Malaysia consults on mandatory requirement for companies to adopt ISSB standards for sustainability disclosures
Malaysia’s Advisory Committee on Sustainability Reporting (ACSR), chaired by the Securities Commission Malaysia (SC), has published a consultation proposing a mandatory requirement for companies to adopt the ISSB standards for their sustainability disclosures.
In summary: The Consultation paper provides background information and outlines the potential implementation approach and considerations in relation to the ISSB Standards as well as assurance of sustainability information.
Background of the ACSR: The ACSR was formed in May 2023 with the endorsement of the Ministry of Finance, comprising of representatives from the Audit Oversight Board, Bank Negara Malaysia, the Companies Commission of Malaysia, Bursa Malaysia Berhad and the Financial Reporting Foundation.
- The role of the ACSR are to identify the enablers that will facilitate the use of the standards issued by the International Sustainability Standards Board (ISSB), specifically the International Financial Reporting Standards (IFRS) S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1), and IFRS S2 Climate-related Disclosures (IFRS S2) in Malaysia
- The ACSR’s responsibilities also include identifying other supporting elements that need to be in place including a framework for assurance and capacity building, collectively constituting the National Sustainability Reporting Framework for Malaysia (NSRF)
Key features of the consultation: The consultation seeks feedback on the following:
- The use and and application of IFRS S1 and IFRS S2, including the required transition reliefs
- The approach in relation to a sustainability assurance framework
- Enablers and/or support required for (1) and (2)
Given the difference in readiness and maturity of listed issuers and non-listed companies, a different adoption timeline and approach has been outlined in the Consultation. The paper also proposes “transitions reliefs” that would allow companies to focus on principal business segments when making climate-related financial disclosures, making it optional to disclose the impact of climate on strategy and decision-making and relax requirements for Scope 3 emissions disclosures.
Feedback required: The consultation aims to seek feedback on the use and application of IFRS S1 and IFRS S2, including the required transition reliefs, the approach in relation to a sustainability assurance framework, and the enablers or support required. Feedback must be submitted via an online portal by 21 March 2024.
Bloomberg
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