Getting to know Topic Area 4: sustainability, corporate social responsibility and integrating reporting

May 01, 2020
John Munnelly and Claire Bergin from the FAE lecturing team discuss their expectations and the importance of Topic Area 4 of FAE Core.

Humanity has always been industrious. From early trade to modern commerce, people have found ways to create and trade exchanges of value. The notion of commerce came from the formalisation and organisation of such trade. What has become increasingly apparent in this century as commerce has globalised is humanity’s impact on its surroundings. Industry and commerce have a greater impact on our way of existing than we as individuals do.

Newly introduced at Topic Area 4 – corporate social responsibility (CSR), sustainability, and integrated reporting (IR) – should not be underestimated by FAE candidates. Topic area 4.5 has a wide remit and candidates need to expand their perceptions when studying this area.

Central to operations

A criticism levelled at CSR, sustainability, and IR is a 'nice to have', that it is something for global conglomerates with dedicated departments to produce colourful appendices to the annual report. The reality could not be further from the truth. FAE candidates need to understand CSR is a must-have for businesses to be successful today and into the future. It is not something that is done on the outskirts of the business or just for those people who are interested in the space. It should be central to the operations of a successful business but more so central to a sustainable business. This requires a new way of thinking, critical thinking, another tool in the Chartered Accountants skill set. 

The topic area sets out to arm candidates with frameworks and tools that allow them to develop responsible, ethical and sustainable business mind-sets when facing challenges – not only in their FAE examinations but also in their day-to-day roles and future careers as leaders in the marketplace.

An accountant’s role in sustainability

Starting with the widest focus possible, candidates must understand businesses role in solving society’s biggest social and environmental issues. The most obvious place to start is at the United Nations Sustainable Development Goals framework and The World Business Council for Sustainable Development.

From an Irish perspective, Business in the Community Ireland (BITCI) is the group working to bring businesses together to help make a positive change in society – The Leader’s Group on Sustainability is an excellent example of a working group that is CEO-led. Northern Irish candidates can check out Business in the Community Northern Ireland, as well. 

Candidates should understand that the best types of CSR strategies/approaches are those aligned to the business strategy and purpose. It must have buy-in and be led by senior leadership for it be authentic both internally and externally, and it should not be used as a PR method. 

A wider focus on CSR

It’s important for candidates to realise that CSR is not just community- or charity-focused. It is about a business being responsible in all facets of its operations. A useful framework to distil this wider focus is the four key pillars of CSR:

  • Community; 
  • Environment; 
  • Workplace; and
  • Marketplace.
In Ireland, the certification for responsible business that is accredited by BITCI and audited by the NSAI is The Business Working Responsibility Mark. There is also a similar American version, the B Corp Certification, that is used around the world and synonymous with some well-known brands. 


Closely aligned to CSR is sustainability. Candidates must understand the complexities of sustainable procurement. If we consider current global events, candidates should question whether current procurement practices are sustainable in the longer term. Can a reliance on a race-to-the- bottom for price as a means of competitive advantage be sustained to increasingly conscious consumers? Candidates must understand that there needs to be transparency within the supply chain to meet the demands of clients, customers, and other suppliers.

Integrated reporting

Finally, candidates must be aware that the future of corporate reporting will be in the integrated reporting model; some companies have already chosen to prepare their finances in this way.

CSR, sustainability, and integrated reporting exams

Exam indicators will seek to test candidates' ability to recognise the appropriateness and practicality of implementing the correct measures in the correct situation. Sometimes starting with basics, along with the correct support from senior management, can have the most profound effects for a business. Candidates need to combine scepticism with what is achievable and measurable, and not what is aspirational and unenforceable. Candidates might find themselves having to critique a company’s CSR policy (or lack of), sustainable practices (or lack of), or questionable activities; they should identify gaps and recommend improvements. Indicators could also present candidates with a crisis caused by breaches of CSR and they will have to advise how to react appropriately to the situation. 

Candidates should look to current events to draw from interesting real-time, real-life examples of businesses acting responsibly in the current pandemic crisis. All across our economy, different industries are responding in customer-focused ways. In banking, forbearance on debt is being offered. In logistics and shipping, they are prioritising essential economic supply. Even at a local level, retailers are prioritising the needs of vulnerable groups such as the elderly with dedicated shopping times and delivery. 

American author, Mark Twain is credited with the saying "It is never wrong to do the right thing." CSR, sustainability, and IR go beyond the boundaries of the businesses and to the centre of humanity. 

Candidates should remember that they will transition into leadership later in their careers. Be sure to study widely, and learn well as you are the global citizens of tomorrow. 

Enjoy your studies in this area.