Sustainability Reporting in Malaysia: Unlocking Profit in Planetary Action

Sustainability reporting is no longer just a buzzword for businesses; it has become a strategic imperative. With increasing environmental concerns, stricter regulations, and shifting consumer preferences, sustainability reporting is now a critical focal point for Malaysian businesses. But more than compliance, it’s also an opportunity for profit and innovation.

This blog sheds light on sustainability reporting in Malaysia, exploring its regulatory framework, economic opportunities, and actionable steps within various industries to unlock the immense potential of sustainability reporting.

What is Sustainability Reporting?

Sustainability reporting involves disclosing a company’s environmental, social, and governance (ESG) performance. It provides transparency on how a company manages its non-financial risks and impacts.

The most recognised frameworks include the Global Reporting Initiative (GRI) Standards, Task Force on Climate-Related Financial Disclosures (TCFD), and, recently, the International Sustainability Standards Board (ISSB) standards.

Malaysia has taken a significant step towards sustainability with the National Sustainability Reporting Framework (NSRF). This framework aims to ensure that corporate Malaysia delivers sustainability information that is consistent, comparable, and reliable. By doing so, it strengthens the nation’s competitiveness and appeal to investors.

This framework, coupled with Bursa Malaysia’s listing requirements and phased implementation of ISSB standards (2025–2026), underscores Malaysia’s commitment to aligning business practices with global sustainability trends.

A paradigm shift has begun in Malaysia, turning the climate crisis into an economic opportunity. The government is committed to achieving 70% renewable energy by 2050, reducing greenhouse gas emissions by 45% by 2030, and strengthening initiatives such as the MyHIJAU Program and Green Technology Financing.

Why ESG Reporting Matters

Sustainability reporting is crucial for companies seeking to align with Malaysia’s national goals and global climate commitments, such as the ASEAN 2025 sustainability framework and the COP agreements. However, more than just regulatory compliance, it positions companies to capitalize on opportunities in the emerging green economy.

Read more: ESG for SMEs: Tapping Opportunities and Building a Sustainable Future

Urgency of Climate Action for Environmental, Social, and Governance

The Global Perspective

The Intergovernmental Panel on Climate Change (IPCC) described the climate crisis as a “Code Red for humanity” in 2021, urging immediate action to mitigate catastrophic impacts.

Following discussions at COP26, there is heightened pressure for robust sustainability actions, and Malaysia is stepping forward as a regional leader, chairing ASEAN in 2025 with a sustainability-focused agenda.

The Challenges

Despite positive momentum, corporate sustainability reporting in Malaysia still faces inconsistent quality and a lack of accountability. To lead up to COP29 and maintain credibility as a sustainability-driven nation, Malaysia must address gaps between regulatory frameworks and actual implementation.

There is also an urgent need to build solid ESG accountability foundations.

Turning Challenges Into Green Economy Opportunities

Malaysia’s Green Economy

Malaysia’s emerging green economy brings tremendous opportunities across industries. Government-linked organisations, such as the Malaysian Green Technology and Climate Change Corporation (MGTC), are leading initiatives to promote sustainability.

Businesses are incentivised to adopt greener practices through these efforts. Programmes like Green Jobs Malaysia tackle climate challenges while also creating jobs in emerging green market niches.

Building Competitive Edge for Environmental Impact

Sustainability reporting provides businesses with both immediate and long-term competitive advantages.

• Enhanced Brand Equity: Transparent ESG practices improve a company’s reputation and credibility.
• Customer Loyalty: Consumers are increasingly prioritising brands that value sustainability.
• Access to Green Financing: Sustainability opens doors to financial support, such as Malaysia’s Green Technology Financing Scheme, which provides guarantees and funding to eligible businesses driving green initiatives.

Linking Reporting to Economic Incentives

Effective sustainability reporting can enhance the financial performance of Malaysian organisations.

