Environmental, Social, and Governance (ESG) issues have shifted to the core of corporate strategy and reporting in recent years. For Malaysian companies, this shift has been accelerated by the launch of the National Sustainability Reporting Framework (NSRF) by the Securities Commission of Malaysia on the 24th of September 2024, aimed at aligning businesses with global standards.
Preparing a sustainability statement can be challenging. As businesses prepare for their upcoming reporting cycle, understanding the requirements of sustainability reporting is critical to avoid last-minute challenges. This article explores how Malaysian companies, especially those listed or seeking to list on Bursa Malaysia’s Main, ACE Markets and large non listed companies, can be ready for this new era of ESG accountability.
How Companies Can Prepare?
1. Conduct Sustainability Risk and Opportunity Assessment (“SRO”)
Identify and integrate sustainability-related risks and opportunities, especially climate risks, into your enterprise risk management framework. Refresh materiality assessments with stakeholder input and evaluate the potential financial impacts.
2. Strengthen Oversight on ESG Responsibilities
Ensure the Board has proper oversight of ESG strategy, targets, and reporting. The management should implement strong governance frameworks, policies, and controls to validate sustainability-related data across the organisation.
3. Establish a robust data collection, monitoring, and verification system
Develop systems to capture reliable sustainability data, especially GHG emissions, in line with Bursa and IFRS S2 requirements. Accurate data enables effective strategies and progress tracking towards goals such as net-zero.
4. Seek independent assurance to enhance the credibility of disclosures
Obtain internal audit reviews or independent assurance on sustainability disclosures to strengthen credibility, transparency, and stakeholder confidence in reported information.
