ACSR outlines approach to non-compliance in sustainability reporting in Malaysia

The committee said it will adopt a "phased and practical approach" in reviewing sustainability disclosures to address non-compliance with reporting requirements under the National Sustainability Reporting Framework.

The Advisory Committee on Sustainability Reporting (ACSR), chaired by the Securities Commission Malaysia (SC), has outlined how it will address non-compliance with sustainability reporting requirements under the National Sustainability Reporting Framework (NSRF).

The SC, Bank Negara Malaysia, Bursa Malaysia, the Companies Commission of Malaysia, and the Audit Oversight Board will adopt a phased and practical review of disclosures, reflecting the transition period for companies adapting to the IFRS® Sustainability Disclosure Standards (ISSB Standards).

Introduced in September last year, the NSRF addresses the use of the ISSB Standards issued by the International Sustainability Standards Board (ISSB) as the baseline for companies in Malaysia. It applies to listed issuers on Bursa Malaysia’s Main and ACE Markets, as well as large non-listed companies with annual revenue of RM2bn and above.

Dato’ Mohammad Faiz Azmi, Chairman, SC, acknowledged that companies may face challenges in meeting the new standards, including limited resources, the quality of external data, and the difficulty to obtain necessary expertise.

"Our approach is to balance the need for compliance with the varied levels of readiness across reporting entities," he added. 

The review process will therefore emphasise capacity building and skills development to ensure reasonable and meaningful progress by reporting entities in disclosing consistent, comparable and reliable sustainable information.

The ACSR said non-compliance will generally be addressed through engagement and corrective actions. It also stressed that entities that fail to remediate identified issues may face enforcement measures, while cases involving willful or serious breaches — such as fraudulent or misleading disclosures — will be subject to stronger regulatory action to protect public interest.

For more information or inquiries, please contact the ACSR Secretariat at nsrf@seccom.com.my.