ESG Reporting Guide for Malaysian Businesses

ESG reporting is mandatory for all public-listed companies under Bursa Malaysia listing requirements.

Environmental, Social, and Governance (ESG) reporting has become a critical component of corporate transparency and accountability in Malaysia. What was once seen as a corporate social responsibility (CSR) initiative has now evolved into a regulatory requirement and strategic necessity.

In today’s Malaysian business environment, ESG reporting is no longer optional—especially for listed companies. 

Many businesses collaborate with a PR agency to effectively communicate their ESG initiatives, ensuring that sustainability-related risks, opportunities, and performance are clearly presented to stakeholders.

Regulators such as the Securities Commission Malaysia and Bursa Malaysia have introduced structured frameworks to support consistent and transparent ESG disclosure.

Beyond compliance, ESG reporting plays a vital role in:

• Building investor confidence
• Enhancing corporate reputation
• Supporting long-term business sustainability

What Is ESG Reporting?

ESG reporting refers to the structured disclosure of a company’s environmental, social, and governance practices, risks, and performance metrics.

The Three Pillars of ESG

In Malaysia, ESG reporting is increasingly used by investors and regulators to evaluate non-financial performance and long-term resilience.

ESG Regulatory Landscape in Malaysia

Malaysia’s ESG ecosystem is shaped by multiple regulatory bodies and frameworks.

Key Regulatory Organisations

• Bursa Malaysia
  

• • • Requires all listed companies to publish sustainability statements in annual reports
      

• Securities Commission Malaysia
  

• • • Introduced the National Sustainability Reporting Framework (NSRF)
      

• Bank Negara Malaysia
  

• • • Oversees climate risk frameworks for financial institutions
      

• Ministry of Investment, Trade and Industry
  

• • Developed the i-ESG Framework for manufacturing sectors

These institutions collectively ensure that ESG reporting in Malaysia is aligned with global standards while addressing local economic priorities.

The National Sustainability Reporting Framework (NSRF)

Launched in 2024, the NSRF represents a major milestone in Malaysia’s ESG journey.

Objectives of NSRF

• Ensure consistent and comparable ESG disclosures
• Align Malaysia with global reporting standards (ISSB / IFRS)
• Enhance investor confidence and transparency

Phased Implementation Timeline

This phased approach allows businesses to gradually build ESG reporting capabilities.

Key ESG Reporting Standards Used in Malaysia

Malaysian companies typically adopt a hybrid reporting approach, combining local and international frameworks.

Local Standards

• Bursa Malaysia Sustainability Reporting Guide
• Climate Change and Principle-based Taxonomy (CCPT)

International Standards

• IFRS S1 & S2 (ISSB Standards)
• Global Reporting Initiative (GRI)
• Sustainability Accounting Standards Board (SASB)

These frameworks ensure ESG disclosures are globally comparable and investor-friendly.

Mandatory ESG Reporting Requirements

Under Bursa Malaysia’s listing rules:

Companies Must Disclose:

• Governance structure for sustainability
• Material ESG risks and opportunities
• Management strategies and policies
• Performance metrics and targets
• Climate-related disclosures

Sustainability Statement Requirements

Every listed company must include a Sustainability Statement in its annual report, covering:

• Scope and boundaries
• Key ESG issues
• Data and performance indicators
• Future targets and strategies

Step-by-Step ESG Reporting Process

1. Conduct Materiality Assessment

Identify ESG issues most relevant to:

• Business operations
• Stakeholders
• Industry risks

2. Establish ESG Governance

• Assign board-level oversight
• Create internal ESG committees

3. Define Metrics and KPIs

Examples:

• Carbon emissions (Scope 1, 2, 3)
• Employee turnover rate
• Gender diversity ratio

4. Collect and Manage Data

• Implement ESG data tracking systems
• Ensure accuracy and audit readiness

5. Prepare Sustainability Report

Align disclosures with:

• Bursa Malaysia requirements
• IFRS S1 & S2

6. Obtain External Assurance (Optional but Growing)

• Enhances credibility
• Will become mandatory in phases from 2027

ESG Reporting Example (Simplified)

Benefits of ESG Reporting for Malaysian Businesses

1. Improved Access to Capital

Investors increasingly favour companies with strong ESG credentials.

2. Enhanced Reputation

Transparency builds trust among stakeholders.

3. Regulatory Compliance

Avoid penalties and ensure alignment with evolving laws.

4. Risk Management

Identify climate, operational, and social risks early.

5. Competitive Advantage

Early ESG adopters outperform competitors in long-term value creation.

ESG Challenges in Malaysia

Despite progress, many businesses—especially SMEs—face challenges:

Common Challenges

• High implementation costs
• Lack of ESG expertise
• Data collection difficulties
• Complex reporting standards

SME-Specific Issues

• Limited resources
• Lower awareness of ESG frameworks

However, government incentives and ESG advisory services are helping bridge this gap.

Read more: The Importance of Sustainability For Malaysian SMEs

ESG Trends in Malaysia (2025 and Beyond)

1. Mandatory ESG Reporting Expansion

• More companies, including non-listed firms, will be required to report.

2. Climate Disclosure Focus

• Scope 3 corporate emissions reporting becoming mandatory by 2027

3. Digital ESG Reporting Platforms

• Bursa LINK ESG platform for submissions

4. Increased Investor Scrutiny

• ESG ratings influencing funding decisions

ESG Reporting Best Practices

To succeed in ESG reporting, Malaysian businesses should:

• Start early with ESG integration
• Align with both local and global frameworks
• Ensure board-level involvement
• Maintain consistent and accurate data tracking
• Engage external ESG consultants or auditors

Conclusion

ESG reporting in Malaysia is undergoing a significant transformation—from voluntary disclosures to mandatory, standardised, and globally aligned reporting practices.

For Malaysian businesses, ESG is no longer just about sustainability. It is about resilience, competitiveness, and long-term value creation. 

Companies that proactively adopt ESG reporting, often leveraging PR services to effectively communicate their ESG initiatives, will not only meet regulatory requirements but also gain a strategic edge in attracting investors, enhancing brand reputation, and future-proofing their operations.