Corporate Social Responsibility Report 2010...Welcome to the first Etihad Airways Corporate Social...

Corporate Social Responsibility Report 2010

OUR JOURNEY

HH Sheikh Khalifa bin Zayed Al NahyanPresident of the UAE and the Ruler of Abu Dhabi

HH General Sheikh Mohamed bin Zayed Al NahyanCrown Prince of Abu Dhabi and Deputy Supreme

Commander of the Armed Forces of the UAE

2 Etihad Airways CSR Report 2010

C O N T E N T SFrom the Chief Executive Officer 4 | Etihad today 6 | Sustainability vision 8

Corporate social responsibility at Etihad Airways in 2010 9 | Stakeholders 10 |Together 12

Together Greener 14 | Growing Together 22 | Working Together 26 | Giving Together 30

Corporate governance 34 |Global Reporting Initiative 36

Report parameters

This report is Etihad Airways’ first report on its Corporate Social Responsibility performance.

In this document, we outline our policies with regard to the four core areas of our social responsibility efforts - the environment, the workplace, our community and our charitable efforts – and we report on our activities and results in each of these areas.

The formal reporting period is from 1 January 2010 to 31 December 2010; however, as this is our first report, there are a number of elements of our airline’s eight-year history that we also cover.

Etihad has no subsidiaries on which to report; nor do we have joint ventures on which it would be relevant to report.

How we have defined this report’s content

Our CSR team members conducted a series of workshops and stakeholder engagement exercises (described in the report) to help define the scope of the report.

Throughout this process, we used the Global Reporting Initiative (GRI) frameworks as a guide. We have recognised a number of principles in doing so:

Scope: • The report aims to cover all relevant aspects of our operations, in the air and on the ground. In this first report, our main focus for the on-the-ground section is the hub of our operations, in Abu Dhabi.

Materiality: • We believe the report’s scope covers the major issues that are recognised as important by our internal and external stakeholders.

Data collection and publication: • We have aimed for accuracy in collection of all relevant data, and we aim to be as transparent as commercial restrictions allow in publishing such data.

Subsidiaries / joint ventures etc: • This report covers the operations of Etihad Airways.

Reporting cycle:• Our intention is to report on an annual basis.

This report has not been externally assured.

For further information on Etihad’s CSR activities, or for questions on this report, please contact: [email protected]

Welcome to the first Etihad Airways Corporate Social Responsibility Report.

Etihad is a global ambassador for the Emirate of Abu Dhabi, and one of its most visible brands in the international arena. That places a heightened responsibility on our business to engender and promote the government’s well-established sustainability agenda, which affords tremendous value to:

The preservation of the Emirate’s cultural traditions and • natural environment;

Support for those suffering the effects of disease, poverty • or natural disaster around the world;

The wellbeing and future prospects of the Emirati people • and society, and

The diversification of Abu Dhabi’s economy to be less • reliant on hydrocarbons and equipped to prosper in an increasingly energy-scarce world.

Looking back on just our seventh year of operation, we have grown to this point rapidly while maintaining a strong focus on our social and environmental impacts, which we see as inextricably linked with our financial sustainability.

The safety and wellbeing of our customers and employees is, at all times, our greatest concern. We allocate enormous resources to maintaining the highest levels of flying safety and we provide state-of-the-art health and wellbeing facilities to our more than 8,000 staff members and their families.

We operate the newest, most environmentally efficient aircraft in the skies, while our operations teams work tirelessly to reduce the airline’s fuel burn and emissions and to identify greener suppliers and partners.

We are founding members of the Masdar Institute’s Sustainable Bioenergy Research Consortium in Abu Dhabi, providing substantial financial and in kind contributions in support of research into the use of salt water tolerant plants as the basis for alternative aviation fuels.

We are a major employer, directly creating opportunities for employees and their families from more than 120 countries, and indirectly generating thousands of jobs across the UAE and our network.

The airline gives generously to disaster relief efforts and third-world education initiatives while our employees also give generously of their own time and resources to those less fortunate.

Finally, as a driver of tourism to Abu Dhabi we play a critical role in promoting Abu Dhabi’s rich culture and heritage.

Our Emiratisation program is creating a new and indigenous generation of aviation professionals. They receive the industry’s best training, are exposed to all facets of the airline business, are equipped to lead Etihad Airways into its very bright future, and are well-placed to pass on their skills and experiences to future generations of UAE nationals.

The publication of this report is a formalisation of Etihad’s suite of sustainability programs under one banner. This first report focuses on our efforts to date. We are committed to continued an open reporting on an annual basis from now on.

I look forward to a continuing and open dialogue with our stakeholders.

James Hogan

From the Chief Executive Officer

4 Etihad Airways CSR Report 2010 Etihad Airways CSR Report 2010 5


Etihad Airways, the national airline of the United Arab Emirates, is based in its capital Abu Dhabi. Etihad was set up by government decree to be a key driver of the Emirate’s economic diversification and growth program, outlined in the Abu Dhabi 2030 Plan, and is wholly owned by the government of Abu Dhabi.

From 2003 to 2006, Etihad Airways grew faster than any other airline in commercial aviation history, according to a study by Booz & Co. As the three-year start up phase came to an end, the Board appointed a new management team to consolidate the airline’s growth and align its development still more closely with the Emirate’s economic aspirations and development strategy.

We currently serve 72 key business and leisure destinations in Africa, Asia, Australia, Europe, the Middle East and North America, operating a young, safe and fuel-efficient fleet of 61 aircraft comprising five fleet types.

With 68 per cent of destinations served by at least daily frequencies, Etihad carried 7.3 million passengers in 2010 with an average seat load factor of 74 per cent. The network is further enhanced through the airline’s 32 code-share partners. The airline’s average on-time performance is 87 per cent with a track record of 99 per cent dispatch reliability.

In 2010 our revenues rose to USD 2.95 billion. In 2011, we expect continued double-digit revenue growth to reach break-even; a remarkable achievement in just eight years.

Etihad is safety-certified by the International Airline Transport Association’s (IATA) and the General Civil Aviation Authority (GCAA) in the UAE.

In July 2008, we announced a then record-breaking order for up to 205 new aircraft at the Farnborough International Airshow, including firm orders for 55 Airbus and 45 Boeing aircraft. The transaction remains one of the largest in commercial aviation history and will allow Etihad to meet long-term demand for the period from 2011 to 2020.

Today, Etihad is a global business contributing in the region of AED 25.1 billion (USD 6.8 billion) to the economy, according to a study conducted by Oxford Economics in 2010.

To deliver this performance, Etihad has a skilled management team and a well defined organisational structure supported by 8,083 employees, representing 123 nationalities.

Etihad operates under a rigorous corporate governance structure. The Board comprises leading figures from Abu Dhabi’s business community. Our Board members are HH Sheikh Hamed bin Zayed Al Nahyan (Chairman), HH Sheikh Khaled bin Zayed Al Nahyan (Vice Chairman), HE Ahmed Ali Al Sayegh, HE Mohammed Mubarak Fadel Al Mazrouei, HE Hamad Abdullah Al Shamsi, HE Mubarak Hamad Al Muhairi and HE Khalifa Sultan Al Suwaidi.

Etihad Airways aims to fly 25 million passengers a year to at least 100 destinations by 2020.

Etihad today


AIRLINE START-UP

Operational Mandate

2003-2004 2011

SELF-SUSTAINABLE BUSINESS

Brand• Product and service• Network reach/connectivity• Strong growth• Revenue maximisation• Cost minimisation• Pay for performance •

2006-2007

Financial• Reporting • Mitigate financial risk• Start up work force• Governance•

COMMERCIAL MANDATE

2008-2009

LARGE AIRCRAFT ORDER

Network/Fleet • Capital plan to •

accommodate fleet orderLinkage to Abu Dhabi Plan• Major hiring ramp up • Change in leadership •

structure

Etihad development

6x B777-300ER

11x A340-500/600

19x A330-200/300

15x A319/320

2x MD11F

2x A330-200F

2x A300-600F

Current fleet at December 2010

10x A380

10x B777

25x A350

35x B787

3x A330

20x A320

Aircraft on order at December 2010*

* Firm deliveries, excluding 105 options and purchase rights

Objectives

Drive individual and corporate awareness of the • necessity of living and working sustainably.

Develop capability and capacity in Etihad to manage • the ongoing sustainability agenda.

Meaningfully and regularly consult with and engage all • our stakeholders at the hub and across the network to:

ascertain their expectations and needs, and –

implement initiatives that show a genuine – commitment to meet those expectations;

Set and manage meaningful targets to improve • continuously our sustainability performance based on globally identified, material criteria, our shareholder mandate and stakeholder expectations.

