ESG Reporting in Malaysia 2026: The Only Guide You'll Need
From 1 January 2026, every remaining Main Market-listed issuer on Bursa Malaysia must begin climate-first sustainability reporting under the National Sustainability Reporting Framework. The NSRF, launched by the Securities Commission Malaysia in September 2024, mandates IFRS S1 and S2 as baseline disclosure standards across all listed issuers and large non-listed companies. For the approximately 130 large-cap issuers above RM2 billion in market capitalisation, ESG reporting in Malaysia under these standards is already live. For the rest of the Main Market, 2026 is the compliance start line. This guide maps the full regulatory architecture: what the NSRF requires, which ESG reporting requirements Malaysia-listed companies face at each phase, the Scope 3 and assurance timelines, SME disclosure obligations, and the carbon tax convergence ahead.
What is the NSRF, and why does it matter for mandatory ESG reporting in Malaysia?
The NSRF is the national regulatory backbone for sustainability disclosure in Malaysia. It applies to all Bursa-listed issuers and, for the first time, to large non-listed companies.
Regulatory origin
The Securities Commission Malaysia launched the NSRF on 24 September 2024, developed jointly with Bank Negara Malaysia, Bursa Malaysia, and the Audit Oversight Board. It positions Malaysia as the first ASEAN economy to mandate ISSB-aligned sustainability disclosures at a national level.
What it mandates
IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) form the baseline standards. Every entity in scope must report on governance, strategy, risk management, and metrics and targets. The NSRF adopts a climate-first approach during the transition period: issuers may begin with climate-related disclosures before expanding to broader sustainability topics.
The 2026 trigger
Mandatory ESG reporting in Malaysia reaches its broadest listed-company cohort in 2026. All Main Market issuers below RM2 billion in market capitalisation must begin climate-first reporting for annual periods starting on or after 1 January 2026. By company count, this is the largest group affected. The operational implication is clear: if your organisation has not started building IFRS S2-aligned data collection processes, the runway is measured in months.
ESG reporting requirements Malaysia: the phased compliance timeline
The NSRF rolls out in three phases. Each phase defines when a cohort begins climate-first reporting, when full IFRS S1 and S2 compliance is required, and when Scope 3 and assurance obligations activate.
Phase 1: 2025
Main Market listed issuers with a market capitalisation of RM2 billion and above. This cohort, approximately 130 companies representing over 80% of Bursa Malaysia's total market capitalisation, began climate-first reporting for annual periods starting 1 January 2025. Full IFRS S1 and S2 compliance is required from 1 January 2027.
Phase 2: 2026
All other Main Market listed issuers. ESG reporting in Malaysia for this cohort begins with climate-first disclosures for annual periods starting 1 January 2026. Full compliance with IFRS S1 and S2 is required from 1 January 2028. This phase brings the majority of listed companies into scope by headcount.
Phase 3: 2027
ACE Market listed corporations and large non-listed companies with revenue of RM2 billion and above. Climate-first reporting begins 1 January 2027. Full compliance is required from 1 January 2030.
Transition reliefs
Main Market issuers receive 2 full financial years of transition relief. ACE Market issuers and large non-listed companies receive 3 years. During the transition, issuers may focus on climate-related disclosures under IFRS S2 before addressing the full scope of IFRS S1.
ISSB adoption in practice
ESG reporting on Bursa Malaysia now means ISSB-aligned reporting. The 4th Edition Sustainability Reporting Guide, amended in December 2024, integrates IFRS S1 and S2 into the listing requirements. ISSB in Malaysia is the regulatory standard.
What does the Bursa Malaysia sustainability reporting guide require?
The Bursa Malaysia sustainability reporting guide, now in its 4th edition, defines the content and structure of the Sustainability Statement that every listed issuer must include in its annual report.
Sustainability statement scope
The statement must cover governance structures for sustainability oversight, the issuer's strategy for managing sustainability-related risks and opportunities, the risk management processes applied to sustainability matters, and the metrics and targets used to measure performance.
