The Kareem Abdul-Jabbar Social Justice Champion award was unveiled by the league on Thursday.
The award honours an NBA player for "pursuing social justice and upholding the league's decades-long values of equality, respect and inclusion."
Abdul-Jabbar, a six-time league MVP and NBA champion, long has promoted social justice, particularly in his post-playing career.
"In addition to being one of our greatest players, Kareem Abdul-Jabbar has devoted much of his life to advocating for equality and social justice," NBA commissioner Adam Silver said in a news release. "With this new award, we are proud to recognise and celebrate NBA players who are using their influence to make an impact on their communities and our broader society."
All 30 NBA teams will nominate one player from their roster for the award. The finalists and winner will be selected by a committee composed of NBA legends, league executives and social justice leaders.
The winner will select an organization to receive a $100,000 contribution on his behalf. The other four finalists each will receive $25,000 to donate. The inaugural award will be given this year during the postseason.
"I'm honoured and grateful to be associated with this award that will recognise the dedicated and selfless people fighting to promote social justice for all marginalised people," said Abdul-Jabbar, 74, a 19-time All-Star and member of the Naismith Memorial Basketball Hall of Fame. "To me, it's another giant step in the right direction for the country and all people who value equality."
In 2016, Abdul-Jabbar received the Presidential Medal of Freedom from former President Barack Obama. In 2009, Abdul-Jabbar created the Skyhook Foundation, aimed at providing educational STEM opportunities to underserved communities.
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