Even as countries in other parts of the world roll back or delay sustainability reporting requirements, Malaysia’s financial regulators say they want to help companies comply with timelines for disclosures announced last year.
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In a press statement on Monday, the country’s Advisory Committee on Sustainability Reporting (ACSR) announced that it would take a “phased and practical approach” towards reviewing disclosures under the National Sustainability Reporting Framework (NSRF) launched last year.
The NSRF requires Malaysian companies, starting with the largest publicly listed ones, to disclose sustainability-related information using the International Sustainability Standards Board (ISSB) framework beginning 2025.
ACSR, which is chaired by the country’s Securities Commission of Malaysia (SCM) and whose members include the country’s central bank, Bank Negara Malaysia, as well as stock exchange regulator Bursa Malaysia, acknowledged the transition period for companies to adopt the ISSB standards.
Malaysia’s National Sustainability Reporting Framework (NSRF) lays out a phased timeline for companies to adopt globally recognised sustainability reporting standards. Image: National Sustainability Reporting Framework/ Ministry of Finance, Malaysia
This comes amid a global pushback against sustainability reporting requirements. Earlier this year, the European Union moved to ease its Corporate Sustainability Reporting Directive (CSRD) requirements and later, its deforestation-free regulations (EUDR).
In August, neighbouring Singapore said it would delay ISSB-aligned climate reporting requirements for smaller listed firms by up to five years.
But in Malaysia, financiers have defended their plans to reduce emissions and finance the transition towards net zero, given rising global temperatures.
ACSR has kept its requirement for public-listed companies as well as large non-listed companies with annual revenues of over RM2 billion (US$486 million) to begin making ISSB disclosures by 2027.
However, it is also upfront about the gaps in capacity affecting Malaysian companies.
“We recognise the challenges companies face in meeting the new sustainability reporting standards due to, among others, a lack of resources, the quality of external data or the difficulty in obtaining necessary expertise,” said SCM chairman Mohammad Faiz Azmi.
“Our approach is to balance the need for compliance with the varied levels of readiness across reporting entities,” he added.
ACSR plans to address general non-compliance through “active engagement and corrective action”, with an emphasis on capacity building and enhancing the relevant skills for sustainability reporting.
“However, reporting entities’ failure to take corrective action to address the deficiencies may result in the relevant authorities taking appropriate enforcement action,” the committee added.
In cases of willful or serious non-compliance of sustainability reporting requirements, ACSR said that it would take “enforcement action” to uphold sustainability standards and public interest.