Prescribed performance data table
A minimum of three years of ESG performance data is required. The prescribed indicators include Scope 1 and Scope 2 greenhouse gas emissions, energy consumption, water usage, waste management data, anti-corruption measures, and workforce diversity metrics. Bursa specifies the measurement methodologies for each indicator.
Materiality assessment
The guide requires every issuer to conduct and document a materiality assessment aligned with the principles of IFRS S1. This means identifying sustainability-related risks and opportunities that could reasonably affect the entity's cash flows, access to finance, or cost of capital. The assessment must be reviewed and updated periodically.
ESG Reporting Platform on Bursa LINK
All ESG disclosure in Malaysia must be submitted through the ESG Reporting Platform on Bursa LINK. The platform enables structured, comparable, machine-readable disclosures. It is designed to reduce inconsistency across issuers and give investors a standardised data layer for benchmarking.
Scope 3 emissions and assurance: what comes after 2026?
For most Malaysian listed companies, ESG reporting in Malaysia in 2026 marks the beginning of climate-first reporting. The years that follow layer on progressively more demanding obligations: full Scope 3 disclosure and external assurance.
Scope 3 timeline by cohort
Main Market above RM2bn: limited Scope 3 from January 2025, full Scope 3 GHG emissions from January 2028
Main Market below RM2bn: limited Scope 3 from January 2026, full Scope 3 GHG emissions from January 2029
ACE Market and large non-listed companies: limited Scope 3 from January 2027, full Scope 3 GHG emissions from January 2030
"Limited Scope 3" covers the categories most material to the issuer's operations. "Full Scope 3" means disclosure across all 15 GHG Protocol categories with quantified data.
Assurance roadmap
Reasonable assurance on Scope 1 and Scope 2 GHG emissions follows a parallel phased schedule:
Main Market above RM2bn: from January 2027
Main Market below RM2bn: from January 2028
ACE Market and large non-listed companies: from January 2029
Scope 3 assurance will follow in later phases.
The operational gap
Many mid-cap Malaysian issuers lack the supplier-level emissions data needed for Scope 3 reporting. Building reliable data pipelines from tier-one and tier-two suppliers is a 12-month lead-time activity. Companies entering Phase 2 in 2026 should already be mapping their value chain emission sources if they intend to meet the 2029 full Scope 3 deadline without data quality issues.
ESG reporting for SMEs: the SEDG framework
ESG reporting in Malaysia does not stop at listed companies. As PLCs cascade ESG disclosure requirements to their suppliers, small and medium enterprises face a new reporting reality.
What is SEDG
Capital Markets Malaysia launched the Simplified ESG Disclosure Guide, known as SEDG, making Malaysia the first country globally to offer SMEs a standardised, structured ESG disclosure framework. SEDG is designed for companies that fall outside Bursa's listing requirements but sit within the supply chain sustainability perimeter of listed issuers.
Structure
SEDG Version 1 contains 35 priority disclosures organised into three tiers: Basic, Intermediate, and Advanced. The disclosures are aligned with Bursa Malaysia's sustainability indicators, GRI Standards, ISSB Standards, and the GHG Protocol. An SME can start at the Basic tier and progress as its data maturity improves.
Version 2 and ASEAN alignment
SEDG Version 2 adds 3 additional disclosures and aligns with the ASEAN Simplified ESG Disclosure Guide, launched in April 2025. This ASEAN-level harmonisation means a Malaysian SME reporting under SEDG can satisfy regional supply chain disclosure requests without producing separate reports for different markets.
Why this matters for listed companies
Any ESG report in Malaysia is only as reliable as the data behind it. PLCs reporting limited or full Scope 3 emissions need emissions data from their suppliers. SEDG readiness in the supply chain directly affects a listed company's own data quality, assurance readiness, and ultimately its Bursa LINK submission. Engaging suppliers on SEDG adoption is not a CSR exercise. It is a data governance requirement.
Malaysia's carbon tax and the compliance convergence
The NSRF is not the only regulatory force reshaping ESG reporting in Malaysia in 2026. A carbon tax is expected to come into effect in the same year.
