Abu Dhabi National Exhibition Centre: Social Responsibility

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Table of Contents

Introduction
The Company’s Approach to Sustainability
Why the Company has Adopted the Strategy
How the Company is Implementing the Strategy
How the Strategy Furthers the Competitive Advantage of the Firm
Critique of the Company’s Strategy on its Performance
Recommendations
Conclusion
References

Introduction

In 2005, Abu Dhabi National Exhibition Centre (ADNEC) was born out of the growing need to foster the expo and conference business in the region and especially within Abu Dhabi. The company is a champion of social and environmental sustainability. As such, ADNEC has come up with a working sustainability policy, which has led to the winning of several awards both locally and internationally. Some of the sustainability awards that the company has won include the AOE Awards 2014 and 2015, the Middle East Event Awards 2010: Green Award, and the Middle East Event Awards 2011: Outstanding Contribution to Sustainability among others. This paper explores ADNEC’s approach to sustainability, why the company has adopted the strategy, and how it is being implemented. Additionally, the paper highlights how the strategy furthers or fails the company’s competitive advantage. A critique of the company’s strategy on its performance is given together with recommendations on the way forward.

The Company’s Approach to Sustainability

ADNEC seeks to incorporate the sustainability construct in its management structures as opposed to coming up with isolated practices towards the concept. The company’s management avers that creating isolated sustainability practices is tantamount to reinventing the wheel on the practice. Therefore, the company has adopted and incorporated best practices that have been in its strategic map from 2012 and have worked in other organizations before. ADNEC’s approach to sustainability touches on all stakeholders including the management, employees, service partners and suppliers, customers, community, and environment.

However, this paper focuses on ADNEC’s approach to social and environmental sustainability. Social sustainability deals with the communities surrounding the company in its areas of operations (Saeidi, Sofian, Saeidi, Saeidi, & Saeidi, 2015). On the other hand, environmental sustainability covers how the company treats the environment where it operates. ADNEC works closely with the surrounding community to enhance its social sustainability objectives by running different initiatives like charity donations. On the other hand, the company’s environmental sustainability initiative started in 2011 with the establishment of an internal green team to create awareness on the overarching need to practice environmentally responsible behavior. To date, ADNEC is extensively involved in different social and environmental initiatives within the Abu Dhabi region as highlighted in the following sections of this report.

Why the Company has Adopted the Strategy

ADNEC appreciates the role of corporate social responsibility (CSR) as a key pillar of social sustainability, which in turn contributes significantly to overall business success. According to Williams (2013), different studies have shown that companies that engage in social sustainability, as part of their CSR, perform better than their counterparts who do not participate in such practices. ADNEC understands that social sustainability means success for the company in the long term. By supporting social responsibility, ADNEC believes that its reputation will improve, which translates to more sales hence profitability.

Ultimately, the company’s objective is to create wealth for the shareholders and social sustainability is an important factor in this process. On the other side, the company has adopted environmental sustainability for different reasons. First, ADNEC understands the adverse effects of environmental degradation including global warming. Without a sustainable environment, business operations cannot run smoothly as employees will have health complications to function efficiently. Similarly, a sick customer base due to environmental pollution implies declining profitability for the company. Besides, Quairel-Lanoizelee (2016) asserts that in the contemporary changing business environment, customers are choosing to deal with environmentally conscious companies, and thus by branding itself as an environmental sustainability champion, ADNEC stands a good chance of attracting more clients, hence increasing profits.

How the Company is Implementing the Strategy

ADNEC is implementing the sustainability strategy by “developing a sustainability policy, enhancing the reporting framework, identifying clearer team responsibilities, developing a strategic theme for sustainability as part of the company’s strategy map, and developing a detailed CSR strategy” (ADNEC, 2015, p. 18).

By following its detailed CSR strategy, the company has implemented different community initiatives to further social sustainability. One of the key focus areas is giving positive support to the community. For instance, the company has partnered with three schools in Abu Dhabi to create environmental awareness for students coupled with collecting and recycling waste materials from the learning institutions. Additionally, the company is actively involved in charity work within the region. In March 2016, the company bought clothes from the Liwa Fashion clearance sale event and gave the clothes to orphans through the UAE Red Crescent. Also, ADNEC seeks to improve societal perception towards the company by creating employment for the locals among other practices. In 2016, Emirati nationals formed 23% of the company’s workforce. ADNEC also carries out the annual society perception surveys to measure how society views the company.

