Malaysia has long been recognied as a leader in sustainable development and transparency within the ASEAN region. With the advent of the International Sustainability Standards Board (ISSB), the country is positioning itself to implement global standards for sustainability disclosures effectively. This article explores Malaysia’s approach to the ISSB standards, supported by international research insights, and highlights the key developments in this rapidly evolving landscape.
The ISSB, established by the IFRS Foundation in November 2021, aims to develop a comprehensive global baseline for sustainability disclosure standards. These standards seek to provide investors and other capital market participants with consistent, comparable, and reliable sustainability-related financial information.
Both standards emphasie alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and address the growing demand for enhanced transparency on environmental, social, and governance (ESG) issues.
Malaysia’s commitment to sustainability and climate action has positioned it as an early adopter of global reporting frameworks. In 2021, the Malaysian government introduced mandatory sustainability reporting requirements for publicly listed companies under Bursa Malaysia’s Sustainability Reporting Framework, which aligns closely with TCFD principles.
The Securities Commission Malaysia (SC) oversees these requirements, ensuring alignment with international standards. As the ISSB standards gain traction, Malaysia is actively considering their integration into the existing regulatory framework.
Research from global institutions provides valuable context for Malaysia’s efforts:
Malaysia’s proactive approach is supported by key data points:
A 2024 survey by PwC Malaysia found that 68% of publicly listed companies have begun aligning their reporting with ISSB standards.
The Securities Commission Malaysia reported that 74% of institutional investors view enhanced ESG reporting as a critical factor in decision-making.
ESG-focused investment flows in Malaysia increased by 12% in 2023, reflecting growing market demand.
Malaysia’s approach to implementing ISSB standards reflects its commitment to global best practices in sustainability reporting. Through stakeholder engagement, capacity building, and alignment with international frameworks, the country is poised to set a benchmark for other jurisdictions in the region.
By addressing challenges and leveraging opportunities, Malaysia can further enhance its leadership in sustainable finance, contributing to a more transparent and resilient global economy.