Create tools and initiatives that allow our core • stakeholders to participate: for example, staff participation (training & reward); customer participation (voluntary carbon offset); and supplier participation (public/website recognition of adherence to Etihad policies).

Measure and report honestly and transparently our • performance in identified and material criteria.

Promote our CSR activity through the full range of • traditional and new communications channels and in effective reporting.

Continue to align Etihad CSR and sustainability policy • and activity with the objectives in the Abu Dhabi 2030 Plan.

Sustainability vision


To be recognised as a sustainable airline that operates to the highest standards of safety, with integrity and transparency.

Corporate social responsibility at Etihad Airways in 2010

Sustainability mission

Social responsibility and sustainability will be at the core of our business.

We will ensure that sustainability is integrated and integral to our day-to-day business operations and practices, and is embedded in every layer of business thinking, planning and execution. All material financial, environmental and social impacts will be accounted for and measured and managed across our operations in line with international best practice.

Etihad acknowledges its position as an integral part of society and its potential to have both positive and negative impacts on the communities in which it operates. Aligned with the greater ambitions and vision of the Emirate of Abu Dhabi, the CSR and sustainability policy and supporting strategy is designed to ensure our compliance with all applicable international and local regulations and standards; mitigate any potential risks, and enhance the airline’s reputation through the implementation of industry best practice in the fields of sustainability and social responsibility.

Active and ongoing stakeholder engagement with the broadest range of stakeholders is essential to our CSR strategy and program.

During 2010, our CSR team members conducted a series of workshops and stakeholder engagement exercises to identify our major stakeholders, to begin to understand their concerns and interests, and to help define the scope of the report.

These exercises identified stakeholder audiences which we believed had an interest in and/or a necessity to know about Etihad’s CSR activities. They include:

Employees• Our shareholder• Customers• Our supply chain, in Abu Dhabi and internationally• Our business partners• The local community in Abu Dhabi• National and international regulatory bodies• The wider air travel industry• Channels which reach these audiences, such as •

the media and non-government organisations

We conducted our first focus groups in June 2010, covering employees and our customers.

Stakeholders

GUESTS

ETIHAD

SHAREHOLDERS

PARTNERSHIPS

SOCIETY• Corporate social responsibility • Environment

• Alliance/codeshare partners• Manufacturers• Travel trade• Abu Dhabi service providers• Abu Dhabi hub operators• Financial institutions

• Board members• His Highness the Crown Prince of Abu Dhabi

• First class customers• Business class customers• Economy class customers• Transfer customers• Family group• Worker traffic • Ad hoc charters

OUR PEOPLE

Stakeholder relationships

Etihad Airways CSR Report 2010 11 10 Etihad Airways CSR Report 2010

The first groups included employees representing all disciplines and levels of staff in London, Mumbai and Abu Dhabi – destinations selected for their importance on the network and for their cultural diversity. We also held one group session with frequent Etihad guests in Abu Dhabi.The aim of these first discussions was to identify priority areas related to the environment, the workplace, and the community, and to further investigate the best ways of communicating information about CSR activities.Key issues raised included:

A definition of the scope of the airline’s CSR efforts • and activities

The importance of environmental performance in • our operations

The desire for employee engagement at all levels• The importance of our contribution to the national •

and local communities in Abu Dhabi

Further activities to engage with external stakeholders, including the Board of Directors, the Abu Dhabi government, the local community and passengers.

The outcomes of our ongoing stakeholder dialogue will be used in shaping and driving our CSR and sustainability agenda.

We believe that CSR is a collaborative process, and one that will only succeed in partnership with our broad range of internal and external stakeholders. This is why we have called our CSR and sustainability program Together.

Together provides a four-part policy and communications framework for engagement with all our stakeholders - our staff, the local community and economy, the environment, and the greater communities across our global network.

• Together Greener• Growing Together• Working Together• Giving Together

In these four areas, it is our aim to work collaboratively in: • Identifying and developing awareness of the issues and challenges; • Focusing action to address these challenges; and • Making a difference, through measurable improvement, year on year.

Focusing on prioritiesAs a leading brand and influential UAE business, and part of an industry with unique environmental and sustainability challenges, it is imperative that our CSR strategy is able to focus on areas of most concern. This needs to take account of opportunities as well as risks, challenges and impacts. With this in mind, materiality is high on the agenda and our strategic programs allow us to look at issues under four areas, and focus on these while continually reviewing the appropriateness of our actions.

Etihad Airways CSR Report 2010 13 12 Etihad Airways CSR Report 2010


Etihad’s environmental strategy and program is implemented in conjunction with industry partners, suppliers and customers. While focused primarily on measuring, managing and minimising the environmental impact of our operations, it is linked to broader sustainability goals and includes proactive initiatives to develop cleaner technologies such as biofuels; to encourage environmental improvements across our supply chain; the implement a comprehensive waste management program; and initiatives to engage our customers in positive environmental action.

Carbon management

Aviation features more prominently in the environmental debate than any other form of transport, despite the range and depth of improvement that has been made by the industry in the last 20 years. A key element of this success has been the involvement of a broad range of partners in seeking opportunities and implementing initiatives.

Whilst contributing just two per cent of the world’s man-made carbon emissions, significant attention is focused on aviation’s contribution to the world’s carbon footprint. The basis for this is the increasing global demand for air travel with particularly heavy growth in developing economic regions and in the growth of the low cost airline sector. Demand for air travel has grown on average by five per cent per annum over the past 30 years and airlines now carry 2.2 billion passengers per year.

Measuring emissions and materiality

As a growing international airline, Etihad has many activities and operations that affect and possibly impact negatively upon the environment, most notably through our aircraft operations but also from running our supporting head office, outstation offices, call centres, sales offices, and in the provision of ground transport services for our staff and customers. We outsource many of our essential services, including aircraft maintenance, in-flight catering, ground handling and additional transportation services.

When it comes to measuring our carbon footprint associated with these activities, we need to ensure we do this taking into account relevance, data completeness, consistency, transparency and accuracy. These principles are taken from the Greenhouse Gas (GHG) Protocol, which provides comprehensive guidance on accounting for and reporting on greenhouse gases.

The current scope of our carbon footprinting is based on the direct operations of our aircraft, the electricity, chilled and potable water for our head offices, and our other main facility, Etihad Plaza, which comprises our staff housing and facilities complex, including shops, banks, the medical centre and gymnasium.

Etihad Airways Environment Policy

As the national airline of the United Arab Emirates, wholly owned by the government of Abu Dhabi, Etihad Airways is an important driver of economic growth and diversification in the country.

While operating under a strict commercial mandate from our shareholder, we recognise our responsibility to the community and are committed to mitigating the impact of our operations on the environment. To achieve this Etihad pledges to:

Abide by all national and international environmental • legislation that applies to our business;

Put in place the measurement systems and working • procedures to allow us to track and modify our environmental performance;

Innovate to reduce our dependency on traditional forms of • energy and aviation fuel;

Train our staff on the importance of environmental • protection in our business operations and on their individual responsibilities; and

Communicate and report openly and transparently on our • environmental performance to all our stakeholders including employees, customers, suppliers and partners.

We hold it as a fundamental principle that true success requires the engagement and participation of many different partners, within the markets in which we operate and across the air travel industry as a whole, and therefore aim to:

Encourage collaborative action and play an active role in • industry debate on environmental issues; and

Work with industry bodies such as the International • Civil Aviation Organization (ICAO), the International Air Transport Association (IATA), the Arab Air Carriers Organisation (AACO) and with local government and non- government partners on identifying issues and developing common solutions.

The environment is a joint responsibility and every member of our workforce has a duty of care to uphold this policy, limit their individual impact on the environment, and actively work to mitigate the potentially harmful impacts of our business on the environment.

“Since 2006, we have achieved a 19 per cent improvement in CO2 emissions per passenger kilometre.”James HoganChief Executive Officer

Etihad Airways CSR Report 2010 15


Sources:1. As per EU Emission Trading Scheme2. Petrol and diesel: http://timeforchange.org/what-is-a-carbon-footprint-definition 3. Includes electricity used by heat pumps and electricity used by electric boilers. Main source: http:// www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=AE4.Estidama Credit RE-R1 Minimum Energy Performance : COP (Coefficient of Performance of 4.5 for District Cooling Plant)5.Average benchmark data for desalination (http://www.ecobuild.co.uk/var/uploads/exhibitor/3862/pkwybghq5k.pdf)

5,0004,5004,0003,5003,0002,5002,0001,500 500

2006 2007 2008 2009 2010

Tonnes CO2

1009590858075656055

% improvement in CO2/RPK900800700600500400300200100

2007 2008 2009 2010

5045403530252015105

Aircraft emissions are by far the most material environmental factor for Etihad, accounting for 99.7 per cent of the airline’s currently quantified carbon footprint.

