CSR PROGRESSREPORT

COMMUNITY ENGAGEMENT AND THE ENVIRONMENT ASSETS AND OPPORTUNITIES- MAKING THE MOST OF WHAT WE’VE GOT

From our PCEO Our recent achievements in community engagement and environmental protection reflect just how much we have grown as an airline since our formation in 2003.

As well as increasing our network, growth represents the increased impact we are able to have on local communities, made possible by our employees and their untiring enthusiasm to make a difference. Our employees demonstrated ongoing community commitment, with many involved in charity activities of their own accord and through our newly launched iVolunteer program.

Innovation is an area in which we excel as we push the boundaries of the status quo in commercial air travel. This is particularly evident in our efforts to shape regional discussion on aviation biofuels.

The last few years have seen us play a vital role in developing a sustainable aviation biofuel industry in the UAE. This helped to add the UAE to the small list of countries that have produced and flown on their own aviation biofuel– a major milestone for the airline and for the UAE, as the program supports Abu Dhabi’s Vision 2030 and the UAE National Innovation Strategy.

Growth also represents maturity. We recognise the need for an evolution in our CSR approach, formalising our efforts to ensure the delivery of long-term humanitarian and charity commitments as part of our role as a global corporate citizen.

The progress we have made enables a strong foundation for further achievement in the future.

‘Our business continues to grow and this needs to be done sustainably.’

James Hogan President and Chief Executive Officer

We make progress as we seize new opportunities to help make a difference to the industry and within communities in which we operate.

This report highlights some of these initiatives, with a focus on community engagement, charity support and environmental impact. It outlines our commitments and explains how we use our airline assets more fully to ensure we are truly making the most of what we’ve got.

Linden Coppell, Head of Sustainability

Etihad Airways works with key stakeholders to implement its ‘Together’ Corporate Social Responsibility (CSR) program.

‘Together’ is built on four key pillars:

OUR SUSTAINABILITY VISIONTO DELIVER MEANINGFUL AND TANGIBLE SUSTAINABILITY COMMITMENTS ALONGSIDE OUR EFFORTS TO BE THE WORLD’S BEST AIRLINE

Our Sustainability Commitments Etihad Airways is committed to realising the following goals:

SOCIAL AND COMMUNITY RESPONSIBILITYRegularly consult with and engage with communities across our network to:

� ascertain the expectations and needs of communities� ensure community investments provide maximum advantage to the lives they are intended to benefit

ENVIRONMENTAL PROTECTIONMinimise our impact on the environment through the following actions:

� Reduce our dependence on fossil fuels and minimise the release of carbon dioxide and other greenhouse gases into the environment

� Use water wisely throughout our business� Maximise recycling and minimise landfill waste� Consider options for products with recycled content and after-life reuse � Seek sustainably sourced products and materials, with recognised sustainability credentials� Source locally where possible, within the communities in which we operate

EMPLOYEE ENGAGEMENT� Drive employee awareness of the necessity of living and working sustainably � Encourage employee engagement in positive community activity

CONTINUAL IMPROVEMENT� Set and manage meaningful targets to improve continuously our sustainability performance based on

globally identified criteria, our shareholder mandate and stakeholder expectations� Replicate our credentials when working with suppliers and service providers

COMMUNITY INVESTMENT AND ENGAGEMENTOUR CONTRIBUTION TO ABU DHABI, THE UAE AND THE BROADER COMMUNITIES IN WHICH WE OPERATE IS FOCUSED ON UTILISING OUR ASSETS; OUR AIRCRAFT AND OUR PEOPLE. WE CONTINUE TO GIVE GENEROUSLY AND TO LOOK FOR OPPORTUNITIES FOR PARTNERSHIP AND COLLABORATION TO MEET OUR GOAL – TO PROVIDE A POSITIVE BENEFIT TO THESE COMMUNITIES.

⊲ Our Aircraft We continue to give generously through our core asset – our aircraft. The provision of air tickets is extremely valuable to the charities that we support. Flights are a significant financial cost to many organisations and by providing these, we are transporting charity and humanitarian aid workers to the places they need to be and are assured that more resources can be diverted into direct assistance.

We also donate air tickets to charities as popular prizes in auctions or raffles, helping to raise essential funds for good use.

Over 300 tickets were provided directly to charities in 2014.

