MALAYSIA Trends and Developments Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
The Malaysian Code on Corporate Governance (MCCG) underwent substantial revision in 2021 and remained the framework for companies in Malaysia to adopt internationally recognised practices. After the revision to the MCCG, the corporate governance landscape in Malaysia saw rapid growth, with the implementation of various other frameworks aimed at enhancing the attractiveness of Malaysia to foreign inves - tors. National Sustainability Reporting Framework (NSRF) Introduced jointly by the Ministry of Finance and the Securities Commission (SC) on 24 Sep - tember 2024, the NSRF laid down a disclosure framework in line with the International Financial Reporting Standards (IFRS) Sustainability Dis - closure Standards issued by the International Sustainability Standards Board. The NSRF adopted the General Requirements for Disclosure of Sustainability-related Finan - cial Information ( “IFRS S1” ) and Climate-related Disclosures ( “IFRS S2” ) (collectively, the “IFRS Standards” ). The NSRF is set to be implemented in phases from 2025 to 2030. Starting on 1 Janu - ary 2025, the authors see the framework being implemented for entities listed on the main mar - ket of Bursa Malaysia Securities Berhad ( “Bursa Malaysia” ) with a market capitalisation of RM2.0 billion and above, while other main market-listed issuers will commence using the IFRS Standards in 2026. ACE market-listed issuers, as well as non-listed companies (NLCos), with annual rev - enue of RM2.0 billion and above will commence using the IFRS Standards in 2027. On 23 December 2024, Bursa Malaysia intro - duced amendments to the main market listing requirements (MMLR) and the ACE market listing requirements (AMLR) to align the sustainability
reporting requirements under the MMLR and AMRL with the NSRF. The amendments adopted IFRS S1 and IFRS S2 and the publication of a sustainability statement in the annual report. Amendments including the Sustainability Report - ing Guide issued by Bursa Malaysia in 2022 also required the listed issuers to: • make a statement regarding whether the sustainability statement had been reviewed by an internal auditor or whether independent assurance had been performed in accord - ance with recognised assurance standards, such as IFRS S1 and IFRS S2; • specify a reporting metric to indicate the listed issuer’s performance and progress relating to its sustainability-related risks and opportunities in the last three financial years on a rolling basis, together with a summary of such data in a prescribed format; • adopt, for issuers listed on the main mar - ket with a market capitalisation of less than RM2.0 billion, the IFRS Standards for annual reporting from 1 January 2025 onwards (from 1 January 2026 onwards for the remaining main market-listed issuers); and • adopt, for issuers listed on the ACE market, the IFRS Standards for annual reporting from 1 January 2027 onwards. However, full implementation of the NSRF will require amendments to relevant legislation, including inter alia the Financial Reporting Act 1997, Companies Act 2016, Capital Market and Services Act 2007 and other laws and regula - tions. Policy, Assumptions, Calculators and Education (PACE) Initiative To support companies in adopting the NSRF, the Advisory Committee on Sustainability Report -
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