We track the total carbon dioxide (CO2) emissions from our aircraft operations and, to more realistically monitor efficiency improvements, we track emissions per passenger kilometre and per tonne kilometre on all routes. Our comprehensive fuel measuring systems allow us to track and report on specific routes, per aircraft type, or by region.

While the total emissions are growing in line with our fleet expansion, the emissions per Revenue Passenger Kilometre (RPK) show a clear downward trend since the commencement of operations. This is influenced by measures to improve operational efficiency, the introduction of more efficient aircraft, technological improvements to our existing fleet, and improved load factors.

These key areas of investment and technical and operational controls have together led to a significant improvement in fleet efficiency and, since 2006, a 19 per cent improvement in CO2 emissions per passenger kilometre.

Investment

Investment plays an essential role in the sustainability of aviation. Operating new and efficient aircraft directly contributes to managing emissions and provides a long-term win-win situation from both financial and environmental perspectives. Etihad has invested substantially in the development of its fleet and the current fleet has an average aircraft age of less than four years, as compared to the global industry average aircraft age of 13 years.

Introduction of a new aircraft can result in immediate and substantial emissions reduction. The replacement of the MD11 freighter with our new A330-200F freighter has reduced carbon dioxide emissions. On the Abu Dhabi to Frankfurt flight this has been calculated to result in an average reduction of 14,800 kilograms of CO2 for the entire flight.

In addition, we track fuel use on our own fleet of 40 vehicles, which range from saloon cars to 20-seater buses used primarily for the transportation of our crew to and from the airport. The nature of our business means that the operation of our aircraft represents by far the most material (relevant) aspect of our business, accounting for over 99 per cent of our measured carbon footprint.

As recommended under the GHG protocol we are focused on those areas that are under our control and are measurable. Other areas will be subject to controls, through policies, procedures and best practice guidelines, including the offices across our network.

Scope 1 Conversion Factor CO2 total (kg) % Total

Aircraft (1) 3.15 kg/CO2 4,504,022,226 99.7o%

Ground vehicles (Petrol) (2) 10.4 kgCO2/gal 962,342 0.02%

Ground Vehicle (Diesel) (2) 12.2 kgCO2/gal 5,719,559 0.13%

Scope 2

EY Complex electricity (3) 0.863 kgCO2/kWh 1,215,852 0.03%

EY Plaza electricity (3) 0.863 kgCO2/kWh 569,890 0.01%

EY Complex district cooling water (4) 0.674 kgCO2/tonne of cooling 2,937,504 0.06%

EY Plaza district cooling water (4) 0.674 kgCO2/tonne of cooling 2,207,080 0.05%

EY Complex potable water (5) 1.68 kgCO2/m3 137,021 ≥0.01%

EY Plaza potable water (5)

(Excluding residential)1.68 kgCO2/m3 4,949 ≥0.01%

TOTAL CO2 emissions 4,517,776,423 100.00%

In the air

The carbon emissions associated with material activities both in the air and on the ground are measured according to multipliers available from suppliers and international data publications, such as the Greenhouse Gas Protocol.

We continue to develop the scope of our greenhouse gas measurement and reporting, based on the principles of the Protocol and ensuring that such activities are relevant within the scope of our operations. In particular we are looking at potential ‘Scope 3’ activities, as defined by the Protocol, such as additional transportation services and ground handing activities. While we outsource major activities such as aircraft catering and maintenance services, we will work with these organisations to ensure environmental best practice.

Our carbon footprint

Technology and operations

Initiatives such as weight reduction on aircraft, implementing optimal fuel uplift, stringent engine washing schedules, comprehensive maintenance programs and making full use of the operational ability of our aircraft all contribute to ensuring fuel efficient flights.

At Etihad: Using LIDO, our improved flight management •

system, an estimated 18,000 tonnes of fuel are saved annually, equating to a reduction of 56,000 tonnes of carbon dioxide. These savings are achieved as a result of shortened routes and improved flight fuel calculations.

The ‘Permagard’ coating on all our aircraft reduces • drag and has also led to wash water savings in the region of 10 million litres per year as a result of less frequent aircraft wash requirements.

Nitrous Oxide NOx

NOx is a local air pollutant and one of the gases emitted by aircraft engines. Etihad tracks the NOx emissions associated with the landing and take-off (LTO) cycles which cover emissions below 3,000 feet. This can be done with a high degree of accuracy using industry data provided by ICAO for each engine type. Whilst our total NOx emissions have increased in line with airline growth, we have achieved a significant reduction in emissions per LTO cycle. As we have introduced new aircraft into our fleet with latest technology engines, we have seen a 41 per cent reduction in NOx per LTO on average across our fleet since 2007.

Regulatory compliance - the European Union Emissions Trading Scheme (EUETS)

Etihad has taken steps to ensure its compliance with the requirements of the EU emissions trading scheme, which requires the monitoring and verification of emissions and traffic data for all our flights into and out of Europe. The scheme also required Etihad to submit third party verified emissions and tonne kilometre reports for 2010 to the UK Environment Agency by the end of March 2011.

The Protocol covers three types of emissions, defined as Scope 1, Scope 2 and Scope 3.

Scope 1 – Direct emissions from burning fossil fuel, such as jet fuel, gasoline and diesel.

Scope 2 – Indirect emissions such as those associated with electricity and chilled water production.

Scope 3 – Emissions from other sources, including outsourced transportation services, aircraft maintenance, catering services and services provided by third parties.

Tonnes NOx (<3,000ft) kg NOx/LTO

*Passenger aircraft only


The company’s ground-based energy consumption initiatives are focused on raising staff awareness and encouraging energy saving initiatives throughout its facilities. Green Office Champions are staff volunteers who help to support and educate staff in best practices such as recycling, switching off office equipment and lighting when not needed, and using office resources wisely.

Electricity consumption is measured and tracked at both headquarters (inclusive of the Etihad Training Academy) and the offices at Etihad Plaza. We use CO2 conversion factors to track emissions associated with electricity use.The total electricity consumption at Etihad Complex for the year was 1.4 GWh, with a peak in July.

Most of the building’s energy use is from the fan coil units and air handling units associated with the air-conditioning and ventilation systems, and to a lesser extent, the lighting system. The extensive IT and supporting electrical equipment in the office areas and the simulators at the Training Academy are also major contributors to energy consumption. The high summer temperatures result in significantly higher cooling water requirements with almost 50 per cent more energy being consumed in the hottest month compared to the coldest month.

The district cooling system is an energy intensive process resulting in one of the highest energy requirements for our ground facilities in Abu Dhabi.

On the ground

Noise management

Whilst emissions concerns are high on our environmental agenda, noise affects many communities that live close to airports. The International Civil Aviation Organisation (ICAO) developed a ‘balanced approach’ to control noise for the industry that focuses on four key aspects of noise management namely, reducing the noise at source; controlling land use around airports to prevent noise sensitive development; enforcing noise reducing operational procedures for aircraft; and implementing operational restrictions, such as banning noisier aircraft.In terms of operational control, our young aircraft are all in compliance with the ICAO Chapter 4 Noise Standards - the highest noise standard currently imposed by ICAO on new engines types.

Waste management

Internally, Etihad has implemented best practices to reduce the amount of waste material sent to landfill with a program in the head office complex to segregate plastics, aluminium, paper and cardboard from the general waste streams for recycling. The ground-based recycling program will be extended to more Etihad facilities in 2011.

Working with Abu Dhabi Airports Company (ADAC) and other airport partners, we are developing a series

of tangible waste management initiatives for our airport ground operations and in-flight services.

A total of 731,850 kilograms of waste was collected during 2010. Of this, 2.2 per cent was recycled. In a typical commercial office, paper waste would represent 50 per cent of all waste generated. Our aim during 2011 is to significantly increase the amount of recyclable material segregated for recycling to at least 10 per cent of our total waste.

Etihad co-chairs the waste management taskforce set up by the Abu Dhabi Sustainability Group to improve communication of waste management initiatives in Abu Dhabi, driving best practice and the more effective implementation of waste reduction practices across the Emirate.

Water consumption

Water is a scare resource in the Gulf region, and the widely used desalination method for the production of drinkable water is a highly energy intensive process.

