ADNOC Corporate Sustainability Report
Executive Summary
Abu Dhabi National Oil Company (ADNOC) is one of the largest oil and gas companies in the world. ADNOC is a government-owned entity that operates in the United Arab Emirates, and it has various affiliates on different levels. The report focuses on the situation at ADNOC while giving attention to its corporate governance, particularly the social and environmental dimensions. Regarding the social dimeson, it emerged that ANDOC through its management participates in different activities that work to promote the well-being of the Emiratis. For example, the company invests in the education sector to empower talented and gifted students from this region. Currently, the management has established ADNOC schools and technical institutes that work to promote the knowledge and skills of people from the UAE. Such learning facilities follow the stringent standards of education to prepare the students who meet the requirements of the world universities. Apart from that, the technical institute provides learners with the opportunity to gain the necessary skills to allow them to work in the oil and gas industry.
Through this approach, the management of this company can continually get employees who have the needed prowess to sustainably manage ADNOC operations. Another aspect of the social dimension contained in this report is community participation which involves the construction of roads and hospitals among other activities. The report also offers information about the environmental activities that the management of this organization takes seriously. For example, the entity engages in marine activities, including the rehabilitation of coral reefs. Moreover, the management of ADNOC undertakes activities that aim to reduce the effects of climate change on the environment. All these initiatives indicate that the organization works toward the sustainability of its operations. However, to boost the efforts towards corporate sustainability, the management should consider the implementation of the recommendations provided in this report. Nonetheless, ADNOC operates on social and environmental projects that work to promote its sustainability.
Company Description
Abu Dhabi National Oil Company (ADNOC) is an entity that deals with oil and its ownership belong to the government. The operations of this company occur in the entire hydrocarbon value chain. The business process is fully integrated to facilitate smooth and efficient operations. Some of the areas of focus include the exploration of gas and oil, production and storage of these products, refinement, as well as distribution. Currently, the development of different petrochemical products forms part of the company’s services. The organization began its operations in 1971, and since then, it has brought different changes to the UAE. For example, the focus remains on the economic development of Abu Dhabi. As a result, the team produces and preserves the Emirate’s hydrocarbon to ensure that the government attains its sustainability goals. Additionally, ADNOC is among the largest oil and gas companies in the world. The measure is in terms of the reserves it holds and production capacity, which stands at about 97.8 billion barrels and 3.1 million barrels daily respectively (ADNOC, 2017a). Apart from that, ADNOC’s upstream, downstream, and midstream production stages occur in its subsidiary companies which are about 16 in number. The development of the gas fields is both onshore and offshore. ADNOC’s two oil refineries include Ruwais and Umm Al Nar. In terms of its leadership as well as corporate governance, Sultan Ahmed Al Jaber works as the current director general and CEO of this company. The team adopts new approaches that aim to increase the company’s profitability and create a culture that promotes commercial-mindedness. Finally, the management of this company takes CSR seriously with the aim of promoting the social well-being of the people and protecting the environment from any form of damage.
Situation Analysis
The management at ADNOC operates on strategies that focus on the social and environmental dimensions of corporate sustainability. The analysis only considers two dimensions of EGSEE, namely social and environmental. Following the practices at ADNOC, it is evident that it engages in activities that promote the social well-being of its employees and other stakeholders as well as undertakes practices that ensure environmental safety.
Social Dimension
Socially, investment in education and participation in community activities are among the sustainable activities in which the management at ADNOC takes part. The creation of an education and energy research ecosystem is proof that this organization remains committed to the promotion of the social welfare of people. The primary objective of this program is to harness the Emiratis' creativity and talent to promote oil and gas development in this industry. The process entails exposing these individuals to the relevant knowledge and skills they need for the sustainability of operations in this sector. Thus, the investment in education encompasses the ADNOC Technical Institute (ATI) and other ADNOC schools that are mainly available in Abu Dhabi. The foundation of ADNOC schools occurred in 2008 with the primary objective to teach talented Emirati students and expatriated learners (ADNOC, 2017b). In these schools, education follows a curriculum that is rigorous and conforms to the highest standards of academics. In this case, ADNOC wants to prepare these learners for the best universities in the world. The number of students who have enrolled at different campuses stands at 6,000 (ADNOC, 2017b). Moreover, ADNOC has its technical institute (ATI) which trains and educates UAE nationals. Such individuals require skills related to gas and oil. ATI began in 1978 as a vocational training institute with its location in Abu Dhabi. Since then, the facility has produced approximately 3,500 technicians (ADNOC, 2017b). Apart from that, ADNOC runs a Young ADIPEC Program that provides children between 14 and 17 years of age with the necessary experience concerning the energy sector (ADNOC, 2017b). The program allows these minors to gain some knowledge of oil and gas to promote their skills in this area.
