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3. Underlying Drivers (see Part I for more)
There is a long-term trend of shifting values in Western and Australian society and its corresponding change in the expectations we have of corporations today. This shift has been underway for some time now, starting in the late sixties, but gathering force in the last decade. The global consumer of the 1990s is morphing into the world citizen of the new millennium. We are shifting in increasing numbers from me, more and greed to we, enough and need. Holism, wellbeing and responsibilities are taking over centre stage from materialism, achievement and rights.
Because this process is slow and the previous values remain deeply engrained in large parts of the population, we tend to ignore much evidence of this shift which can be seen in the growing trend in downshifting, corporate social responsibility and the rise of the green vote. It can also be seen in the growing popularity of alternative medicine, yoga and meditation.
Consumers increasingly demand that companies act responsibly and have started to make their purchasing decisions accordingly. Employees take their cues from Generation Y and refuse to work a 60+ hour week. Activists continue to draw attention to issues such as child labour, environmental pollution and product safety. The overall pace of change will continue to be slow, barring further accelerating events, such as the Enron-Andersen scandal.
Another key driver is the ever-growing importance of corporate reputation in the valuation of a company. The modern, knowledge based corporation has very few tangible assets and 70-80% of its market valuation is an amalgamation of intangible assets: employees, reputation, brand, values, vision, patents, processes, licenses, designs, rights etc. With reputational capital being slow and difficult to build and easy to destroy it makes sound business sense to invest in protecting the company’s reputation and to actively manage risks that may impact it.
4. Areas of CSR
Given the broad definition of CSR there are many areas of business operations that are affected by it. The most often mentioned elements of CSR are:
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