Under the National Sustainability Reporting Framework (NSRF), large non-listed companies with annual revenue of RM2bil and above are required to publish sustainability reports aligned with the International Sustainability Standards Board’s IFRS S1 and IFRS S2.
And now, the Companies Commission of Malaysia (SSM) is inviting feedback on proposed amendments to the Companies Act 2016, aimed at mandating sustainability disclosures for non-listed companies with revenue exceeding RM15mil.
The consultative document dated April 30 sets out the proposed policies and guiding principles on empowering the registrar to determine the sustainability requirements based on a “comply or explain” approach, and introducing a sustainability reporting framework which consists of thresholds, reporting contents, implementation timeline and assurance framework.
They also seek to strengthen directors’ accountability for sustainability and non-financial information disclosures, as well as to enhance the Companies Act to incorporate provisions relating to sustainability and assurance providers.
According to the document, SSM is proposing a phased implementation timeline for sustainability reporting starting from 2028 based on revenue and employee thresholds.
Non-listed companies with annual revenue below RM15mil or fewer than 100 employees are not subject to sustainability reporting requirements. However, they can opt in voluntarily.
For phase 1, mandatory climate disclosures cover Scope 1 and Scope 2 greenhouse gas emissions data.
Phase 2 entails mandatory simplified sustainability disclosures on governance and oversight of sustainability matters, identification of material sustainability risks and opportunities, and selected ESG indicators.
Phase 3 will see non-listed companies adopting IFRS S2 Climate-related Financial Disclosures, with transition reliefs.
SSM also proposes a phased assurance timeline and invites stakeholders to comment on the disclosure topics that should be assured.
Other proposed amendments include penalties for non-compliance against sustainability and non-financial information disclosures, as well as the minimum qualification requirements for sustainability assurance providers.
Comments can be submitted to SSM by June 2.
