Improving Your Sustainability Report (Malaysia SME Guide)

In Malaysia’s fast-changing business landscape, sustainability reporting is quickly becoming a badge of credibility. Large corporations and global clients increasingly demand Environmental, Social, and Governance (ESG) transparency from their partners and suppliers.

For SMEs, this report isn’t just for branding, it’s a trust document. It shows that your business measures impact, manages risks, and aligns with Malaysia’s National Energy Transition Roadmap (NETR) and the country’s National Sustainability Reporting Framework (NSRF), which adopts IFRS S1/S2 as the baseline for sustainability and climate disclosures for in-scope entities.

Between 2023–2025, Malaysian SME ESG adoption increased from about 28% to ~60%, and ESG awareness rose from about 14% to ~80%, driven by supply‑chain expectations and financing needs.

What Is a Sustainability Report?

A sustainability report communicates how your company manages its environmental, social, and governance impact. It’s not just about what you plan to do, but what you’re measuring and improving.

For SMEs, this report can be a powerful communication tool for clients, investors, and employees, reflecting a genuine commitment to responsible growth. If your company lacks the capability to create a sustainability report, enlisting PR services from a trustworthy PR firm can help you in this aspect.

Why It’s Important for Malaysian SMEs

Publishing a sustainability report gives your company a clear advantage. It helps you meet local and international expectations while improving internal efficiency.

• Compliance readiness: Stay aligned with Malaysia’s sustainability roadmap (NSRF, NETR) and disclosure guidelines.
• Investor confidence: ESG performance increasingly affects loan approvals and partnerships.
• Operational efficiency: Energy, water, and waste audits uncover cost‑saving opportunities.
• Brand reputation: Responsible companies attract and retain loyal customers.
• Talent attraction: Younger employees value companies that prioritise sustainability.

Read More: Why Businesses Need To Support Malaysian Sustainability

When and Where to Publish Your Report

Start small. Once you have a few months of reliable data, begin compiling your first report. The best time is after your financial year‑end, when financial and operational data are already consolidated.

Where to publish:

• Your official website under “Sustainability” or “Corporate Responsibility.”
• As an appendix in your annual report.
• Share highlights via LinkedIn posts or a press release for visibility.

If you are a listed issuer: submit sustainability disclosures via Bursa Malaysia’s Centralised Sustainability Intelligence (CSI) platform (through Bursa LINK) in line with the Listing Requirements and the Sustainability Reporting Guide.

If you are a non‑listed SME: publish on your website/annual report and consider using the Simplified ESG Disclosure Guide (SEDG) to standardise disclosures for customers and financiers.

How to Write a Sustainability Report: Step‑by‑Step Guide

(Includes integrated roles and responsibilities.)

Step 1: Identify Material Topics and Stakeholder Priorities

Every business has unique sustainability concerns. A materiality assessment helps you decide what matters most to your stakeholders and aligns your goals with your impact.

Who’s Involved:

• Leadership: Defines strategic focus (e.g., emissions, labour practices).
• Operations: Identifies high‑impact areas like waste and logistics.
• HR: Addresses social issues such as employee well‑being or diversity.
• Customers/Suppliers: Share insights on sustainability expectations.

How to Do It:

• Conduct surveys or short interviews to gather opinions.
• Rank issues by importance and potential business impact.
• Focus on 3–5 priority areas.

For example,  A logistics firm might focus on fuel efficiency and driver welfare, while a food manufacturer may prioritise waste reduction and packaging sustainability. Use the GRI materiality principle as a guide for topic selection.

Step 2: Set Clear Goals and Measurable KPIs

Once you know your priorities, turn them into measurable, achievable goals. Use the SMART framework: Specific, Measurable, Achievable, Relevant, Time‑bound.

Who’s Involved:

• Leadership: Approves strategic goals.
• Finance: Tracks ESG‑related costs or savings.
• Operations: Monitors results and reports monthly.

Example Goals:

• Cut electricity use by 15% within one year.
• Reduce paper consumption by 25% through digital invoicing.
• Increase female representation in management roles to 40% by 2026.

Each goal should include both numerical targets and context to show alignment with business strategy. The UN Global Compact offers practical guidance on setting responsible business goals.

Step 3: Collect, Verify, and Organise Your Data

Accurate data is the foundation of any credible sustainability report. Begin by gathering information from your departments, suppliers, and utility providers.

Who’s Involved:

• Operations: Tracks energy, waste, and raw material data.
• HR: Reports training hours, turnover, and diversity figures.
• Finance: Validates cost‑saving measures and investments.
• Management: Reviews accuracy before publication.

Tips for SMEs:

• Use Excel or Google Sheets for small‑scale tracking.
• Verify numbers monthly to prevent end‑of‑year data overload.
• Keep digital folders with source evidence like utility bills, supplier receipts, and audit reports.

Build your controls around ISO 14001 style practices for environmental data (even if you don’t seek certification).

