KUALA LUMPUR: The Securities Commission Malaysia (SC) and the World Bank have jointly launched a groundbreaking report, titled “ESG Disclosure Assessment of Malaysia’s Listed Companies and Recommendations for Policy Development,” at the SC-World Bank Conference 2024. This assessment provides a detailed look into Malaysia’s environmental, social, and governance (ESG) reporting landscape and lays the groundwork for policy improvement to align with international standards.
Key Findings from the Report
The report evaluates the current state of ESG disclosures among 90 companies listed on Bursa Malaysia, along with practices by several major institutional investors. As Malaysia’s economy embraces sustainability trends, the report sheds light on the progress and gaps in corporate ESG practices.
- Larger Firms Lead the Way
Companies with higher market capitalisation displayed stronger ESG disclosure efforts compared to smaller entities, indicating that size plays a role in reporting quality. - Regulatory Compliance as a Key Driver
Many companies cited compliance with regulatory requirements as their primary motivation for ESG disclosures, demonstrating the importance of clear guidelines and mandates in the industry. - Limited ESG Transparency Among Institutional Investors
While some of Malaysia’s largest asset owners have initiated ESG efforts internally, these developments are not fully reflected in their public disclosures. This signals a need for greater transparency to align investors’ practices with public expectations. - Gaps in Environmental Metrics
Despite progress in governance and social reporting, companies fell short in areas such as climate change and biodiversity—topics increasingly scrutinized by global stakeholders.
Policy Recommendations
The report outlines several strategies to boost Malaysia’s ESG framework, especially following the launch of the National Sustainability Reporting Framework (NSRF). Key recommendations include:
- Encouraging Adoption of Bursa Malaysia’s Guidelines: The report urges broader implementation of sustainability reporting frameworks to enhance corporate compliance.
- Strengthening Domestic Investor Practices: To attract greater interest in ESG disclosures, domestic investors need support to develop more comprehensive sustainability initiatives.
- Continuous Monitoring and Consultation: Ongoing stakeholder engagement and monitoring will ensure the proper implementation and refinement of ESG practices over time.
Conference Highlights
The SC-World Bank Conference, now in its fifth year, focused on synergizing efforts between the conventional and Islamic capital markets to support small and medium enterprises (MSMEs) and mid-tier companies (MTCs). Deputy Minister of Investment, Trade, and Industry, YB Liew Chin Tong, officiated the event, underscoring the government’s commitment to sustainability.
Speaking on the report’s significance, SC Executive Director of Islamic Capital Market Sharifatul Hanizah Said Ali stressed that “improved ESG disclosure practices will not only build investor confidence but also ensure Malaysia’s competitiveness in global markets.”
The conference also spotlighted initiatives under the SC’s five-year roadmap (2024–2028) aimed at bridging financing gaps for MSMEs and MTCs, paving the way for a resilient, sustainable financial ecosystem.
World Bank Country Director for the Philippines, Malaysia, and Brunei Darussalam, Dr. Zafer Mustafaoğlu, highlighted the importance of collaboration, stating, “By leveraging the World Bank’s expertise, we aim to support effective policy design to address MSME and climate financing gaps.”
The Way Forward
The ESG Disclosure Assessment report is a timely initiative, providing a much-needed baseline for Malaysia’s corporate sector. With over 200 industry stakeholders attending the conference—including entrepreneurs, government agencies, financial institutions, and private equity firms—the momentum toward improved sustainability practices is clear.
For Malaysia to remain relevant in the evolving global market, companies and investors alike must embrace the recommendations outlined in the report. The road ahead requires commitment, collaboration, and proactive implementation, ensuring that ESG principles become integral to the nation’s economic growth.