In 2010 the Abu Dhabi Environment Agency (EAD) initiated an Emirate-wide program of fitting water-saving devices to water taps in all domestic and commercial premises. Etihad was one of the first Abu Dhabi companies to support this initiative by instigating the early

implementation of water saving devices in Etihad offices and residential premises. Over 14,000 devices were installed between July and September 2010.

The existing water consumption monitoring programs in key Etihad offices allow for the gathering of quantitative data on water savings in order to monitor the effectiveness of the program.

We are able to calculate the carbon emissions associated with the production of potable water using conversion factors from the water providers.

Immediately following the installation of the tap devices in mid 2010, water usage dropped significantly. This may also have been due to heightened staff awareness following the water saving campaign.

We will continue to promote staff water use awareness and will be looking to reduce water consumption further during 2011.

Education and communication

Several ground-based initiatives were implemented towards the end of 2009 and were supported by regular education and awareness campaigns during 2010, including:

Recycling of paper, aluminium cans, plastic bottles and • printer cartridges throughout the Etihad Complex;

Plastic

Cans

Card board

Paper

General waste

Etihad Complex: 2010 General waste production and recycling

Recovery cost28 AED90 kg

112.25 AED240 kg

1,303 AED3,425 kg

3,620 AED13,425 kg

731,850 kg

70,000

60,000

50,000

40,000

30,000

20,000

10,000

Etihad Plaza (office only): 2010 Electricity consumption

Apr May Jun Jul Aug Sep Oct Nov DecJan Feb Mar

600,000

500,000

400,000

300,000

200,000

100,000

Etihad Complex: 2010 District cooling consumption


500,000

450,000

400,000

350,000

250,000

200,000

150,000

100,000

50,000

Etihad Plaza office/residential: 2010 District cooling consumption


160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

Etihad Complex: 2010 Electricity consumption


Quantitative reduction targets for 2011 compared to 2010

5 per cent reduction in potable water consumption • at Etihad Complex

5 per cent reduction in energy consumption at Etihad • Complex and the Etihad Plaza offices

10 per cent reduction in the volume of waste to • landfill from Etihad Complex

10 per cent improvement in waste segregation • and recycling in Etihad Complex

10 per cent reduction in copy paper use in Etihad • Complex and Etihad Plaza offices

450

400

350

300

250

200

150

100

50

Etihad Plaza Office: 2010 Water consumption

Apr May Jun Jul Aug Sep Oct Nov DecMarFebJan

* Installed the water fittings in August 2010

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Etihad Complex: 2010 Water consumption

Apr May Jun Jul Aug Sep Oct Nov Dec

* Installed the water fittings in July 2010

MarFebJan

Total KWh Carbon emission kg Total cooling tonne/hour Carbon emission kg

Total KWh Carbon emission kg Total cooling tonne/hour Carbon emission kg

Total cubic metresCarbon emission kg

Total cubic metresCarbon emission kg

12,000

10,000

8,000

6,000

4,000

2,000

800

700

600

500

400

300

200

100


Internal communications, including a new environment • site on the staff intranet; office signage; regular features in Etihad Today, our monthly staff newsletter, and the launch of the Green Office Champions staff volunteer program;

Replacement of disposable polystyrene cups with • recyclable paper cups, and a reduction in the size of the annual order;

Replacement of paper bags with bio-degradable plastic • bags in Etihad shops;

A Paperless Office Day, which resulted in a saving of • more than 1,000 sheets of paper;

Masdar City visit with Green Office Champions as part • of a staff awareness campaign; and

Support for the Emirates Environment Group beach • cleanup campaign. Abu Dhabi Environment Heath and Safety Management System

Led by the Etihad safety and quality department, action is underway to ensure compliance with the new legislation in Abu Dhabi for the development and implementation of an environmental health and safety management system for Etihad operations and facilities. All documents were submitted by the end of December 2010 deadline.

Working in partnership

Working closely with business partners, the aviation industry, governments, community groups and other local and international stakeholders is essential for effecting positive and sustainable change in environmental practices.

In the global arena, Etihad is represented on the Environmental Committee of lATA and the Environmental Policy Group of the Arab Air Carriers Organisation (AACO). We also work closely with industry associations and other airlines to help influence and shape future regulatory measures to ensure they are appropriate, fair and consistently applied.

Etihad is also a member of the Abu Dhabi Sustainability Group and the UAE General Civil Avaiation Authority Aviation Environmental Working Group.

Our ongoing partnership with Masdar includes a service agreement, signed with the Masdar carbon management unit, for the purchase of carbon credits for a future voluntary offset program.

In January 2010, Etihad committed to becoming a founding partner of the Masdar Institute-hosted and led Sustainable Bioenergy Research Consortium and is also a member of the Sustainable Aviation Fuel Users Group (SAFUG).

Biofuels

Etihad acknowledges that alternatives to traditional fossil based fuels are fundamental to the sustainable future of aviation. With this in mind, Etihad is demonstrating its support directly through an Abu Dhabi based initiative and by virtue of its commitment to a comprehensive set of sustainability principles for alternative fuels.

The Sustainable Bioenergy Research ConsortiumAlongside Boeing and Honeywell subsidiary UOP, Etihad is a founding member of the Masdar Institute Sustainable Bioenergy Research Consortium, a dedicated resource investigating the viability of sustainable biofuels in Abu Dhabi and the potential for wider application and commercialisation.

The consortium is working on an integrated seawater agriculture system, which will use the arid saltwater landscape around Abu Dhabi’s coastline to develop not just aviation fuels but other forms of biofuel and aquaculture products without the need for freshwater. An early sustainability assessment has provided positive indications that this system is feasible and commercially viable on a large scale. The next stage is a pilot study.

Research and development of sustainable biofuels is a priority for Etihad. Not only would biofuels be commercially beneficial as an alternative fuel supply, but the future regulatory landscape for aviation is likely to favour their use.

Sustainable Aviation Fuel Users Group (SAFUG)SAFUG is an airline-led industry working group established in 2008 to accelerate the commercialisation and availability of sustainable biofuels.

Members are bound by stringent criteria in the development of non-fossil biofuels. The development of plant sources must be undertaken in a manner that is non-competitive with food, minimises biodiversity impacts, and does not jeopardise drinking water supplies. Furthermore, the total lifecycle greenhouse gas emissions from plant growth, harvesting, processing and end-use should be significantly less than those from fossil sources.

In developing economies, projects should include provisions or outcomes that improve socio-economic conditions for small-scale farmers and their families and that do not necessitate the involuntary displacement of local populations. High conservation value areas and native eco-systems should not be cleared and converted for jet fuel plant source development.

Each SAFUG member has pledged to work through the Roundtable for Sustainable Biofuels (RSB), a global multi-stakeholder initiative consisting of leading environmental organisations, financiers, biofuel developers, petroleum companies, NGOs, research entities and governments.


“Etihad is a founding member of the Masdar Institute Sustainable Bioenergy Research Consortium, a dedicated resource investigating the viability of sustainable biofuels in Abu Dhabi and the potential for wider application and commercialisation.”


Growing Together is a collection of initiatives to support the growth and development of Abu Dhabi and its citizens. It demonstrates our ongoing commitment to work as a catalyst for trade and tourism in Abu Dhabi, and support national and regional development initiatives.

Economic contribution

Etihad plays a fundamental role in driving the economic diversification and growth envisaged in the Abu Dhabi 2030 Plan.

A study by UK think tank Oxford Economics was commissioned to quantify the overall economic contribution of Etihad Airways to the Emirate of Abu Dhabi now and in the future. The study, which is refreshed annually, uses data from Etihad and the Abu Dhabi government and incorporates the results of a survey of 210 companies in Abu Dhabi, as well as in depth case study interviews with a number of key business leaders.

Detailed examination of the economic contribution framework shows the airline is playing an increasingly important role in many diverse areas of local economic endeavour, including trade, tourism, location investment, labour supply and productivity.

According to the 2011 study, overall, the airline contributed USD 6.1 billion (9.1 per cent) of Abu Dhabi’s non-oil GDP (3.7 per cent of total GDP) in 2010, and helped generate and support a total of 97,472 non-oil jobs throughout the Emirate, employing 6,631 people directly.

Etihad made a further ‘indirect’ economic contribution of

USD 763 million and supported an additional 14,235 jobs in 2010, when taking into account the money spent by the airline through commercial interactions with a wide range of Abu Dhabi businesses, including fuel purchases, maintenance and repairs, airport rental and landing fees, marketing and advertising, IT and communications.

A further ‘induced’ GDP contribution of USD 661 million and 12,339 additional jobs can be attributed to money spent during 2010 by people working for Etihad Airways and its suppliers.