⊲ Working HandsUnder the leadership of hand surgeon Dr. Donald Sammut, medical volunteers take three weeks out of their busy work schedule each year to travel to a remote region of Nepal to carry out hand surgery on leprosy sufferers and burn victims and to train local doctors.

www.workinghandscharity.org

⊲ The Choice to ChangeEducation for slum children in Dhaka, Bangladesh is a dream that is being realised for Slovakian Eva Nemcova and Sunil Baroi, a Bangladesh resident. They now run two successful schools in the most poverty-stricken areas of Dhaka, educating over 148 children.

www.thechoicetochange.org

⊲ Magic BusEstablished by Matthew Spacie in 1999, this highly innovative and successful enterprise focuses on empowering the youth across India. It now reaches out to over 250,000 children throughout the country through an activity-based curriculum with the support of 8,000 youth mentors.

www.magicbus.org

⊲ MOSAIC International Leadership ProgramThe program brings together young leaders aged 35-25 from around the world for a two-week residential training conference, featuring world-renowned leadership trainers and speakers.

It focuses on global poverty, sustainability and bringing communities together, developing leadership skills and inspiring thinking about global issues.

www.mosaicnetwork.co.uk

⊲ Create and InspireAn international arts initiative launched by The Crossway Foundation to identify young creative talent, Create and Inspire runs a competition offering the opportunity to acquire skills, confidence and networks for a career in the creative industries.

www.crossway-foundation.org

⊲ Maria Christina FoundationMaria Conceicao set up this foundation to help break the circle of poverty. The programs under the foundation include providing education for the children of Bangladesh both within the country and in the UAE and sourcing meaningful employment opportunities.

www.mariacristinafoundation.org

NEPAL EARTHQUAKE – OUR DISASTER RESPONSEON 25 APRIL 2015, A MAGNITUDE 7.8 EARTHQUAKE STRUCK CENTRAL NEPAL, FOLLOWED BY A SECOND 7.3 MAGNITUDE EARTHQUAKE ON 12 MAY WITH MANY AFTERSHOCKS IN THE RANGE OF MAGNITUDES 5.6 TO 6.3.

Our immediate efforts focused on a number of areas of assistance:

� Ensuring the safety of our own staff and the families – with 25 staff based in Nepal the airline’s emergency response team immediately organised relief items including food, water, clothing, tents, blankets and many other items for the staff and their families. Nepalese staff in Abu Dhabi, numbering over 600, were offered flights back to their families and all were given the option for an advance in salary.

� Working with Airlink, an organisation that connects its partner airlines with relief agencies, Etihad Airways was able to ensure free passage for over 50 immediate relief workers from all over the world into Kathmandu.

The airline also assisted in other important ways, including the donation of 5,000 blankets to Red Crescent which were sent immediately to Nepal and generous free baggage allowances to guests travelling to assist in relief efforts. Since the earthquakes, the airline has allowed many hundreds of guests to travel with additional luggage amounting to over 10,000 kilograms. As the rebuilding of homes, villages and towns continues, this support is ongoing.

Within a few days of the disaster the employees of Etihad Airways began to find ways to raise funds. Bake sales, a raffle, sports tournament and direct donations have resulted in over AED270,000 being collected, through the overwhelming generosity of employees. This money has been donated to the Prime Minister Relief Fund in Nepal, with a request that the funds are used to help in the rebuilding of homes.

Our People The number of Etihad Airways employees now exceeds 25,000 - another core asset of our business.

We launched our iVolunteer scheme in mid-2014 in recognition of the growing number of employees in the airline and the potential benefit that they can bring to the wider community.

iVolunteer provides charity and community assistance opportunities for staff, as well as building a corporate responsibility culture where giving back to community becomes a natural and easy choice for them to make.

Registered iVolunteers can utilise lists of community and charity organisations in the UAE and elsewhere that they would like to support. In addition the CSR team organises specific events for iVolunteers, including charity missions in the UAE and elsewhere.

A small group of our employees from Abu Dhabi, together with Nepal-based staff, visited an orphanage and several other residential facilities in Kathmandu to distribute clothes, toys and blankets donated by Etihad Airways’ iVolunteers.

A mission to Vietnam supported Operation Smile, providing this global charity with much-needed blankets, duvets and people resources to process patients for facial surgery.

Our Guests We can support guests who are involved in charity and community work by providing extra baggage allowances. We carefully review each request through a formal process before offering support.

Additionally, we have a number of charities listed in Etihad Guest, the airline’s loyalty program that enabling members to donate air miles to a charitable organisation. In 2014 over 21 million miles were converted to cash and donated to 66 charities.

The efforts to support Nepal earthquake victims were extended to our guests with the establishment of a specific miles donation opportunity. With the donation to the Red Crescent, guests were invited to donate air miles to help the victims of the disaster. The extraordinary generosity of our guests led to a total donation of 30 million miles.

