Kuala Lumpur: The Securities Commission Malaysia (SC) is concerned about the ability of ‘Group 2’ and ‘Group 3’ listed companies to comply with the National Sustainability Reporting Framework (NSRF). As a result, chairman Datuk Mohammad Faiz Azmi said the SC will launch a toolkit to help companies transition from the Global Reporting Initiative (GRI) to the International Sustainability Standards Board (ISSB) guidelines.
According to BERNAMA News Agency, last year, the SC paid 100 accountants to assist with GRI, and plans are underway to support an additional 50 this year. The SC is set to provide the toolkit, which aids the transition from GRI to ISSB, free of charge to all companies. The announcement was made during the launch of PwC Malaysia’s inaugural Corporate Directors Survey 2024.
Mohammad Faiz highlighted that Malaysia is also looking to Singapore’s model accounts for ISSB in the real estate sector as a learning example. However, he noted the need to address other sectors like construction, palm oil, and finance. To this end, efforts are being made to replicate Singapore’s model in Malaysia.
Many large listed companies have begun the transition process due to compliance requirements in other jurisdictions. Mohammad Faiz expressed concern for other companies that need to comply by next year. He emphasized the NSRF as a testament to Malaysia’s dedication to providing consistent, comparable, and reliable sustainability information within its corporate sector.
The SC has introduced an initiative called ‘PACE’, aimed at aiding companies in adopting the NSRF. This initiative offers various resources, including policy guidance, an emissions calculator, and capacity-building programs, to help companies of all sizes meet sustainability reporting requirements.
On a regional level, the SC is advocating for a regional taxonomy for adaptation termed ‘MARS’ (mitigation, adaptation, resilience, and sustainability) and is focusing on the carbon market. The SC will chair the ASEAN Capital Markets Forum (ACMF), comprising capital market regulators from all 10 ASEAN jurisdictions, to develop a regional capital market plan over the next five years.
The ACMF consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. There is strong support for regulating the carbon market at the ASEAN level.
Following the NSRF’s launch last year, Malaysia joined over 20 jurisdictions in implementing the reporting standards. Companies listed on Bursa Malaysia’s Main and ACE Markets, along with large non-listed firms with annual revenues of RM2 billion or more, are required to comply with the new sustainability reporting standards.
Approximately 130 companies, listed on Bursa Malaysia’s Main Market, will need to comply with International Financial Reporting Standards (IFRS) S1 and S2, focusing on climate disclosures, starting in 2025, with the first report due in 2026. Group 2 issuers on the Main Market will adopt the standards in 2026, followed by Group 3 issuers on the ACE Market and large non-listed companies in 2027.