Travel and tourism

Hala Abu DhabiPart of Etihad Holidays, Hala Abu Dhabi, was launched in March 2010 as Etihad’s destination management company. It provides business and leisure visitors to Abu Dhabi and the UAE with a wide range of unrivalled products, services and activities.

essential abu dhabiEtihad Airways designated 2011 as “the year of Abu Dhabi” and launched its “essential abu dhabi” destination marketing campaign to enhance Abu Dhabi’s standing as a top tourist and MICE destination through a range of promotional activities across its network.

A campaign with community stakeholders, the campaign draws together all major tourism operators in the Emirate of Abu Dhabi for the first time to showcase the best the capital has to offer.

“The progress the company has achieved since its launch and the projected growth constitute an effective contribution to the growth and boom being witnessed by the UAE. Such contribution will also boost the tourism sector in the country.” HH Shaikh Khalifa bin Zayed Al Nahyan President of the UAE

The impact of Etihad Airways economic contribution to Abu Dhabi

Catalytic Effects(impacts on otherindustries)

Trade

Tourism

Local/Investment

Labour supply

Productivity

Airport and services • Fuel on site• Aircraft Maintenance• Air traffic control • Retail and catering

Induced(spending of direct and indirect employees)

• Food and Beverage

• Recreation

• Clothing

• Household goods etc.

Direct(within Etihad)

Airline

Passenger services

Air cargo services

Airport services

Maintenance

Hotels

Travel network

Suppliers• Offsite fuel suppliers• Manufacturing• Computers/electronics• Retail goods

Business services• Call centres• Accountancy• Travel agents

Indirect(suppliers to Etihad)



PROGRAMS Graduated2011 Participants

Existing New

Cadet pilot 60 80 100

Graduate management development 31 30 50

Technical engineering 9 37 50

Contact centre - 80 80

VEDC - 7 40

Emirati development career n/a 30 -

Program support and overheads n/a 15 8

Total 100 249 328

Etihad plays a crucial role in bringing visitors to Abu Dhabi, and essential abu dhabi will give extra momentum to its efforts to promote the capital as one of the world’s best destinations.

essential abu dhabi is being promoted in all of our overseas destinations, as well as online and in-flight.

A new Etihad Airbus A330 aircraft painted in a striking “Visit Abu Dhabi in 2011” livery is carrying the message to many destinations around the world.

The campaign is supported by the Abu Dhabi Tourism Authority as a major partner, demonstrating the commitment of the entire local tourism industry to work effectively together.

Sougha – embracing our heritageA unique collaboration with Sougha, a Khalifa Fund initiative, is working with women in the western region to preserve traditional crafts in a range of modern products that are included in the duty free selection on board Etihad flights.

This project supports the economic inclusion and development of an otherwise marginalised rural community, the enhancement and creation of employment opportunities for women, and the Emirate’s overall goal of economic diversification.

Emiratisation

One of our primary contributions to the local economy is through our Emiratisation program. Since its commencement, Etihad has been invested a significant amount in the three main streams of the Emiratisation endeavour; the cadet pilot program, the graduate management development program, and the trainee engineering apprenticeship scheme. A total of 100 Emirati nationals have graduated from the programs so far. (See also Working Together)

Sponsorship

Etihad sponsorship covers arts, community, cultural and sporting activities which promote and enhance its brand and profile locally and in key markets across the network. We also engage in strategic regional and national sponsorships which allow for grassroots activities that engage the local community.

Sport in the communityWe work with our sports partners to develop Emirati and international sporting talent and support grass roots sport in the UAE.

The inaugural Etihad Airways Manchester City FC Soccer Schools took place in April 2010 following the highly successful Harlequins Rugby Schools and Chelsea FC Soccer Schools held previously. Players and coaches from the club flew to Abu Dhabi and Al Ain to train more than 400 young sportsmen in the Emirate and to help develop youth football in the region.

Etihad picked up top honours at the Arabian Sponsorship Awards 2010 for its partnership with English Premier League team Manchester City Football Club, winning the ‘International Sponsorship’ category. Etihad was credited for its activation of the partnership in areas that included competitions and promotions in the local market as well as the highly popular Etihad Airways Manchester City FC Soccer Schools during the winter months.

Etihad conducted a tour of local schools and malls in the UAE with a giant replica of the Manchester City FC shirt that gained over 5,000 signatures and messages of good luck for the club ahead of the 2010/2011 English Premier League season.

Etihad was also closely involved with the “Our Country versus Our City” match, which saw many of the Manchester City FC star players take on the UAE national team in an exhibition match.

16%

12%

8%

4%

0%

Emirati percentage of workforce (excluding flight crew)

2009 2010


“We are proud to support programs that promote the richness and diversity of modern Arabic cultural life.”


Etihad has invested significantly in the Emiratisation program, which is now in its fourth year, a fact endorsed by the growing number of applicants and the positive market perception of Etihad as an employer.

In September 2010, Etihad’s largest graduate group of 77 received certificates of achievement from the Chief Executive Officer at a ceremony in Abu Dhabi.

Al Ain contact centreAs part of our continuing efforts to focus on opportunities for Emirati women in the workforce, planning began in 2010 for the opening of a unique all-women contact centre at Al Ain. Employment and training of the Emirati staff commenced in the third quarter of 2010 to ensure that the 85 women would be fully equipped to take on their new roles. The contact centre was opened in March 2011.

Internship and mentoringEtihad offers internships to UAE nationals providing on-the-job opportunities to gain work experience while completing their studies at several tertiary educational institutions in the UAE.

Vocational educationIn 2010 Etihad employed the first team of students from the Vocational Educational Development Centre (VEDC). Having gained work experience at Abu Dhabi Airport during the previous year, the 2009 class of 11 students graduated and joined Etihad as permanent employees of the airport services team.

Our people

Since 2005, the number of Etihad employees has grown fourfold, with the greatest increase occurring in the period from 2007 to 2008.

Finding and attracting talent locally and globally is imperative to the success of our organisation. High calibre candidates are sourced a range of other professional sectors depending on the nature of the role.

As of December 2010, Etihad employed 7,855 people worldwide, representing 123 different nationalities and creating a unique cultural diversity. UAE nationals currently comprise 13 per cent of the workforce (excluding cabin crew and outstations).

Emiratisation

The Board’s directive to source and develop young Emirati nationals is seen as a key management priority and Etihad is committed to providing real and meaningful employment opportunities and career paths for Emiratis.An Emiratisation policy and strategy were formally implemented in 2007 when the first programs were launched.

The core initiative comprises three schemes - the cadet pilot program, the graduate management development program and the trainee engineering apprenticeship scheme.

AS AT 31 DECEMBER 2009 2010

Total staff 7,828 7,855

Head office staff - headquarters 6,605 6,631

Outstation staff 1,223 1,224

Flight attendants 3,031 2,783

Flight deck crew 829 982

Number of Emiratis 316 484

2010 PROGRAM Places Applicants

Graduate management program 15 430

Cadet pilot program 24 449

Engineering 24 225

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2007 2008 2009 2010

Employee growth

20062005

Number of employees


We are committed to achieving full sustainable employment and development of the national workforce.


Productive partnershipsEtihad has an agreement with Zayed University in Abu Dhabi to develop and train Emiratis who want to pursue a career in the airline industry, and works closely with Abu Dhabi University, UAE University, Higher Colleges of Technology, IAT, ILM, the British Council and the Horizon Flight Academy.

We also partner with local institutions such as the Abu Dhabi Tawteen Council, the Abu Dhabi Education Council and the Institute of Applied Technology to broaden and enrich the scope of our Emiratisation program.

in 2010, Etihad’s Emiratisation team participated in the ‘Quadurat’ research project conducted by Hewitt Associates and Stanford University to improve their understanding of the strengths, capabilities and aspirations of Arab nationals across the region. The survey was open to all Emirati employees during August and September 2010. A total of 80 staff responded and the report has been published.

Training and development

Given the regulated nature of the aviation industry, a high level of technical competency is essential to business operations, delivery and safety. To meet this requirement, Etihad opened its own state-of-the-art training academy in 2008 to offer a positive learning environment and provide classroom-based and technical training.

With the introduction of e-learning in 2010, the training academy has been able to increase its productivity. E-learning now comprises 67 per cent of the total training.

Training on cultural diversity and Islamic culture is embedded in many of the academy’s training programs, including management development, group dynamics, performance feedback communication and coaching.

Induction programA new, mandatory induction program called ‘Marhaba’ was introduced in September 2010. The program provides all the tools, information and support new joiners need as they take up their roles in Etihad. Marhaba includes a cultural awareness seminar to help employees integrate into life in the UAE. There is also a ‘buddy’ system, which teams existing employees with new joiners to ensure they are assisted in every way possible in the first stage of their journey as an Etihad employee.

