Malaysia's National Sustainability Reporting Framework

What it is

The National Sustainability Reporting Framework (NSRF) puts the IFRS Sustainability Disclosure Standards into Malaysian reporting practice. It addresses the use of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, issued by the International Sustainability Standards Board, as the baseline sustainability disclosure standards for companies in Malaysia, as well as the assurance requirements for sustainability reporting.¹

It was developed by the Advisory Committee on Sustainability Reporting (ACSR) with the endorsement of the Ministry of Finance. The ACSR is an inter-agency committee comprising representatives from Securities Commission Malaysia, the Audit Oversight Board of the Securities Commission Malaysia, Bank Negara Malaysia, the Companies Commission of Malaysia, Bursa Malaysia and the Financial Reporting Foundation.¹ It was launched on 24 September 2024 by Finance Minister II at the Securities Commission Malaysia.²

The framework is not itself the binding instrument. It states that it will be implemented through the required legislative and rule amendments using a phased and developmental approach — climate-first, with additional transition reliefs and capacity building support — and lists the instruments to which consequential amendments shall be undertaken, including the Financial Reporting Act 1997, the Companies Act 2016, the Securities Commission Malaysia Act 1993, the Capital Markets and Services Act 2007, Bursa Malaysia’s Main Market and ACE Market Listing Requirements, and relevant standards issued by Bank Negara Malaysia.¹ Implementation is overseen by the ACSR and supported by PACE (Policy, Assumptions, Calculators and Education) until the Malaysian Accounting Standards Board takes over as domestic sustainability disclosure standards setter, expected in early 2027.¹

Who it binds

The framework applies to three market segments: Main Market listed issuers on Bursa Malaysia, ACE Market listed issuers on Bursa Malaysia, and non-listed companies (NLCos) meeting the prescribed revenue threshold.¹

Entities outside those segments may voluntarily adopt its requirements. The NSRF says entities in hard-to-abate sectors, and those covered under the Carbon Border Adjustment Mechanism sectors such as cement, metals (iron, steel and aluminium), chemicals, fertilisers, electricity, hydrogen and petroleum, are highly encouraged to report in accordance with it, and that regulators may subject other entities to the requirements under their own legislation or prescribe expectations in addition to the NSRF upon their regulatees.¹

Large NLCos whose holding company already reports using ISSB-aligned or equivalent standards such as the European Sustainability Reporting Standards may leverage on the holding company’s sustainability- and climate-related disclosures. Where the holding company reports using other international standards and frameworks, the NLCo may be given exemption from reporting for three reporting periods, subject to the policy decision of the Registrar — the Chief Executive Officer of the Companies Commission of Malaysia under subsection 20A(1) of the Companies Commission of Malaysia Act 2001 — and shall thereafter use the ISSB Standards for annual financial reporting periods beginning on or after 1 January 2030.¹

Dates

Use of the ISSB Standards is phased in by annual reporting period across three groups. Group 1, Main Market listed issuers above the market-capitalisation threshold below, reports for annual reporting periods beginning on or after 1 January 2025. Group 2, the remaining Main Market listed issuers, follows from 1 January 2026. Group 3, ACE Market listed issuers and Large NLCos, follows from 1 January 2027. The framework notes that annual reports issued for annual reporting periods beginning on 1 January 2025 are equivalent to annual reports issued for the financial year ending 31 December 2025.¹

The additional transition reliefs (ATR) commence from each entity’s first annual reporting period and run for two reporting periods for Groups 1 and 2 and three for Group 3, inclusive of the existing one-year transition relief under IFRS S1. ATR 1 permits disclosing information on only climate-related risks and opportunities in accordance with IFRS S2, applying IFRS S1 only insofar as it relates to those; ATR 2 permits focusing climate-related disclosures on principal business segments; ATR 3 permits not disclosing Scope 3 GHG emissions, except categories already required by an entity’s regulators.¹ At the end of the ATR 3 period, applicable entities are expected to apply IFRS S2 to disclose relevant Scope 3 GHG emissions in accordance with the Scope 3 categories described in the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.¹

Location and timing of reporting are left elsewhere: applicable entities shall adhere to their respective regulator’s requirements.¹

On 8 December 2025 the ACSR set out a phased and practical approach to reviewing disclosures: general non-compliance is addressed through engagement and corrective action, failure to take corrective action may result in the relevant authorities taking appropriate enforcement action, and enforcement action remains an essential safeguard for wilful or serious non-compliance such as fraudulent or misleading material disclosures.³

Thresholds

Two RM2 billion thresholds decide scope, measured differently.

For non-listed companies, the prescribed threshold is consolidated group revenue of RM2 billion and above for two consecutive financial years preceding the current financial year; where there is no requirement to prepare consolidated accounts, the RM2 billion threshold applies at company level.¹

For Group 1, the test is market capitalisation excluding treasury shares of RM2 billion and above as of 31 December 2024, or as at the date of its listing after 31 December 2024.¹

Verification standard

External assurance is currently voluntary under the NSRF. The stated aim is to mandate reasonable assurance on Scope 1 and Scope 2 GHG emissions for Group 1 from annual reporting periods beginning on or after 1 January 2027, Group 2 from 1 January 2028 and Group 3 from 1 January 2029, with that timeline subject to further consultations. Engagements are expected to be performed under the assurance standards adopted by the Malaysian Institute of Accountants; the assurance framework, including the providers, will be announced after further consultation.¹

The ACSR consulted on that proposed framework — covering adoption of international sustainability assurance standards, oversight of assurance providers, competency of assurance leaders and timelines for external assurance — from 25 June 2025 to 6 August 2025.⁴ No final assurance framework had been located from a Securities Commission Malaysia source by the retrieval date, so the accepted standard and the eligible providers remain to be announced.

What an organisation on ESGOS can do

• Find the organisation’s listing in the directory and claim it from its profile page, or get listed, so the record shows which NSRF group, if any, applies to it.
• Submit evidence: the sustainability statement prepared under IFRS S1 and IFRS S2, the transition reliefs relied on, and any assurance report obtained voluntarily.
• Where the organisation is in cement, iron, steel, aluminium, chemicals, fertilisers, electricity, hydrogen or petroleum, note the NSRF’s encouragement to report even without being scoped in.
• Find assurance and verification providers at /en/verifiers, which lists accredited verification bodies drawn from national accreditation registers; verifiers accredited for CBAM are not yet published by the Commission, so they are not in the directory. Check exposure at /en/exposure-check.

Footnotes

1. National Sustainability Reporting Framework, Securities Commission Malaysia (ACSR). ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴

2. National Sustainability Reporting Framework to Enhance Sustainability Disclosures (media release), Securities Commission Malaysia. ↩

3. ACSR Sets Out Approach for Non-compliance to Sustainability Reporting Requirements (media release), Securities Commission Malaysia. ↩

4. ACSR Invites Public Feedback on Proposed Framework on Sustainability Assurance (media release), Securities Commission Malaysia. ↩