Environmental, Social and Governance (ESG):Recent Updates In Malaysia
Launching Of Simplified ESG Disclosure Guide (SEDG) For Small & Medium Enterprises (SMEs)
In October 2023, Capital Markets Malaysia (CMM), an affiliate of the Securities Commission (SC) launched the SEDG for SMEs. The design of the SEDG involved extensive benchmarking exercises against various other global and local standards and frameworks including the Global Reporting Initiative, International Finance Reporting Standard by the International Sustainability Standards Board and Bursa Malaysia’s Listing Requirements Sustainability Reporting Guide.
The objectives of the SEDG are to:
(a)Provide SMEs (as data prepares) with a simple and standard set of ESG disclosures to track and report.
(b)Provide stakeholders (as the data requesters) with a simple and standard set of ESG disclosures to ask for.
(c)Provide standard-setters with a simple and standard set of ESG disclosures to support their policies.
In essence, the SEDG covers indicators that can be tracked and disclosed to measure a SME’s ESG progress. It comprises of 35 priority disclosures which are further categorised into Basic, Intermediate and Advanced to cater to the different levels of sustainability maturity of each SME. These disclosures are applicable across all industries and SMEs are encouraged to determine the materiality of these disclosures relevant to their companies. It is worth noting however that there is no mandatory adoption timeline for the disclosures.
In order to encourage adoption of the SEDG, CMM also launched an early adopter programme which invites selected supply chain stakeholders to support the adoption of the SEDG. The early adopters include Nestle Malaysia, Volvo Trucks Malaysia, Maybank, CIMB Bank, Hong Leong Bank, UOB Bank and as well as various trade associations and chambers of commerce. The parties to the early adopter programme benefit from access to nationwide in-person training and workshops.
The SEDG can be accessed on CMM’s website as follows: https://sedg.capitalmarketsmalaysia.com/
Launching Of ESG Reporting Platform
Further to the introduction of the enhanced sustainability reporting requirements for listed issuers (Enhanced Requirements) in September 2022 and the recent introduction of the Illustrative Sustainabiltiy Report in September 2023, on 4 December 2023, Bursa Malaysia Securities Berhad launched the Bursa Malaysia ESG Reporting Platform[1].
The purpose of the ESG Reporting Platform is to act as a repository for disclosures conforming to the prescribed format mandated under the Enhanced Requirements. This ESG Reporting Platform is accessible via the Bursa Malaysia Listing Information Network System or better known as “Bursa Link”. Listed issuers have to access the platform to generate a summary performance table which must then be disclosed in their respective Sustainability Statements. It is noteworthy that the generation of the performance table is without additional cost to listed issuers.
To aid listed companies in navigating the available functionalities of the ESG Reporting Platform, user guides and videos were also concurrently issued by Bursa Malaysia.
Listed companies can refer to the following links for the Enhanced Requirements as well as the resources launched by Bursa Malaysia in complaying with their sustainability reporting obligations:
(a) Amendments to the Main Market Listing Requirements
(b)Amendments to the ACE Market Listing Requirements
(c)Bursa Malaysia’s Sustainability Reporting Guide and Toolkits (3rd Edition)
(d)Bursa Malaysia’s Illustrative Sustainability Reporting Guide
[1] https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-to-launch-platform-for-mandatory-esg-reporting
26 December 2023