Succession planningA formal methodology for identifying and managing talent, called Talent Watch, was introduced in the first quarter of 2010 with the aim of recognising and developing internal talent; identifying critical roles in the organisation and creating succession plans for those roles.

This process uses the nine-box model first used by General Electric, which assesses people on two matrices – performance and potential. In 2010, senior and mid-level managers were evaluated by the Talent Board, which met six times during the year. A number of key talent placements were made as a result.

Remuneration

Etihad offers employees a wide array of financial and non-monetary benefits including a home ownership scheme; living and education allowances; supplementary flight tickets for friends and family, and annual leave tickets for employees and their immediate family members anywhere on the Etihad network.

iachieve and pay for performance

Etihad believes that rewarding organisational and individual performance is crucial in retaining high performing staff, and in ensuring that remuneration is competitive regionally and internationally.

Continuously benchmarked against and informed by market and industry trends, the Etihad reward approach has evolved from annual cost of living increments to one that links and differentiates pay based on performance.

In 2010, 100 per cent (7,119) of all eligible staff underwent the annual performance appraisal and rating on which the approved range of salary adjustments was based.

A holistic approach to employee wellbeing

Our main staff accommodation complex, Etihad Plaza, offers a community-based environment with access to grocery shopping, a pharmacy, a medical centre, a spa, banking and money exchange services and restaurants.

Etihad Medical CentreOpened in May 2010, Etihad’s state-of-the-art medical centre is accredited by the GCAA and the Health Authority of Abu Dhabi. It offers a broad range of medical services free of charge to employees, with plans in place to extend these services to their families. An average of 500 people visit the clinic, which is located in Etihad Plaza, each week.

Fit-2-FlyAll Etihad employees and their families have free access to the airline’s Fit-2-Fly gyms and swimming pools in five locations in and around Abu Dhabi. Personal trainers are on hand to guide and support employees with individual nutrition and fitness programs. The facilities record an average of 9,000 visits per month.

Staff conference

Etihad held its Worldwide Staff Conference at the Yas Marina Circuit in January 2011. The two-day conference, attended by over 500 staff from around the world, was addressed by the Chief Executive Officer and Etihad’s senior management team. The Chairman of the airline’s Executive Committee, His Excellency Mubarak Al Muhairi, also made a special address to Etihad staff to thank them for believing in Abu Dhabi and its vision for the future, pointing out that the growth and future success of both Etihad and Abu Dhabi is interwoven.

The CEO and senior executives also update all staff on developments across the business at bi-annual staff roadshows.

Health and safety

Safety lies at the heart of our business and is a core value across the company. The statement of commitment, policy and procedures, reinforced by practice and training, demonstrates management’s commitment to safety.

Environment, health and safety legislation2010 we engaged with authorities in Abu Dhabi to ensure compliance with new environment, health and safety legislation. Internal resources have been put in place to implement the system by the end of 2011.

Safety management system (SMS)The implementation of a Safety Management System was a major project for the safety and quality team and will allow Etihad to manage safety proactively. The SMS is a comprehensive system designed to manage health, safety and general risks, providing a systematic way of identifying hazards to control and reduce risks to acceptable levels. It enables goal setting, planning and measuring performance, communication with staff, training, safety assurance and safety culture and reporting.

The organisation of the safety action group, accountable for follow up and corrective action, was also improved during the implementation of the SMS, and training in safety management was conducted for the management team. Online courses, available on the intranet, have facilitated a smooth implementation process.

First Etihad safety manualIn 2010 we published the first safety manual. Structured as a cross-departmental manual, it supports the requirement for a company-wide SMS and helps to embed safety in Etihad’s working procedures and processes.

Quality and safety training Key to establishing consistency will be the continuing design and implementation of standards, documented processes and procedures, enforced through ongoing training. Safety and quality support operational departments in their training requirements. An audit system allows measuring and qualifying needs of the organisation to maintain regulatory compliance.

IOSA renewal 2010 with zero findingsAll IATA member airlines are required to pass the IOSA (IATA Operational Safety Audit) audit, which is conducted every two years by an externally accredited audit organisation. During 2009 and 2010, Etihad’s operations quality team worked on the implementation of new IOSA standards. In 2010 Etihad passed a major UAE GCAA audit and the IOSA 2010 renewal, the latter being the most recognised operational safety accreditation in the airline industry. The program is comprehensive, consisting of 966 standards subdivided into eight operational areas. Passing this with zero findings is a significant achievement demonstrating the very highest levels of safety.

Academy resources Number

Classrooms 32

Computer-based training rooms 6

Auditorium 1

Flight simulators 4

Cabin emergency evacuation 1

Real fire fighting trainer 1

Door trainers (Boeing and Airbus) 4

Pool for emergency training 1

AS AT 30 DECEMBER 2005 2006

Total number of courses offered by Etihad

1,107 1,320

Number of training hours 23,833 27,672


Etihad also sponsored volunteers from the Pakistan Flood Relief Dubai (PFRD) agency to visit the north-western regions of Pakistan, where they distributed donated food, clothing, and household items to families that were left destitute by the floods.

In the last quarter of 2010, we took part in HRH The Prince of Wales’ ‘Seeing is Believing’ program, which, following damage and need assessment, is to fund and implement a long-term and holistic reconstruction in the country.

Queensland flood disasterIn response to the devastating flood that engulfed a vast area of Queensland, Australia, and affected at least 200,000 people, companies in Australia and around the world rallied to provide support to the government and affected communities.

With the strong endorsement of our Board, and in addition to initiatives by the UAE government, Etihad pledged AUD 1 million in aid to the Queensland government in recognition of the close ties between Australia and the UAE.

Care by Air Etihad is a founding signatory and member of Care by Air, a humanitarian and relief aid initiative from Abu Dhabi together with Maximus Air Cargo and Abu Dhabi Airport Services. Care by Air provides cargo space at cost price to deliver relief aid to disaster stricken areas around the world.

Airlink Etihad is a registered member of the International Society of Transport Aircraft Trading (ISTAT) Airlink, which provides and promotes a free web-based portal aimed at addressing developmental and emergency humanitarian air transportation needs. The system connects charities and non-government organisations with airlines that can provide passenger or cargo transportation for free or at reduced cost to meet humanitarian and emergency relief aid requirements.

Corporate and individual philanthropy is an important part of Etihad’s CSR strategy. We enjoy a high degree of recognition among our diverse stakeholders in the UAE and the communities in which we operate. This brings with it a corresponding expectation and responsibility of involvement in these communities through philanthropic and charitable projects and activities that enhance the social and economic wellbeing of the people.

We manage our philanthropic giving and community involvement ethically and transparently to meet our corporate governance criteria and the expectations of our stakeholders.

Crisis and humanitarian aid

Etihad staff responded with compassion and energy to several successive natural disasters in 2010, donating money and crisis aid items for distribution to communities in Haiti, Chile, Pakistan and Australia.

HaitiIn January 2010 Etihad Crystal Cargo operated a special Red Crescent and Khalifa Welfare Foundation charter flight to Haiti carrying more than 80 tonnes of medical and humanitarian supplies, while staff donated money and relief items which were sent to Médecins Sans Frontières and SOS Children’s Villages.

PakistanDue to the proximity and scale of the flood disaster in Pakistan, the country’s close ties with the UAE and its importance on our network, we undertook several humanitarian initiatives to assist the affected communities across the country.

Etihad staff and our brand ambassadors in Pakistan, the pop-rock band Strings, visited the Sajawal relief camp and also worked with the Emirates International Mobile Humanitarian Hospital for Children (EIMHH) to distribute more than 1,000 Eid gift packs to displaced children living in the Razzakabad relief camp in Karachi.

In August 2010, we launched our new A330 freighter aircraft carrying 59 tonnes of aid to assist the humanitarian effort in Pakistan and also carried medical supplies from Italy to Pakistan for the EIMHH.


Etihad operates in a unique multicultural environment. Promoting cultural exchange and connecting people and places is part of our business as an airline, and an obvious area of focus in our CSR program.


Community engagement

One of our key areas of focus is human empowerment and development. In the workplace this manifests in our Emiratisation program and a range of training and career development programs for all staff. Externally, we work in a variety of communities and with accredited programs to deliver opportunities, education and vocational training that have the potential to drive employment and enhance the quality of life in the community. [See also Working Together.]

