KUALA LUMPUR: Malaysia has unveiled a national framework to address investors and financiers' information needs and help with their capital allocation decisions.
The National Sustainability Reporting Framework (NSRF) will also help promote Malaysia's economic prosperity that is alligned with environmental and social responsibility, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
Amir Hamzah said global investors are showing a renewed interest in Malaysia's reform narrative.
This is reflected in the optimism of the domestic capital markets and exemplified by the FBM KLCI etching new highs, as well as Foreign Direct Investments committed by globalcompanies like Microsoft, Google, Byte Dance and Infineon Technologies.
"We have seen the transformation in how investors approach their portfolios. Historically, financial metrics were the sole metric of success, but that is no longer thecase today.
"This shift is not merely a trend but a reflection of a deeper understanding that long term value creation is intrinsically linked with sustainable and ethical practices," he said at the launch here today.
Amir Hamzah said NSRF has the support of government-linked investment companies (GLICs), which are prioritising investments that contribute to sustainability goals, and address critical issues such as climate action,social inequality and economic inclusivity.
This is reflected in their investment and engagement policy, as well as targets including net zero portfolios and net zero emissions for their own operations by 2050.
Developed by the Advisory Committee on Sustainability Reporting (ACSR), NSRF addresses the use of the IFRS sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB) as the baseline for companies in Malaysia.
Following the launch, Malaysia joins more than 20 jurisdictions, which have decided or are taking steps to use the standards.
Developed through extensive public consultations with various stakeholders, including local and foreign investors, various industry and professional associations, the NSRF meets the growing demand for sustainability information.
The Securities Commission chairman Datuk Mohammad Faiz Azmi said under NSRF, listed issuers on Bursa Malaysia's Main and ACE Markets, as well as large non-listed companies (NLCos) with annual revenue of RM2 billion and above will have to comply with the new reporting requirements in a phased approach.
Mohammad Faiz said of the large listed issuers on Bursa's Main Market, about 130 companies will have to comply with International Financial Reporting Standard S1 and S2 next year 2025, with a focus on climate-disclosures and the first report is due in 2026.
"You are the ones with significant impact to the capital markets and represent over 80 per cent of market capitalisation on Bursa Malaysia," he said.For the remaining listed issuers on the Main Market", Mohammad Faiz said.
Group 2 will use the standards starting 2026 while Group 3, which are the listed issuers on the ACE Market as well as large non-listed companies, in 2027.
"These companies will all start with a focus on climate disclosures, then cover other sustainability topics as per the standards later.
"You may be interested to know that we are using the transition reliefs provided by the ISSB in addition to mandating Scope 3 disclosures and audit verified reports, starting only in 2027, three years from now," he added.