What Is ESG Reporting In Malaysia? A 2026 Guide For Businesses

ESG reporting is no longer just a voluntary exercise. In Malaysia, the introduction of the National Sustainability Reporting Framework (NSRF) by the Securities Commission Malaysia in September 2024 marked a significant shift towards mandatory sustainability disclosures aligned with the international IFRS S1 and IFRS S2 standards. As regulatory expectations continue to evolve, businesses in Malaysia and Brunei need to understand what ESG reporting entails, who is affected, and how to prepare. This guide by UN Global Compact Network Malaysia, Brunei & Cambodia (UNGCMBC) walks you through the key requirements, reporting timelines, and practical steps to help your organisation get started.

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What Does ESG Reporting Mean?

ESG stands for Environmental, Social, and Governance. ESG reporting is the process of disclosing how a company manages risks and opportunities across these three areas.

• Environmental covers climate impact, emissions, energy use, and waste management.

• Social includes employee welfare, human rights, community engagement, and supply chain labour practices.

• Governance covers board diversity, anti-corruption, executive compensation, and transparency.

ESG reporting allows investors, regulators, and stakeholders to assess a company's sustainability performance alongside its financial results. In Malaysia, ESG reporting is now governed by the NSRF and enforced through Bursa Malaysia's listing requirements.

What Standards Apply? IFRS S1 and IFRS S2 Explained

IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) requires companies to report on sustainability-related risks and opportunities that could affect cash flows, access to finance, or cost of capital. IFRS S2 (Climate-related Disclosures) focuses specifically on climate risks and opportunities, including governance, strategy, risk management, and metrics and targets.

Malaysia has adopted a climate-first approach during the transition period, meaning companies can begin with IFRS S2 climate disclosures before expanding to the broader scope of IFRS S1. The previous TCFD framework has been formally absorbed into IFRS S2, so companies previously reporting against TCFD are now reporting under the more rigorous IFRS standard.

How Can Malaysian Businesses Prepare for ESG Reporting?

What Role Does UNGCMBC Play in ESG Reporting?

UN Global Compact Network (UNGCMBC) is the official country network of the United Nations Global Compact - the world's largest corporate sustainability initiative. With over 300 member companies across Malaysia, Brunei, and Cambodia - UNGCMBC provides practical support for businesses navigating ESG reporting, including localised sustainability courses through the UNGCMBC Academy, CoP (Communication on Progress) clinics, and access to the SME ESG Challenge for smaller businesses starting their sustainability journey.

Whether you are a large-cap issuer already reporting or an SME preparing for future requirements, UNGCMBC offers the tools, training, and network to help you comply and excel.

UN Global Compact Network Malaysia, Brunei and Cambodia (UNGCMBC) is the official country network of the United Nations Global Compact, supporting over 300 companies across the region in their sustainability journey. Learn more about UNGCMBC or become a participant today.