Formalising and Measuring Our CSR EffortsIn 2014, we established a ‘Community Engagement Committee’ with representatives from our medical team, sponsorship, strategy, health and safety and sustainability.

The first task was to agree a Community Investment Policy, which identified our key focus areas and reflected our aim to bring socio-economic sustainability to local communities.

The policy ensures our support is focused on assistance in the following three areas; � Social development: the education of children and vocational training of adults;� Health and wellness: enabling and encouraging a safe and healthy lifestyle; and� Community traffic and transport safety.

The policy is now being used to assess all requests for charity support to ensure that any initiatives that the business commits to meet the following criteria:

� Demonstrates a clear strategy and objectives with tools in place to ensure effective execution;

� Operates within those communities where Etihad Airways maintains a significant business presence; and

� Is able to report on the impact of the contribution.

MANAGING OUR ENVIRONMENTALIMPACTSOUR SUSTAINABILITY VISION REFLECTS ETIHAD AIRWAYS’ CORE ENVIRONMENTAL PRIORITIES AND IS CLOSELY ALIGNED WITH THE COMMITMENTS OF THE BROADER AIRLINE COMMUNITY.

Reducing Fossil Fuel Dependence We continuously monitor our fuel efficiency and identify opportunities throughout the business to improve and ultimately reduce our emissions. These are identified throughout all aspects of our technical and operational activity, from routine maintenance through to sophisticated flight planning systems.

We maintained a highly efficient fleet again in 2014, with 686 g CO2 per total tonne kilometre (passengers and cargo). This represents an improvement of 14.1 per cent since 2008.

For our passenger fleet the improvements over time are more pronounced with 113 g CO2 per passenger kilometre in 2014, a 24 per cent improvement on 2006.

Whilst these efforts are commendable, other initiatives are required to ensure the industry meets its ambitious carbon reduction targets, most notably the carbon neutral growth 2020 goal.

The development and use of sustainable alternative aviation fuel is an area in which we have been highly active in the last five years. 2014 saw us lead the discussion with key UAE stakeholders, encouraging local policymakers to look at alternative fuel sources in Abu Dhabi and collaborating with local organisations including Takreer, the Abu Dhabi National Refining Company, Masdar Institute, Environment Agency Abu Dhabi and others.

⊲ The Sustainable Bioenergy Research Consortium (SBRC) Etihad Airways is a founding partner of the SBRC, led by the Masdar Institute for Science and Technology. In conjunction with Boeing, Honeywell’s UOP, SAFRAN, GE and Takreer, the SBRC is tasked with identifying commercially viable pathways for the production of sustainable alternative aviation fuel, which can be used on flights throughout the world.

The SBRC’s flagship project is the Integrated Seawater Energy and Agriculture System (ISEAS), which focuses on the development of a sustainable feedstock from which to produce a sustainable alternative fuel.

The ISEAS makes use of nutrient rich effluent from fish and shrimp farms to provide the water and nutrient needs for a saltwater tolerant plant that can be converted to fuel.

In June 2015, construction started on the two hectare ISEAS pilot facility at Masdar city. This fully functioning facility will act as a test bed for the ISEAS, trialing different conditions to optimise all aspects of the integrated system.

The pilot facility will be operational by the end of 2015.

Pump seawater from the ocean to ponds, where fishand/or shrimp will be grown

Biomass from the halophytes is used to produce bioenergy, including biofuels.

Water that drains from the halophyte fields would then be fed into a mangrove wetland

Biomass from the mangroes can be converted into bioenergy

Aquaculture for fish and shrimp Wastewater from the aquaculture operation, which is enriched in nutrients, is used to irrigate salt-tolerant biomass (haiophytes)

The Integrated Seawater Energy and Agriculture System

⊲ BIOjet Abu Dhabi: Flight Path To Sustainability

Etihad Airways is also collaborating with Boeing, Takreer, Total and the Masdar Institute of Science and Technology on an initiative to support a sustainable aviation biofuel industry.

BIOjet Abu Dhabi was announced in January 2014, one day after Etihad Airways conducted a demonstration flight with a Boeing 777 powered in part by the first UAE-produced aviation biofuel made from plant biomass. The biofuel was partially converted to liquid fuel by Total and its partner Amyris. Takreer was responsible for the final distillation process to create approved aviation fuel, adding the UAE to a handful of countries that have produced and flown on their own aviation biofuel.

The BIOjet Abu Dhabi roadmap was launched in June 2015, following an extensive year-long dialogue between Etihad Airways, its four BIOjet Abu Dhabi partners, and UAE and global stakeholders. It explains Abu Dhabi’s potential to produce aviation biofuel locally, in a sustainable way, taking account of all elements of the supply chain from feedstock supplies to biorefining and distribution.

