May 2009One-on-one technical support starts to provide assistance to members to document their business case for sustainability.

June 2009EAD sets up a sustainability unit to provide strategic and operational support to the ADSG General Secretariat and its members.

June-December 2009

The ADSG approves a value proposition for members based on a range of P&S designed to achieve its six strategic goals. The ADSG approves the membership criteria and membership process.

January-March 2010

The ADSG action plan 2010 is approved. Training activities continue with a workshop on Sustainability reporting.

April-June 2010Training activities continue with a workshop on Transparency in the Value Chain; Quarterly meetings are open to guest speakers, Four flagship programs are launched; ADSG leads an Abu Dhabi/UAE Delegation to the GRI Global Conference on Sustainability and Transparency. The ADSG Portal and the ADSG newsletter are launched. The 15 founding members issue a sustainability report.

Milestones

ADSG members (as of 14/02/2010)

Government organizations (11)• Abu Dhabi Chamber of Commerce & Industry (Industry)*• Abu Dhabi National Oil Company (Oil and Gas)• Abu Dhabi Tourism Authority (Tourism)• Abu Dhabi Urban Planning Council (Construction)• Abu Dhabi Water & Electricity Authority (Water and Energy)• Department of Municipal Affairs (Construction)• Department of Economic Development – Abu Dhabi (Economy)• Department of Transport (Transport)• Environment Agency – Abu Dhabi (Environment Protection)*• Health Authority - Abu Dhabi (Health)• Higher Corporation for Specialized Economic Zones (Construction) Private companies (8)•  AL DAR Properties (Construction)• Aramex Abu Dhabi* (Logistics)• Dolphin Energy (Energy)• Etihad Airways (Transport)• Masdar - Abu Dhabi Future Energy Company (Construction)• Mubadala Development Company (Investment)• National Bank of Abu Dhabi (Financial services)• Sorouh Properties* (Construction) Not for profit organizations (1)•  Emirates Foundation (EF)

The Abu Dhabi Sustainability Group

* Reporting members as of 14/02/2010

The Abu Dhabi Sustainability Group Declaration

We, the undersigned, Abu Dhabi Sustainability Group founding members Hereby declare our commitment to work together in adopting sustainability as the fundamental approach in developing and executing strategic policies and using integrated management of our economic, environmental and social performance for the purpose of realizing the vision of H. H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, and the vision of Abu Dhabi Emirate to achieve sustainable development, build a cohesive society and an open economy capable of global competitiveness.

We commit ourselves to do everything in our power, with our partners in this group, through the introduction of sustainability management practices, to improve management methods and decision making, reduce risks, and encourage use of technological applications to support sustainable economic and social growth.

We also commit to publishing an annual report that explains our sustainability management approach and an evaluation of our environmental, economic and social performance. We pledge this in a spirit of cooperation and open dialogue to ensure the highest levels of transparency; and we commit to supporting national plans and strategies.

The Abu Dhabi Sustainability Group

Goal 1: Raise awareness and understanding of sustainability amongst members and in the Emirate of Abu Dhabi

Products & Services

Goal 2: Encourage the integration of sustainability practices by member organizations

Goal 3: Provide a forum for experience sharing in sustainability management practices, good governance and sustainability reporting

Goal 4.1: Support sustainability initiatives within the Emirate of Abu Dhabi

Goal 4.2: Enhance opportunities for international recognition

Goal 5: Encourage the adoption of sustainability management by other organizations within the Emirates of Abu Dhabi and promote the benefits of ADSG membership

Goal 6: Issue an annual report to the CEO/MD Leadership Group

Training (quarterly) One-on-One support Innovative collaboration

GS meetings Forum quarterly meetings CEO/MD meetings Annual Forum

Flagship programs

Partnerships Conferences

Membership Presentations Lectures Press releases Articles

Strategic planning Operational planning Execution Assessment Reporting

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Strategic GoalsKnowledge

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Experience

Advocacy

Networking

Outreach

Performance management

Portal Newsletter (quarterly) Publications Seminars (quarterly)

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The Abu Dhabi Sustainability Group

Sustainable procurement, Sustainable ICT Sustainable Waste

management Sustainable labor practices

The Abu Dhabi Sustainability Group

ADSG Portal Sustainability reports

Thank You

Eva RamosSenior Sustainability SpecialistSustainability Unit

Policy and Strategy SectorEnvironment Agency-Abu Dhabieva.ramos@ead.ae

Disclaimer: This presentation reflects the opinions of the author and do not necessarily reflect the opinions of the ADSG or its members.