Malaysia Sustainability Reporting Rules

Malaysia's National Sustainability Reporting Framework (NSRF) has already started for the largest Main Market issuers. The first question is not whether a company has heard of the International Sustainability Standards Board (ISSB). It is whether the company is in Group 1, Group 2 or Group 3, because that decision controls the first reporting period, how long climate-first relief lasts, when Scope 3 greenhouse gas emissions become mandatory and when reasonable assurance is expected to begin.

Malaysia uses International Financial Reporting Standard S1 (IFRS S1) and International Financial Reporting Standard S2 (IFRS S2) as its baseline, but it does not apply them in one move across every company. Main Market issuers with a market capitalisation of RM2 billion and above moved first, other Main Market issuers follow one year later, and ACE Market issuers and large non-listed companies follow after that.

The other point that changes the working plan is timing. Malaysia did not adopt the International Financial Reporting Standard delayed-reporting relief for the first year. Sustainability disclosures are expected at the same time as the related financial statements, not as a later add-on.

Malaysia's three reporting cohorts

The NSRF phases adoption by company type. For listed issuers, the starting point is the Bursa Malaysia market and, for Group 1, the market-capitalisation test set at 31 December 2024 or the listing date after that. For large non-listed companies, the threshold is annual revenue of RM2 billion or more for two consecutive preceding financial years, measured at consolidated-group level where available.

For large non-listed companies, the revenue test looks back across the two consecutive financial years before the current reporting year. If there is no group-level revenue figure, the threshold is measured at company level. That keeps the scope test close to existing financial-reporting practice rather than creating a separate sustainability boundary just for the NSRF.

Being in scope is also sticky. A Main Market issuer that enters Group 1 does not move out of that cohort because its market capitalisation later falls below RM2 billion. The FAQ takes the same approach to large non-listed companies, although that part remains subject to the policy decision of the Registrar.

Climate first is a timed relief, not the finished regime

Malaysia's early years are climate-first. During the relief period, an applicable entity can disclose only climate-related risks and opportunities in accordance with IFRS S2 and apply IFRS S1 only so far as it supports climate-related disclosure. That does not mean Malaysia rejected broader sustainability reporting. It means the wider sustainability duties arrive after the transition relief ends.

For Groups 1 and 2, that climate-first period can run for the first two reporting periods. For Group 3, it can run for the first three. On the current timetable, that means sustainability topics beyond climate become mandatory from 2027 for Group 1, from 2028 for Group 2 and from 2030 for Group 3.

The same timed relief package also lets entities focus climate-related disclosures on principal business segments and omit Scope 3 emissions during the relief period, except where a regulator already requires a category. That makes the early reporting job narrower, but it does not turn the relief into an exemption from building a wider evidence system. Teams that wait until the final relief year to map value-chain emissions or segment-level judgements will compress the hardest work into the shortest window.

Malaysia did not adopt the delayed-reporting relief

One of the easiest mistakes is to assume the first-year ISSB timing relief applies in Malaysia. It does not. The Advisory Committee on Sustainability Reporting says applicable entities should issue sustainability-related financial disclosures at the same time as the related financial statements so the market receives the full set of information together.

That rule has a practical consequence for listed issuers that publish audited financial statements before the annual report. They are expected to issue the annual Sustainability Statement concurrently with those financial statements, then make sure both documents are incorporated into the annual report later. A team that treats the sustainability statement as something that can trail the financial close by several weeks is planning against the wrong rule.

The ESG reporting deadline tracker is useful here because it separates the start of a reporting period from the later publication window. Malaysia's cohort date tells you when the reporting period begins. The regulator's annual-report timetable still decides when the finished disclosure must be out.

Scope 3 and assurance follow on separate clocks

Scope 3 greenhouse gas emissions do not switch on in the first year for every cohort. Groups 1 and 2 are expected to disclose all relevant Scope 3 information from their third year of reporting, which means 2027 and 2028 respectively. Group 3 reaches that point in 2030.

The same logic applies to measurement method. IFRS S2 ultimately requires use of the Greenhouse Gas Protocol. If an entity is already using a different method, it can continue that method in the first year of adoption by using the ISSB transition relief. After that, the Greenhouse Gas Protocol becomes the expected basis. The Scope 3 supplier data guide explains why supplier boundaries, estimates and factor choices need an evidence trail before the first mandatory Scope 3 year arrives.

Assurance does not wait for every part of the framework to mature. Malaysia's aim is mandatory reasonable assurance over Scope 1 and Scope 2 emissions from annual reporting periods beginning on or after 1 January 2027 for Group 1, 1 January 2028 for Group 2 and 1 January 2029 for Group 3. That timetable is still subject to further consultation, but it is already clear enough to shape control design. A company that plans to tidy evidence only after the first mandatory climate reports are published is likely to build a weak assurance trail.

For listed issuers, IFRS amendments flow through automatically

Bursa Malaysia's Main Market and ACE Market Listing Requirements directly reference IFRS S1 and IFRS S2. The FAQ says amendments to those standards therefore take effect automatically on their effective dates, with early application permitted. That makes Malaysia different from jurisdictions that first need a separate endorsement or a localised standard before updates bite.

The practical lesson is simple: teams should track not only the original 2023 standards, but also later amendments and implementation material. A stable internal summary memo is useful, but it is not enough if the live standard moves and the listing rules move with it.

What Malaysian reporting teams should settle now

1. Confirm the cohort. Keep the market-capitalisation basis, listing status or large non-listed company revenue test with the scope file so a later reviewer can see why the company selected its first reporting year.
2. Map the real publication route. Connect the first reporting period to the annual-report cycle and the same-time reporting rule, especially if audited financial statements are published before the full annual report.
3. Decide which transition reliefs are being used. If the company is relying on climate-first reporting, principal-business-segment focus or delayed Scope 3, the report should explain that choice clearly.
4. Build the Scope 3 evidence trail before it is mandatory. Relief on the filing date does not remove the need to decide boundaries, data owners, estimates and review controls now.
5. Prepare for assurance through the control system, not after it. Reasonable assurance over Scope 1 and Scope 2 is expected to arrive early enough that source files, calculation versions and review logs should already be traceable.

Malaysia's NSRF is already an operating timetable, not a broad direction of travel. The correct answer begins with the cohort and the annual-report process, then moves through the climate-first reliefs, Scope 3 transition and assurance path. A company that gets those clocks in the right order has a workable reporting plan. A company that treats the NSRF as one generic ISSB adoption date does not.

Sources

• Securities Commission Malaysia: National Sustainability Reporting Framework microsite
• Securities Commission Malaysia: who must prepare a sustainability report and by when
• Securities Commission Malaysia: FAQ on the National Sustainability Reporting Framework, issued 14 January 2026
• Bursa Malaysia: media release on mandatory sustainability reporting using IFRS Sustainability Disclosure Standards
• Feature image: Bursa Malaysia by Travelpleb, via Wikimedia Commons