The roadmap explores how a supply chain can be established in the UAE through the exploration of sustainable feedstocks, new infrastructure requirements and necessary policy frameworks. It clearly indicates that Abu Dhabi holds significant potential to supply domestic feedstocks for use in aviation biofuel.

The concluding action plan identifies opportunities, challenges and concerns in the commercial scale-up of domestic biofuel production.

The BIOjet Abu Dhabi roadmap can be downloaded at www.etihad.com/csr

WASTE MANAGEMENTWE STRIVE TO MANAGE WASTE RESPONSIBLY, WHICH MEANS USING PRODUCTS AND MATERIALS WISELY, AND SEGREGATING RECYCLABLE ITEMS FROM NON-RECYCLABLE ITEMS AND REDUCING OUR IMPACT ON THE ENVIRONMENT.

⊲ RecyclingA joint recycling effort between our crew, who help segregate recyclable materials during the flight, and our catering facility at Abu Dhabi airport results in the collection of more than 120,000 plastic bottles, 12,000 aluminium cans and 20,000 tonnes of glass every month for recycling. They also collect significant amounts of newspapers, magazines and other paper items from our aircraft. We continue to work closely with Etihad Airways Services - Catering to ensure the success of this program and seek opportunities to improve out waste diversion ratio and minimise waste materials that need to be landfilled.

On the ground, recycling facilities are provided in key office locations. In 2014 this practice was also extended to a number of employee residential buildings. Collection bins, together with notices and increased communication, has provided staff with the information required for effective recycling.

⊲ UpcyclingWe implemented ‘upcycling’ initiatives in 2014 to enable the effective reuse of materials for another purpose and which would otherwise go to waste, adding value to otherwise obsolete items.

⊲ Bags from bannersIn 2014 we launched ‘bags from banners’ - a new initiative ensuring marketing banners are re-used once they are no longer needed. Working with a local UAE company, various bag designs were tested and the first batch of tote bags was produced for sale to staff.

⊲ Carpets from uniformsA large volume of employee uniforms were collected by one of our key recycling partners, Enviroserve. They successfully managed to work with a carpet manufacturer in the Netherlands to have this material dethreaded and rewoven into carpets.

⊲ CompostingThe first in-house composting facility was set up at the Etihad Airways headquarters in Abu Dhabi in 2014. Constructed from damaged wooden pallets from the airline’s cargo facility, the bins are used for composting landscaping waste. Coffee granules from the canteens and coffee shop are added to help accelerate the composting process.

SHOWCASING SUSTAINABILITY – OUR SUSTAINABLE GARDEN

This garden is a small demonstration of Etihad Airways’ commitment to sustainability.

It was created using recycled items sourced from within the company, such as the tyres used in the rammed earth wall, the bottles that form the ‘dry river bed’, and the pipes for the fountain.

The energy for the water feature is provided by the solar panel. A water regulator controls how much water the Cycad tree needs, preventing overwatering.

The plants are climate-appropriate and in many cases indigenous to the region. All of the plants have some important use whether it’s medicinal, edible or beneficial in some way to wildlife, people and the environment. The garden will grow and develop as the seasons come and go with flowers, berries or seed pods.

THE YEAR AHEADGOING FORWARDS, WE ARE FURTHER DEVELOPING AND ENHANCING OUR COMMUNITY AND ENVIRONMENTAL INITIATIVES.

COMMUNITY ENGAGEMENTContinuing our efforts to formalise community engagement activities, we will seek to clarify the impact of our community investment programs. A measurement system will be designed and implemented to capture data, enabling us to estimate our ‘social return on investment’.

OUR ‘ANIMAL FOOTPRINT’We encounter wildlife in a number of ways in our day-to-day operations, including through our air cargo transportation and holiday activities that we may promote.

We are developing a strategy to identify the practical assistance that the airline can provide to help prevent the illegal smuggling of animals and to protect our ‘animal footprint’. We are striving to encourage a more compassionate approach towards the care of animals and animal tourism as part of our wider responsibilities as a global corporate entity.

BIOFUELWith the publication of our biofuel roadmap, work will commence on addressing all the actions within the roadmap report.

WASTE MANAGEMENT AND RECYCLINGIn 2014 we started to extend the recycling efforts beyond our core facilities and the aircraft. We will work with our facilities management teams and those in other parts of the business such as cargo, ground services and catering to ensure a consistent recycling practice.

SUSTAINABLE PROCUREMENTSustainable criteria are incorporated within the Etihad Airways’ supplier code of conduct. Our efforts will focus on ensuring effective compliance to this within the supplier community.

etihad.com/csr