The introduction of the National Sustainability Reporting Framework (NSRF) is set to enhance transparency, accountability, and access to crucial sustainability data, thereby enabling investors to more effectively evaluate corporate sustainability performance in Malaysia.
According to a report by TA Research, the framework’s level of disclosure is expected to reinforce the trust and confidence of investors, policymakers, and civil society in the corporate sector. The research firm highlighted that Malaysia’s alignment with global sustainability standards positions the nation as a competitive player in international markets, with the new standards supporting more informed decision-making on sustainability challenges spanning economic and environmental domains.
Developed by the Advisory Committee on Sustainability Reporting (ACSR), a multi-agency committee that includes representatives from the Securities Commission (SC), the SC’s Audit Oversight Board, and Bank Negara, the NSRF aims to elevate sustainability reporting practices in Malaysia to internationally recognised benchmarks set by the International Sustainability Standards Board (ISSB).
The research report stressed that the adoption of the ISSB standards would ensure consistency and comparability in Malaysian companies’ sustainability disclosures on a global scale. With more than 20 jurisdictions representing 55% of the global economy moving towards ISSB standards, Malaysia’s commitment to these benchmarks enhances its attractiveness as an investment destination.
TA Research stated that the NSRF represents a significant shift towards global best practices in sustainability reporting, creating a robust platform for businesses to elevate their environmental, social, and governance (ESG) credentials. It also highlighted that the phased implementation of the framework fosters a business-friendly environment, enabling companies to adapt to the changes while maintaining their competitive edge.
“The framework not only strengthens the corporate landscape but also solidifies Malaysia’s commitment to becoming a leading sustainable economy in the region,” the report noted.
Despite the NSRF’s potential to elevate corporate sustainability practices to global standards, TA Research cautioned that certain challenges could impede its widespread adoption, particularly for smaller firms. The research firm emphasised the need for proactive measures to support micro, small, and medium-sized enterprises (MSMEs), streamline Scope 3 reporting, and encourage cross-sector collaboration to unlock the framework’s full benefits.
The NSRF is set to roll out through a phased and developmental approach. From 2025, companies listed on Bursa Malaysia’s Main Market with capitalisations exceeding RM2 billion will be required to start complying, with full adherence expected by 2027. Smaller listed entities will follow in 2026, with complete compliance by 2028. Meanwhile, companies listed on the ACE Market and non-listed entities with annual revenues exceeding RM2 billion are expected to adopt the framework by 2027, with full compliance slated for 2030.
TA Research described the staggered timeline as a practical approach, providing businesses with adequate time to align with the new standards. “The phased implementation ensures that companies of various sizes and sectors can adopt global best practices without disrupting their operations,” the report concluded.