Mosaic Founded by His Royal Highness the Prince of Wales, Mosaic has two key priorities - to create opportunities for young people of all backgrounds, and to promote cultural understanding between different people and groups.Etihad has a longstanding relationship with Mosaic, and over the last three years has sponsored numerous initiatives, including the Mosaic International Summer School and the Mosaic International Awards.

As the official airline for the Mosaic International Summit, Etihad flies delegates from across the Muslim world to attend the program which, in addition to providing opportunities for delegates to develop leadership skills, offers a multicultural perspective of key global issues and works with students to address these in positive and creative ways.

Three Etihad employees participated in the Mosaic International Summit in 2010. The delegates, members of Etihad’s Emiratisation program, were Aisha Al Ameer, Shaeb Alnajjar and Najla Al Nahdi.

In November 2010, Etihad continued to celebrate the work of young Muslims through its sponsorship of the Mosaic Talent Awards 2010 in London. The International Award recognises a young Muslim individual or group which delivers significant social benefit to their community.

The winner of the International Award for 2010 was Korvi Rakshand Dhrubo, a 25 year old Bangladeshi who was credited by Mosaic for dedicating his life to breaking the cycle of poverty through education in the Dhaka slums.

Summit delegates flew with Etihad from Bahrain, Bangladesh, Indonesia, Malaysia, Oman, Pakistan, Qatar, Saudi Arabia and the UAE to spend two weeks hearing from expert and inspirational speakers, taking part in discussions and debates, and finally, planning how they will put their learning into effect on their return home.

OffscreenOffscreen is an award-winning social enterprise promoting cross-cultural understanding among young people. This not-for-profit initiative specialises in building creative bridges and improving relations and perceptions across economic and geographical borders, especially between the UK, Middle East and the wider Islamic World.

It covers all forms of artistic expression and endeavour, such as photography, film, fine art and fashion design, and empowers young people to inspire their peers through the creative communication and expression of other cultures, ultimately building an educational legacy that is used in various forums, including schools and public venues such as museums.

Etihad was the official airline for two 2010 Offscreen expeditions that took place in the UK and Pakistan.

Child Welfare SchemeThe Child Welfare Scheme (CWS) is a British charity dedicated to improving the lives of vulnerable children and their families in Nepal. CWS targets the most remote or marginalised children with health, education and protection initiatives. CWS reached in excess of 200,000 people in 2010.

Etihad Airways supported CWS, providing flights and saving the organisation thousands of dollars in airfares. These savings helped CWS to support emergency transport schemes that include cycle ambulances in the Terai region of Nepal. The ambulances help women from remote rural areas to reach hospital safely and ensure they give birth with medical support.

Associations

Abu Dhabi Sustainability GroupThe Abu Dhabi Sustainability Group (ADSG) aims to promote sustainability management in Abu Dhabi by providing learning and knowledge sharing opportunities for government, private companies and not for profit organisations.

All members are required to sign the ADSG Declaration, committing to adopt best practices of sustainability management and reporting and to actively participate in ADSG activities, which focus on achieving economic, environmental and social sustainability, and strengthening inter-cultural dialogue around global and local sustainability trends.

In addition to participation in the quarterly group meetings, Etihad chairs the waste management taskforce and participates in the supply chain and sustainable labour practices taskforce groups.

Business in the Community In 2010 Etihad signed up to become a member of Business in the Community (BITC), one of the Prince of Wales’ charities. This business-led charity boasts 850 member organisations that work together to define and implement best practice in the workplace while creating a sustainable future for people and the planet and improving business performance.

We work with BITC to implement our sustainability strategy and in finding new ways to play a meaningful and responsible role in the workplace, marketplace, environment and the community.

Looking ahead

While we will continue to sponsor initiatives that empower and develop young and disaffected people in Abu Dhabi and across our network, and provide support for ad hoc philanthropic activities, we will look to select a single philanthropic project that will draw together the efforts of our staff and customers in the provision of financial and other meaningful support.

Other objectives for 2011 include the implementation of a staff volunteer program that will build on the present work of the IFS volunteer group to facilitate and assist voluntary participation in projects with NGOs across our network.


Corporate governance

Government of Abu Dhabi

Board of Directors

Executive Committee of the Board

Management

COMMERCIAL MANDATE

Articles of Association

Manual of Authority

Contracts Manual

Tender Board

Audit Committee

External Audit

Internal Audit

Abu Dhabi Audit Authority

Name of Meetings Objective Frequency Attendees

Board Meetings The board meets the management of the company to ensure that shareholder mandates are effectively implemented. The Board receives its authority from the shareholder and effectively delegates that to the management via the manual of authorities.

Quarterly Board members, CEO, CFO and Chief Officers as required

Executive Committee Meetings

The Executive Committee meets management to discuss and authorise the carrying out of any activity deemed necessary to enable the company to achieve its commercial objectives and operational activities, and to review risks and formulate actions to address such potential risks.

Monthly A subcommittee of Board members, CEO , CFO and Chief Officers as required

Audit Committee To provide assurance to the Board over the quali-fication, independence, and performance of the registered public accounting firm (external auditor), and to seek advice from the company’s internal audit function as to the adherence to relevant governance standards.

At least 5 times a year

Two members of the Board – CEO and CFO

Two independent members including representatives of Abu Dhabi Accountability Authority

Audit Committee Secretary (VP IA)

Chiefs Meetings The Chief Officers of the company meet to discuss and review performance to ensure the company achieves its commercial objectives. At this meeting the CEO updates his direct reports on issues affect-ing the company and feedback of Board, Executive Committee and other meetings. The Chief Officers update the CEO on issues and focus areas relating to their divisions.

Monthly CEO, Chief Officers

Performance Review Prioritisation Meeting

These meetings focus on the performance of the company including planned initiatives and continu-ous improvement. Included in this review is the BSC/ PMO/CAPEX

VMC (Value Management Committee)

Quarterly or as required

CEO, Chief Officers, PMO

Cross functional VPs, FP

Divisional Business Review Meetings (BRM)

The CEO meets with the management teams on a monthly basis to ensure the organisation’s perfor-mance is aligned to strategic objectives and a healthy operational environment exists. This is done through updating the CEO and other members of the BRM on initiatives, projects, risks and critical performance indicators and focus areas of the division

Monthly CEO, Chief Officers, VPs, Departments Heads and Divisional Financial Con-trollers

Divisional Organisa-tional Review Meetings (ORM)

Divisional Organisational Review Meetings (ORM) are held to review the divisional organisation struc-ture and identify resource needs, gaps, efficiency measures, career plans and succession planning

Twice Quarterly

CEO, Chief Officers, CPPO and HR Business Partners

Etihad Airways operates under a rigorous organisational structure, established in 2007 in line with the revised Manual of Authority, which outlines authority limits delegated by the Board to the Executive Committee, management and staff in order to run the company’s affairs and operations.

The organisational structure ensures transparent reporting and sufficient checks and balances. A 2009 report by leading global management consulting firm Oliver Wyman, for the Abu Dhabi Audit Authority, concluded that Etihad had “established strong corporate governance and process redesign”.

Various layers of shareholder, management and regulatory oversight ensure continuous performance review against corporate strategic objectives and external standards.

Shareholder Management Regulatory

Board Meeting – QuarterlyExecutive Committee – MonthlyAudit Committee – Quarterly

Manual of AuthorityTender Board MeetingsInternal Audits

External Audit – KPMG AnnualFinancial Review – KPMG QuarterlyGovernment Audit – ADAA PeriodicOperations Audit – GCAA AnnualSafety Audit – IOSA Biennial

In addition to the various layers of shareholder, management and regulatory oversight, Etihad employs a centralised project management office (PMO) and value management committee (VMC), and operates an ethical and objective process for the procurement of goods and services, managed by a tender board.

Etihad’s governance framework is as follows:

Etihad’s management reporting framework is as follows:


Global Reporting Initiative cross reference and indexEtihad is fully committed to using the Global Reporting Initiative (GRI) and the application of GRI inidicators in developing its CSR report. We have reported on material environmental and social indicators, either fully or partially this year and will look to improve on this as we widen the scope of our reporting in future years.