Another social aspect that ADNOC considers is the promotion of their community by offering them myriad opportunities. Other than education, ADNOC employs people and participates in the development of infrastructure. For example, it invests in roads, hospitals, and mosques. The management of this company takes donations seriously, and currently, the organization donates to the Ministry of Labor and Social Affairs and Khalifa Foundation (ADNOC, 2017c). It also remits donations to Emirates Red Crescent as well as local sports and cultural clubs. Additionally, ADNOC is present in the Al Dhafra Region of Abu Dhabi. In this area, the organizational management works in tandem with Western Region Development Council in support of sustainable social development. Some of the communities that work to change their status include Ruwais and Shuweihat. The services also extend to Liwa and Madinat Zayed communities. Moreover, the organization launched the Al Khair program in 2017 with a vision to positively affect the lives of about 100,000 people (ADNOC, 2017c). Besides, the management of this entity has established 50 community initiatives that fall under the yearly giving programs. Through its Ramadan initiatives, the organization has influenced the lives of approximately 1.8 million people (ADNOC, 2017c). The employee also contributed about 8,200 voluntary hours during these events (ADNOC, 2017c). All these factors promote corporate sustainability.
Environmental Dimension
ADNOC recognizes the need to remain responsible for the environment by taking proactive measures concerning harmful activities. The management of this entity uses a strategy that enables them to identify and mitigate risks that relate to health, safety, and environment (HSE) (ADNOC, 2017d). One of the approaches to ensure that the organization reduces or eliminates these risks is the stringent HSE impact assessment. The appraisal occurs at various intervals to allow the relevant authorities to detect and avert any condition that could negatively affect the environment. ADNOC management subjects every business process in this organization to continuous environmental monitoring. The strategy has enabled the management of this organization to avoid harmful effects on the environment because the company also handles products that cause pollution. Moreover, ADNOC management remains committed to the implementation of the 100% HSE (ADNOC, 2017d). The company works as a team to ensure that the health and safety of its employees together with other stakeholders remain of high interest. Through the Group HSE policy, the employees and other responsible authorities work to identify risks and mitigate them to avoid any devasting effect that these perils can cause to people.
Furthermore, the organizational team has immensely invested in projects that relate to the environment. The primary goal of participating in this realm is the reduction of emissions concerning Green House Gas (GHG) and flaring. Another area that ADNOC focuses on is marine, where it undertakes projects regarding its protection and development (ADNOC, 2017a). For example, the staff participates in the plantation of mangroves and seagrass. The company team also undertakes the rehabilitation of coral reefs to make the marine environment retain its nature. Besides, the team deploys artificial reefs as well as structures of fish habitats. All these efforts remain concerted toward the realization of a sustainable environment.
Finally, the ADNOC team undertakes different measures to supplement the UAE’s efforts toward the management of risks related to climate change. Some of the approaches they use include participation in research and development concerning breakthrough projects together with technologies. For example, ADNOC has a joint venture with Al Riyadh, and the project involves the exploration and development of commercial-scale initiatives. It concerns dealing with the capture of carbon, its usage, and the best ways to store it. For example, the first project that Al Reyadah would undertake would utilize about 800,000 tons of carbon dioxide annually (ADNOC, 2017a). Therefore, ADVNOC engages in activities that work towards the sustainability of its environment.
