Bursa Malaysia: Enhanced sustainability disclosure requirements

In September 2022, Bursa Malaysia announced a phased approach in implementing the enhanced sustainability reporting requirements for public-listed companies (PLCs) commencing in financial year end (FYE) 2023.

Bursa’s enhanced disclosure requirements are aimed at steering Malaysian PLCs to adopt and communicate sustainability practices which can strengthen organizational resilience and competitiveness in attracting more capital to support the transition towards net-zero. More importantly, Bursa Malaysia’s phased approach for PLCs to implement the enhanced disclosure requirements will drive PLCs to improve their sustainability reporting journey.

The key enhanced areas are to:

• Disclose common sustainability matters by 2023
• Align with climate change-related disclosures as recommended by the Task Force on Climate-related Financial Disclosures (TCFD) in a dedicated section within the Sustainability Statement. Disclose the transition plan towards a low-carbon economy (applicable to ACE market PLCs)
• Provide data from the last three financial years for each reported sustainability indicator and its performance targets (where available) including a summary in a prescribed format
• Consider sector-specific indicators pertaining to sustainability matters deemed material to the organization
• Provide a “Statement of Assurance” on whether the Sustainability Statement has been subjected to an internal review by an internal auditor or an independent assurance has been performed in accordance with recognized assurance standards

With the imminent implementation of the enhanced sustainability disclosures, it is imperative for PLCs to prepare the relevant next steps including the conduct of materiality assessment, the selection of appropriate sustainability indicators, the compilation of relevant data on sustainability matters and indicators, the setting of meaningful and measurable targets and enhancing the credibility of disclosed sustainability information. In addition, internal stakeholders need to be upskilled on ESG via capability development programs as part of embedding sustainability within the organization.