Page Yes Section

A. Formal CSR reporting

Publication of CSR policy ü Sustainability vision

Formal annual reporting of CSR performance ü

Other

1. Strategy

1.1 Senior management statement of vision for CSR / sustainability 5 ü From the Chief Executive Officer

1.2 Description of key impacts, risks and opportunities

2. Organisational profile 6 ü Etihad today

3. Report parameters

3.1 Reporting period 2 ü Report parameters

3.2 Date of recent previous report Not relevant

3.3 Reporting cycle 2 ü Report parameters

3.4 Contact point for questions regarding report 2 ü Report parameters

3.5 Process for defining report content 2 ü Report parameters

3.6 Boundary of report ü

3.7 Statement of limitations on scope or boundary ü

3.8 Basis for reporting on JVs, subsidiaries, etc Not relevant

3.9 Data measurement techniques and basis of calculations x

3.10 Explanation of effect of any restatements of information from earlier reports Not relevant

3.11 Significant changes from previous reporting periods in scope, boundary, measurement etc

Not relevant

3.12 Table identifying standard disclosures x

3.13 Assurance x

4. Governance, commitment and engagement

4.1 Governance structure ü Partial Corporate Governance

4.2 Chair of highest Governance body an executive officer ü Partial Corporate Governance

4.3 # of members of Governance body who are independent X

4.4 Mechanisms for shareholders / employees to provide recommendations to Governance body

X

4.5 Linkage between compensation and organisation’s performance (inc social and environ-mental performance)

X

4.6 Process for Governance body to avoid conflicts of interest X

4.7 Process for determining qualifications of highest Governance body X

4.8 Internally developed statement of mission or values ü

4.9 Process for Governance body to identify management of performance x

4.10 Process for evaluating Governance body’s own performance x

4.11 Explanation of whether and how precautionary approach is addressed x

4.12 Externally developed charter, principles etc to which organisation adheres x

Page Yes Section

4.13 Membership in relevant associations 19, 20 ü Working in partnership

4.14 List of stakeholder groups engaged by organisation 11 ü Partial Stakeholders

4.15 Basis for identification and selection of stakeholders 11 ü Partial Stakeholders

4.16 Approaches to stakeholder engagement 11, 13 ü Partial Stakeholders; Together

4.17 Key topics and concerns raised through stakeholder engagement 11 ü Partial Stakeholders

Other

Performance indicators: Environmental

Materials

EN1: Materials used by weight or volume x

EN2: Percentage of materials used that are recycled input materials X

EN3: Direct energy consumption by primary energy source 14, 1617

ü Measuring emissions and materi-ality; In the air

EN4: Indirect energy consumption by primary energy source 14, 1618

ü Measuring emissions and materi-ality; On the ground

EN5: Energy saved due to conservation / efficiency improvements 14, 1617, 18

ü Measuring emissions and mate-riality; In the air; On the ground; Education and communication

EN6: Initiatives to provide energy-efficient products and services 20 ü Working in Partnership; Biofuels

EN7: Initiatives to reduce indirect energy consumption x

Other:

Water

EN8: Total water withdrawal by source 19 ü Water consumption; Education and communication

Other

Biodiversity

EN11: Location and size of land owned, leased etc in or adjacent to protected areas and areas of high biodiversity value

x

EN12: Description of significant impacts of activities x

Emissions, effluents and waste

EN16: Total direct and indirect greenhouse gas emissions by weight 14, 16 ü Measuring emissions and materi-ality; Our carbon footprint;

EN17: Other relevant indirect greenhouse gas emissions by weight 14, 16 ü Measuring emissions and materi-ality; Our carbon footprint;

EN18: Actions to reduce greenhouse gas emissions and reductions achieved 14, 1617

ü Measuring emissions and materiality; Our carbon footprint; In the air; Education and com-munication

EN19: Emissions of ozone depleting substances by weight x

EN20: NO, SO and other air emissions by weight 14, 1617

ü Partial Measuring emissions and materiality; Our carbon footprint; In the air; Education and com-munication

EN21: Total water discharge by quality and destination x

EN22: Total weight of waste by type and disposal method 18, 1920

ü Waste management; Education and communication

EN23: Total number and volume of significant spills x

Products and services

EN26: Initiatives to mitigate environmental impacts of products and services, and extent of mitigation

14 to 21 ü Together Greener

EN27: Percentage of products sold and packaging materials that are reclaimed by category x

Compliance

EN28: Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations

x

Transport


Page Yes Section

EN29: Significant environmental impacts of transporting goods, materials and members of the workforce for the organisation’s operations

x

Performance indicators: Human rights

Investment and procurement practices

HR1: Percentage of significant investment agreements that include human rights clauses or have undergone human rights screening

x

HR2: Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken

x

Non-discrimination

Total number of incidents of discrimination and actions taken x

Freedom of association and collective bargaining

HR5: Operations taken in which right to exercise freedom of association and collective bargaining might be at risk, and actions taken

x

Child labour

HR6: Operations identified as having significant risk for incidents of child labour and meas-ures taken to contribute to elimination of child labour

x

Forced and compulsory labour

HR6: Operations identified as having significant risk for incidents of forced and compulsory labour and measures taken to contribute to elimination of forced and compulsory labour

x

Security practices

HR8: Percentage of security personnel trained in organisation’s policies concerning aspects of human rights that are relevant to operations

x

Performance indicators: Labour practices and decent work

Employment

LA1: Total workforce by employment type, employment contract and region 26 ü Our people

LA2: Total number and rate of employee turnover by age group, gender and region x

LA3: Benefits provided to full-time employees that are not applied to temporary or part-time employees, by major operations

26 to 29 ü Working together; Emiratisation

Labour / management relations

LA4: Percentage of employees covered by collective bargaining agreements x

LA5: Minimum notice periods regarding operational changes, inc whether specified in col-lective agreements

x

Occupational health and safety

LA7: Rates of injury, occupational diseases, lost days and absenteeism x

LA8: Education, training, prevention programme to assist workforce members and families regarding serious diseases

x

Training and education

LA10: Average hours of training per year per employee by employee category ü Partial Our people

Diversity and equal opportunity

LA13: Composition of governance bodies and breakdown of employees per category ac-cording to gender, age group, minority group membership and other indicators of diversity

x

LA14: Ratio of basic salary of men to women by employee category x

Performance indicators: Society

Community

SO1: Nature, scope and effectiveness of programmes and practices that assess and manage the impacts of operations on communities

ü Noise management

Corruption

SO2: Percentage and total number of business units analysed for risks related to corruption x

SO3: Percentage of employees trained in organisation’s anti-corruption policies and proce-dures

x

SO4: Actions taken in response to incidents of corruption x

Public policy

SO5: Public policy positions and participation in public policy development and lobbying 20, 28 ü Partial Working in partnership; Health and safety

Page Yes Section

SO6: Total value of financial and in-kind contributions to political parties, politicians and related institutions by country

x

Anti-competitive behaviour

SO7: Total number of legal actions for anti-competitive behaviour, anti-trust and monopoly practices and their outcomes

x

Compliance

SO8: Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations

x

Performance indicators: Product responsibility

Customer health and safety

PR1: Life cycle stages in which health and safety impacts of products and services are as-sessed for improvement, and percentage of significant products and services categories subject to such procedures

x

PR2: Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services

x

Product and service labelling

PR3: Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements

x

PR5: Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

x

Marketing communications

PR6: Programmes for adherence to laws, standards and voluntary codes relations to market-ing communications, including advertising, promotion and sponsorship

x

Customer privacy

PR8: Total number of substantial complaints regarding breaches of customer privacy and losses of customer data

x

Compliance

PR9: Monetary value of significant fines for noncompliance with laws and regulations concerning the provision and use of products and services

x

Performance indicators: Economic

Economic performance

EC1: Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments

22 ü Partial Economic contribution; Giving together

EC2: Financial implications and other risks and opportunities for the organisation’s activities due to climate change

x

EC3: Coverage of the organisations defined benefit plan obligations x

EC4: Significant financial assistance received from government x

Market presence

EC5: Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation

x

EC6: Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation

x

EC7: Procedures for hiring and proportion of senior management hired from local com-munity at locations of significant operation

26 ü Emiratisation

Other

Indirect economic impacts

EC8: Development and impact of infrastructure investments and services provided prima-rily for public benefit through commercial, in-kind or pro bono engagement

22, 30 ü Economic contribution; Giving together

Performance indicators: Logistics and transportation

LT2: Breakdown of fleet composition 7 ü Our fleet

LT3: Description of policies and programmes on the management of environmental im-pacts, including sustainable transportation, modal shift and route planning

14 to 17 ü Etihad airways Environment Policy; In the air

LT4: Description of initiatives to use renewable energy sources to increase energy efficiency 20 ü Biofuels

LT7: Description of policies and programmes for noise management / abatement. 18 ü Noise management


Etihad Airways PJSCAirport Road, P O Box 35566,Abu Dhabi, United Arab EmiratesLicence No. with the Department of Economic Development - 1002105Tel +971 2 511 0000

Corporate Social Responsibility Report 2010...Welcome to the first Etihad Airways Corporate Social...

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