The internal green team takes care of the company’s environmental sustainability strategy. ADNEC’s environmental sustainability strategy centers on the usage and recycling of materials. In 2016, the company recycled 676.382 tons of waste materials, which amounted to a 52% increase from the previous year. ADNEC is among the pioneers of converting cooking oil into bio-diesel fuel within the Abu Dhabi region. In 2016, ADNEC recycled “143.45 tons of paper and cardboard and aluminum, thus reducing about 229 tons of carbon dioxide emissions and saving 2438 trees, 11.382 tons of plastic to save up to 28.5 kg of CO2, and 69.22 tons of food wastes, which saved 274.4 tons of CO2” (ADNEC, 2015, p. 49). Besides, the company focuses on energy and water conservation measures. For instance, ADNEC has installed 1,000 square meters of solar panels to produce 16,362 kWh, which is used to power elevators and lighting.

How the Strategy Furthers the Competitive Advantage of the Firm

In the contemporary changing business environment, customers are leaning towards dealing with social and environmentally conscious organizations (Lee, Lee, Pae, & Park, 2016). The CSR initiatives that ADNEC has implemented create a competitive advantage in two ways. First, partnering with schools to create recycling awareness improves the company’s reputation within the community. Additionally, the company has hired locals, which makes 23% of the workforce. Some of the locals have only secondary school education, and getting employment without advanced education is a way of empowerment. Ultimately, the community remains loyal to the company. As such, people spread a good message about the company, which is a way of marketing. Second, customers are becoming aware of the need to associate with socio-environmental sustainable organizations. Saeed and Arshad (2012) posit that customers are not only shopping for products but also organizations. Therefore, by observing environmental sustainability practices, ADNEC improves its reputation, which in turn appeals to more customers, hence increased profitability. Additionally, using solar energy cuts operational costs for the company as it saves money that could have been spent on electricity bills.

Critique of the Company’s Strategy on its Performance

ADNEC’s strategy on social and environmental sustainability has strengths and weaknesses like any other approach. The move to employ locals and partner with three schools to create awareness on recycling is laudable. The recycling concept cannot be overlooked in achieving a sustainable environment. However, this strategy has performed inconsistently on a year-to-year basis. For instance, in 2015, through the school recycling program, the company recycled 229kgs of plastic bottles, but that number fell to 98kgs in 2016. Moreover, the amount of waste materials recycled within Abu Dhabi is almost negligible given the overall waste materials released into the environment in the region. For example, in 2014, the school program recycled only 74kgs of waste, which is almost negligible. On the other hand, employing a paltry 23% of the locals is not good enough for social sustainability. 77% of the company’s workforce is made up of Asian, Arab, and Western expatriates. On environmental sustainability, the company has performed remarkably by installing solar PV systems in its parking. However, the energy created from the solar panels is only used to power elevators. Given the natural occurrence of solar energy, the company should have installed more panels to generate significant energy to be used in different operations.

Recommendations

As noted in the above section, ADNEC has tried in its quest to foster social and environmental sustainability. However, there is room for improvement and a better sustainability strategy. The company should focus on the following areas:

Employ more locals – perhaps the local community does not have the required academic qualifications and requisite skills to enter the company’s workforce. However, this scenario is an opportunity for the company to partner with learning institutions and offer internship opportunities for local students. The interning students can then be absorbed into the workforce after gaining the necessary exposure and skills.
The company can partner with more schools to create recycling awareness. The current three schools cannot make any significant environmental impact. Given that creating awareness through schools is not involving and resource-intensive, the company can afford to expand the program to include more schools.
On clean energy, the company needs to adopt electrical cars. Moreover, ADNEC should install car-charging stations in its car park as a way of creating awareness on the need to use clean energy vehicles.

Conclusion

ADNEC has come up with working policies and strategies in social and environmental sustainability. The company’s sustainability approach involves the local communities to foster their CSR objectives and improve reputation, which ultimately leads to increased profitability. Environmental sustainability is at the core of ADNEC’s programs where recycling, energy, and water conservation are valuable aspects of day-to-day operations. Nevertheless, the company can improve its performance by considering the recommendations given in this paper.

References

ADNEC. (2015). Abu Dhabi National Exhibitions Company: Sustainability report 2015. Web.

Lee, E., Lee, H., Pae, J., & Park, S. (2016). The important role of corporate social responsibility capabilities in improving sustainable competitive advantage.Social Responsibility Journal, 12(4), 642-653. Web.

Quairel-Lanoizelee, F. (2016). Are competition and corporate social responsibility compatible?: The myth of sustainable competitive advantage. Society and Business Review, 11(2),130-154.

Saeed, M., & Arshad, F. (2012). Corporate social responsibility as a source of competitive advantage: The mediating role of social capital and reputational capital. Journal of Database Marketing & Customer Strategy Management, 19(4), 219-232.

Saeidi, S., Sofian, S., Saeidi, P., Saeidi, P. S., & Saeidi, A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341-350.

Williams, O. (2013). Corporate social responsibility: The role of business in sustainable development. New York, NY: Routledge.

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