Step 4: Choose the Right Reporting Framework

Frameworks ensure your report meets international standards and helps stakeholders compare results.

Step 5: Draft, Write, and Design the Report

Once your data is ready, translate it into a compelling, easy‑to‑read report.

Who’s Involved:

• Marketing/Communications: Handles writing, design, and visuals.
• Finance/Operations: Provides data and charts.
• Leadership: Adds a foreword that sets the tone.

Recommended Structure:

1. CEO Statement or Leadership Message
2. Company Overview
3. Material Topics & KPIs
4. ESG Achievements and Initiatives
5. Stakeholder Feedback Summary
6. Future Roadmap

Tips:

• Write in short, clear sentences.
• Include visuals, graphs, and infographics for accessibility.
• Discuss both progress and challenges for balanced reporting.

Step 6: Engage Internal and External Stakeholders

Your sustainability report should reflect a two‑way dialogue. Gathering feedback from stakeholders helps you refine your strategy.

Who’s Involved:

• HR: Conducts internal surveys with staff.
• Suppliers & Customers: Share feedback on ESG goals.
• Management: Reviews input and adjusts policies accordingly.

How to Engage:

• Host annual feedback sessions after publishing the report.
• Include a “You Said, We Did” section in the next edition.
• Use online forms to simplify data collection.

Step 7: Review, Assure, and Publish

Before going public, review everything carefully to ensure accuracy and consistency.

Who’s Involved:

• Leadership: Final approval and sign‑off.
• Internal Audit/Reviewer: Checks factual accuracy and consistency.
• Communications Team: Publishes and promotes.

Checklist Before Publishing:

• Verify figures and data sources.
• Cross‑check that visuals match the text.
• Ensure tone is transparent, not promotional.
• Optimise your report for both PDF and web formats.

Publishing Tips:

• Upload the report on your website.
• Announce key results via social media.
• Email it to partners and investors.
• Listed issuers: disclose via Bursa’s CSI platform per Listing Requirements.

Read More: Sustainable Supply Chain Management For Malaysian Businesses

Common Mistakes to Avoid When Writing a Sustainability Report

Even with good intentions, many SMEs face avoidable pitfalls. Here are the most frequent mistakes and practical ways to avoid them.

1. Overpromising Without a Plan

Setting grand goals like “zero waste by next year” without a roadmap leads to missed targets and lost credibility. Start small, set realistic timelines, and publish both achievements and obstacles.

2. Ignoring Small Wins

Small actions, like recycling or LED upgrades, show genuine effort and can yield measurable impact. Make sure your company records and reports incremental improvements. They demonstrate consistency and build momentum.

3. Using Jargon Instead of Plain Language

Overly technical reports confuse readers. Try to write in simple, direct language. Replace “carbon intensity reduction initiatives” with “lowering fuel use in delivery trucks.”

4. Reporting Without Data Verification

Unverified or mismatched data undermines the entire report. Assign one team to validate all metrics. Keep a log of data sources such as bills, HR reports, and invoices.

5. Copying Corporate Templates

Large company templates often overwhelm SMEs. Use SME‑friendly guides like the SEDG (Simplified ESG Disclosure Guide) and adapt to your capacity. If you are listed, use Bursa’s Sustainability Reporting Guide.

6. Focusing Only on Positives

Hiding missed targets or challenges reduces trust. Dedicate a short “Challenges & Lessons” section that outlines what didn’t work and what you’ll do next.

7. Not Engaging Stakeholders

Ignoring staff or supplier input means missing valuable insights. Where you can, gather simple feedback post‑publication through email surveys or internal polls.

8. Skipping Visuals and Summaries

Blocks of text discourage readers. Use tables, infographics, and short summaries to make complex data understandable at a glance.

9. Publishing Without Review

Rushing a report without interdepartmental checks leads to inconsistencies. Have Finance, HR, and Operations review before release and get leadership sign‑off.

10. Treating It as a One‑Off Project

Reporting once and never updating again gives the impression that your ESG efforts have stalled. Treat it as an annual process. Build a reporting calendar with quarterly data updates.

Read More: The Importance of Sustainability For Malaysian SMEs

Turn Reporting into a Growth Strategy

Sustainability reporting is not just a document, it’s a strategic roadmap for growth. For Malaysian SMEs, it opens access to new partnerships, funding, and long‑term resilience.

By identifying material issues, setting measurable goals, validating data, and communicating transparently, SMEs can demonstrate leadership in responsible business practices.

If you need expert guidance aligning your sustainability data with accounting or tax reporting, look for a reliable PR agency like Press PR Agency Malaysia, which can help your business adjust better to sustainability reporting.

Important Disclaimer: This guide provides general information only and does not constitute legal, financial, tax, or professional advice. Regulatory requirements may change and can vary by entity type. Always consult qualified advisers and refer to official sources before making compliance decisions.