Carbon tax timing
Malaysia's carbon tax is expected to take effect in 2026, beginning with the iron, steel, and energy sectors. Estimates range from RM15 to RM50 per tonne of CO2 equivalent, though the final rate remains under consultation.
CBAM alignment
The sectors under Malaysia's proposed carbon tax overlap with the European Union's Carbon Border Adjustment Mechanism: iron, steel, aluminium, cement, fertilisers, and energy. Malaysian exporters in these sectors face dual compliance pressure: domestic carbon tax obligations and CBAM reporting for EU-bound goods.
The convergence point
For Bursa-listed companies that also export to the EU, three disclosure regimes now overlap: NSRF sustainability reporting, domestic carbon tax compliance, and CBAM-aligned emissions data. Integrated emissions data, calculated once and reported across all three frameworks, becomes a practical necessity.
Key Takeaway
The 2026 compliance window is a preparation period, not a finish line. By 2028, every Main Market issuer will need full IFRS S1 and S2 compliance with auditable Scope 3 data. With the carbon tax, CBAM, and NSRF converging in the same regulatory cycle, Malaysian companies that build integrated emissions data infrastructure now will carry a structural advantage in both compliance cost and financing terms.
Schedule a demo with Oren to see how the platform automates NSRF-aligned ESG reporting across your organisation and supply chain.
Frequently Asked Questions (FAQs)
Q1. What is the NSRF in Malaysia?
The National Sustainability Reporting Framework is Malaysia's regulatory framework for sustainability disclosure. Launched by the Securities Commission Malaysia on 24 September 2024, the NSRF mandates IFRS S1 and S2 as baseline standards for all Bursa-listed issuers and large non-listed companies with revenue of RM2 billion and above.
Q2. When does mandatory ESG reporting start in Malaysia?
Mandatory ESG reporting in Malaysia began in 2025 for Main Market listed issuers above RM2 billion in market capitalisation. All other Main Market issuers follow from 1 January 2026. ACE Market listed corporations and large non-listed companies begin from 1 January 2027. Each cohort starts with climate-first reporting under IFRS S2 before expanding to full IFRS S1 compliance.
Q3. What standards does Bursa Malaysia require for ESG reporting?
Bursa Malaysia requires all listed issuers to report in accordance with IFRS S1 and IFRS S2, the ISSB's sustainability disclosure standards. The 4th Edition Sustainability Reporting Guide, amended in December 2024, formally integrates these standards into the Main Market and ACE Market listing requirements. ISSB compliance in Malaysia is a regulatory obligation, not a voluntary benchmark.
Q4. Do non-listed companies in Malaysia need to report on ESG?
Yes. Under the NSRF, large non-listed companies with annual revenue of RM2 billion and above are required to begin climate-first sustainability reporting from 1 January 2027, with full IFRS S1 and S2 compliance by 1 January 2030. SMEs below this threshold are not mandated to report but face growing pressure from listed-company supply chains through the SEDG framework.
Q5. What is the SEDG for Malaysian SMEs?
The Simplified ESG Disclosure Guide is a standardised disclosure framework for SMEs launched by Capital Markets Malaysia. SEDG Version 1 contains 35 priority disclosures across Basic, Intermediate, and Advanced tiers, aligned with Bursa Malaysia indicators, GRI, ISSB, and the GHG Protocol. Version 2 adds 3 disclosures and aligns with the ASEAN Simplified ESG Disclosure Guide.
Q6. When must Malaysian companies disclose Scope 3 emissions?
Limited Scope 3 disclosure begins in 2025 for Main Market issuers above RM2 billion, in 2026 for the remaining Main Market issuers, and in 2027 for ACE Market and large non-listed companies. Full Scope 3 disclosure across all 15 GHG Protocol categories is required from 2028, 2029, and 2030 respectively. The phased approach gives each cohort three years to build supplier-level emissions data.
Q7. Is external assurance required for ESG reports in Malaysia?
Yes. Reasonable assurance on Scope 1 and Scope 2 emissions is required from January 2027 for Main Market issuers above RM2 billion, from January 2028 for remaining Main Market issuers, and from January 2029 for ACE Market and large non-listed companies. Scope 3 assurance follows in later phases.