Situation Interpretation and Implementation
Based on the prevailing situation at ADNOC, it is evident that the management focuses on corporate suitability. Concerning the social dimension, the move to offer education has the potential to ensure that the organization would get the best professionals to continue with its vision. The process occurs at the ADNOC schools where different students acquire the knowledge necessary to gain the prerequisite skills for the management of various activities and processes that happen in the oil and gas industry. Logically, when these students secure chances at world universities, they would become future leaders and employees of ADNOC (ADNOC, 2017b). Therefore, the strategy ensures the availability of the required workforce. Moreover, the move to run a technical institute is wise since it contributes significantly to the sustainability of this organization. The learning institution exposes the Emiratis to the skills required for the handling of oil and gas products. Students who accomplish their education in this institute develop the technical prowess required for the management of various processes that occur in the oil and gas industry. In terms of corporate sustainability, these students provide the needed experience for the accomplishment of different activities at the company. Another facet of the social dimension in which ADNOC engages is the support of the community in terms of employment and domination. The move to participate in these activities is critical in the sense that they make the organization earn a good reputation. In this way, the company can attract more customers which would ensure the sustainability of its operations. In terms of implementation, the analysis of the activities and projects that the management undertakes is enough evidence for commitment toward the realization of corporate sustainability objectives. The company has implemented various plans; for example, it has trained over 3,500 technicians (ADNOC, 2017b). Therefore, they stand a better chance to accomplish and continue with their corporate sustainability goals.
Apart from that, ADNOC management participates in projects that aim to promote environmental protection. One of the approaches is the identification and mitigation of risks that relate to health, safety, and the environment. For example, ADNOC runs a program that ensures a continuous evaluation of the businesses that exist in this organization. Thus, it can prevent any procedures that could lead to adverse effects on the environment. Next, engagement in projects that focus on marine protection is of fundamental significance in promoting the activities of this company. For example, the plantation of reeds promotes aquatic life. Moreover, climate change remains a challenge, as every nation strives to reduce its impact on the environment. ADNOC is yet to implement a joint project with Al Reyadah that would see annual utilization of about 800,000 tons of carbon dioxide (ADNOC, 2017a). It would significantly reduce the effect of carbon dioxide on climate change, thus making the operations of this company sustainable.
Recommendations
Following the prevailing situation at ADNOC, some recommendations prove essential if the management wants to ensure corporate sustainability. Firstly, the company needs to increase its technical training capacity if it aims to enhance sustainability (Lehman, 2015). The technical institute imparts skills that prove vital in the management of oil and gas. As a result, ADNOC would continually get the right employees to continue with its operations.
Apart from that, the management of this company should engage participants in public awareness programs instead of building health infrastructure (Lehman, 2015). Today, health has become a serious issue, and therefore, the public should get full complete knowledge of cancer and other disease management to overcome these challenges.
Lastly, the management should engage in more joint programs to ensure that the carbon dioxide that the organization emits is controlled and reduced (ADNOC, 2017a). The process would ensure that the company prevents climate change, which results mainly from oil and gas products. Consequently, the provision of sustainable climate change contributes to corporate sustainability.
Summary and Conclusion
ADNOC is a government-owned company in the UAE, and it operates in the oil and gas industry. It is one of the largest oil companies in the world in terms of its reserves and production capacity. Thus, to ensure that its operations remain sustainable, the organization engages in social and environmental activities. The social dimension of corporate sustainability includes investment in education and participation in community activities. ADNOC has invested in high schools and technical institutes that promote knowledge acquisition and skills among Emiratis. The strategy is useful since it leads to the availability of the skilled labor required for the sustainability of operations and activities of ADNOC. Apart from that, engaging in the development of infrastructure affects the social lives of people positively, hence making the company earn a good reputation. The management of this organization engages in projects that aim to promote environmental sustainability. For example, it participates in marine activities such as the rehabilitation of coral reefs. Another important environmental project that the company management focuses on is the control of climate change. For example, the organization undertakes a joint project to promote the utilization of carbon dioxide. However, the company should check the recommendations provided in this report to enhance its sustainability.
