Malaysia’s Securities Commission releases guide to help board of directors transition towards sustainability reporting

The Board Guide provides board members with clear steps on governance, sustainability data, and risk management, helping them meet global standards and drive sustainability.

In a bid to strengthen sustainability disclosures in the country, Malaysia introduced the National Sustainability Reporting Framework (NSRF) in September 2024. This framework aligns with the IFRS® Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB), including IFRS S1 and IFRS S2, ensuring consistent and comparable sustainability-related financial disclosures. 

Listed issuers on Bursa Malaysia’s Main and ACE Markets, along with large non-listed companies (NLCos) with annual revenue of RM2bn and above, will comply with the new reporting requirements in a phased approach: 

• Large-listed issuers on the Main Market with a market capitalisation of RM2bn and above will begin using the ISSB Standards in 2025 (Group 1). 
• This will extend to other Main Market listed issuers in 2026 (Group 2). 
• Listed issuers on the ACE Market, along with large NLCos, will follow in 2027 (Group 3). 

To support this transition, the Securities Commission of Malaysia released a simplified guide on 20 January 2025, aimed at assisting boards of directors in adopting the NSRF. 

The guide, titled ‘Navigating the transition: A guide for boards’ (Board Guide), provides boards with simplified and actionable steps on key areas such as governance, sustainability data boundaries, financial impact assessments, and integration with enterprise risk management systems. 

Large companies (with a market capitalisation of RM2bn and above) listed on Bursa Malaysia’s Main Market will begin implementing the NSRF this year, highlighting Malaysia’s commitment to global best practices in corporate sustainability. 

SC Chairman Dato’ Mohammad Faiz Azmi that the NSRF is not a compliance tool; rather, it is a blueprint for embedding sustainability in corporate decision-making.

"With this guide, we are equipping boards to not only meet global standards but to lead with purpose and resilience in shaping a sustainable future for Malaysia," he added. 

To provide further support towards the transition, the Advisory Committee on Sustainability Reporting (ACSR) has launched PACE (Policy, Assumptions, Calculators, Education), an initiative offering training, tools, and resources to support the adoption of the ISSB standards and meet NSRF requirements. 

Upcoming PACE initiatives include an Interoperability Module between the Global Reporting Initiative (GRI) and IFRS Sustainability Disclosure Standards, Illustrative Sustainability Reports to provide companies with references to guide their disclosures, and an NSRF Preparers’ Programme to build capacity.