University of Vaasa - Vaasan yliopisto

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business of sustainability and corporate social responsibility (CSR). This paper will
look at the CSR role of newly established RE companies and will discuss the case of
MASDAR especially after the Abu Dhabi government announced that seven percent
of power has to come from RE sources by year 2020. This paper starts by reviewing
the CSR literature, and then looks at the environmental challenges in Abu Dhabi. The
role of MASDAR as the “Prime Mover” in the RE sector is highlighted including its
sustainability and CSR practices.
Literature Review of CSR
Since 2000, the European Union (EU) has been engaged in developing a framework
for Corporate Social Responsibility with tools for assessing standards (Streimikiene
et al. 2009). In their Green Paper, the Commission of the European Communities
described CSR “as a concept whereby companies integrate social and environmental
concerns in the business operations and in their interaction with their stakeholders on
a voluntary basis.” Socially responsible means going beyond compliance, investing
more into human capital, the environment and relations with stakeholders and not
just fulfilling legal obligations (CUC 2001). CSR was acknowledged as an
opportunity for enterprises in Europe to contribute to a sustainable growth and job
creation. CSR can play a leading role in enhancing Europe’s innovation potential and
competitiveness. Some of the proposed actions to promote CSR practices include
awareness-raising and practice exchange, support to multi-stakeholder initiatives,
cooperation with member states, consumer information transparency, research,
education, and international dimension of CSR (CUC 2006). Better regulations,
instruments, mainstreaming CSR with EU policies and programs, and Europe’s
contribution to global CSR were also proposed (CUC 2007).
CSR has evolved over time since it was first debated in 1932 by Professor Dodd
when he said that corporate managers have responsibilities to the public as a whole
and not just to shareholders (Dodd 1932). CSR has also evolved through the years
from philanthropy to strategic philanthropy, from investing to socially responsible
investing (fund screening, social advocacy, community investment), from
entrepreneurship to social entrepreneurship, from venture capital fund to social
venture capital fund, from an MBA to an MBA in CSR, corporate social
responsibility and profitability (employees, customers, governments, media), and the
bottom line (Cochran 2007).At the global level, many international accords were
initiated to promote voluntary CSR practices. Such accords include the UN Global
Compact (UNGC), Global Corporate Citizenship Initiative (GCCI), Equator
Principles for Financial Institutions (EPFIs), and the UN Principles for Responsible
Investments (UNPRI) (Sadler & Lloyd 2009). The UNGC, which was launched at
UN headquarter in 2000, is a strategic policy initiative for businesses that are
committed to aligning their operations and strategies with ten universally accepted
principles in the areas of human rights, labor, environment and anti-corruption as
shown in Table 1 (UNGC 2000).