PETALING JAYA: The Advisory Committee on Sustainability Reporting (ACSR), chaired by the Securities Commission (SC), has announced its approach to addressing non-compliance with regulatory sustainability reporting requirements developed in alignment with the National Sustainability Reporting Framework (NSRF).
The SC, together with Bank Negara Malaysia, Bursa Malaysia, the Companies Commission of Malaysia and the Audit Oversight Board, will focus on a phased and practical approach in reviewing disclosures.
“This is in acknowledgement of the period of transition for reporting entities to adopt the IFRS Sustainability Disclosure Standards (set by the International Sustainability Standards Board),” said the SC in a statement.
Launched in September last year, the NSRF marks a significant step forward in advancing Malaysia’s corporate sustainability agenda.
It is applicable for listed issuers on Bursa Malaysia’s Main and ACE Markets, as well as large non-listed companies with annual revenue of RM2bil and above.
SC chairman Datuk Mohammad Faiz Azmi said: “We recognise the challenges companies face in meeting the new sustainability reporting standards due to, among others, a lack of resources, the quality of external data or the difficulty in obtaining necessary expertise.
“Our approach is to balance the need for compliance with the varied levels of readiness across reporting entities.”
As such, the SC said emphasis will be made on capacity building and skills enhancement during the review process to ensure reasonable and meaningful progress by reporting entities in disclosing consistent, comparable and reliable sustainable information.
“In the case of non-compliance generally, this may be addressed through active engagement and corrective action, among others,” added the SC.
“However, reporting entities’ failure to take corrective action to address the deficiencies may result in the relevant authorities taking appropriate enforcement action.”
In instances of wilful or serious non-compliance/breaches, such as fraudulent and/or misleading material disclosures/omissions, the SC said enforcement action remains an essential safeguard to uphold standards and protect public interest.
