Kuala Lumpur: Malaysia has been recognised as the only ASEAN jurisdiction to adopt the international sustainability standards board (ISSB) standards with limited transition, according to the international financial reporting standards (IFRS) foundation’s latest jurisdictional profile. In a statement today, Securities Commission Malaysia (SC) said the recognition in the jurisdictional profile underscores the global standing of Malaysia’s national sustainability reporting framework (NSRF).

According to BERNAMA News Agency, the NSRF was launched in September 2024 and was developed by the advisory committee on sustainability reporting (ACSR). It represents a significant step in advancing Malaysia’s corporate sustainability agenda. The NSRF phases in the adoption of ISSB standards, specifically IFRS S1 and IFRS S2, starting with a ‘limited transition’ approach. Malaysia extends certain transitional standard reliefs, including ‘climate-first’ reporting and deferred Scope 3 greenhouse gas emissions disclosures.

SC explained that this approach facilitates a smooth transition to the full adoption of the ISSB Standards, while recognising the varying levels and maturity of sustainability practices and reporting across companies. SC chairman Datuk Mohammad Faiz Azmi highlighted that the advisory committee on sustainability reporting welcomes the ISSB’s endorsement, which represents important recognition of Malaysia’s efforts to use the ISSB standards as the baseline for sustainability disclosures.

He emphasized that the ACSR is aware of the high standards set by the ISSB for sustainability reporting and the challenges this may pose to entities. However, he reiterated the commitment to equipping reporting entities to meet these requirements.