Cost Savings Through Efficiency

Strategic reporting enhances resource optimisation, helping companies save on energy, water usage, and waste management. For instance, monitoring sustainable energy use can significantly lower operational costs, improving overall financial performance.

This transforms reporting into a driver for return on investment (ROI) in environmental practices.

Support for SMEs

Malaysia’s ecosystem heavily supports SMEs transitioning into sustainability-focused operations.

• MyHIJAU SME Development helps producers and marketers attain green procurement certifications to improve their marketability.
• Green Technology Financing Scheme (GTFS) offers attractive financing models with up to 80% government guarantees for waste management companies and access to a 1 billion RM fund extended until December 2025.

Real World Success Stories

Malaysian Innovation

Malaysian companies leveraging initiatives like the MyHIJAU Program have not only pioneered sustainability but also achieved cross-sector innovation.

By merging traditional knowledge with modern technology, businesses are unlocking unique differentiators in the market while aligning with both local and international consumer preferences for sustainable products.

Tapping New Market Opportunities

Adhering to the NSRF compliance guidelines provides businesses an edge. It fosters partnerships with like-minded companies, strengthens access to the rapidly expanding green financing options and taps into domestic and international consumer markets increasingly prioritising authenticity over greenwashing.

The Role of Emerging Technologies and Support

Data-Driven Solutions

Artificial intelligence (AI) and digital platforms are becoming game changers for sustainability practices. Technologies that track carbon emissions, renewable energy usage, and sustainable waste management are helping businesses produce accurate and actionable data for their ESG disclosures.

Support Organisations

Organisations like MGTC and other local consultancies are key enablers, offering resources on compliance with ISSB standards and guidance through Malaysia’s phased NSRF implementation timeline.

Whether assisting with ISSB alignment or bridging existing data gaps, these organisations provide solutions tailored to local dynamics and international frameworks.

Malaysia as a Green Leader

Malaysia is uniquely positioned to emerge as a green leader in ASEAN. Its NSRF initiative lays the groundwork for businesses to align with national renewable energy and GHG reduction targets while integrating climate-related financial disclosures and taking on a leadership role in regional sustainability initiatives.

Taking Action Today

Businesses in Malaysia can’t afford to wait when it comes to implementing sustainability reporting frameworks. Proactive companies willing to champion ESG principles will not only adhere to compliance but also solidify their market position through innovation, customer trust, and financial returns.

Where to Next for Climate Reporting in Malaysia

As international sustainability standards continue to evolve and advance, Malaysian enterprises must stay current with these changes to remain competitive and compliant. The implementation of the NSRF represents just the beginning of Malaysia’s journey toward a comprehensive sustainability reporting process.

The urgency of addressing climate crises and capitalising on Malaysia’s emerging green economy underscores the significance of robust sustainability reporting. The twin narrative of environmental conservation and corporate opportunity presents a compelling case for companies to embrace sustainability reporting.

It aligns them with Malaysia’s national sustainability goals and positions them favourably in a competitive market landscape that values transparency, innovation, and environmental stewardship.

It also supports their adoption of frameworks such as those from the International Integrated Reporting Council. This, in turn, prepares them for Malaysia’s leadership role in ASEAN sustainability initiatives.

As Malaysia works toward its renewable energy targets and greenhouse gas reduction goals, companies that proactively embrace sustainability reporting will be best positioned to capitalize on the opportunities presented by the nation’s green economic transformation.

For those seeking to delve deeper into sustainability reporting and align their operations with Malaysia’s evolving green economy, InCorp provides a suite of comprehensive sustainability reporting services tailored to Malaysian regulatory requirements.

About In.Corp Global Malaysia
In.Corp Global Malaysia, an Ascentium Company, is a trusted corporate service provider offering end-to-end business solutions, including company incorporation, compliance, accounting, taxation, and ESG advisory. With deep local expertise and a strong regional network, we help businesses navigate Malaysia’s evolving regulatory landscape. Contact us to learn more.