Public consultation on sustainability disclosure standards starts next month

PETALING JAYA: The Advisory Committee on Sustainability Reporting (ACSR) will conduct an online public consultation starting next month on the use of the sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB) in Malaysia.

The ACSR, chaired by the Securities Commission Malaysia (SC) and formed with the endorsement of the Ministry of Finance, comprises representatives from Bank Negara Malaysia, Bursa Malaysia Bhd, Companies Commission of Malaysia, Audit Oversight Board and Financial Reporting Foundation.

The ISSB developed its first two standards after extensive feedback and calls from the Group of 20 major economies, the Financial Stability Standards Boards, the International Organisation of Securities Commissions (Iosco) and the business and investor communities for a common standard to disclose sustainability information, including climate-related risks and opportunities.

The first two standards are IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures).

At the recent 28th UN Climate Change Conference (COP28), investors with more than US$120 trillion of assets under management voiced their support for the use of the ISSB Standards

SC chairman Datuk Seri Dr Awang Adek Hussin said, “The financial sector, particularly the capital market, must continue to facilitate financing and investments in support of the government’s key initiatives to address sustainability-related issues including the impact of climate change on the economy.”

The IFRS Trustees Foundation announced the formation of the ISSB at the 2021 UN COP26. The ISSB was established to develop a comprehensive global baseline for sustainability reporting that would meet the needs of investors and the financial markets.

“To facilitate fundraising, the availability of reliable and comparable disclosure that is based on international standards is important. Equally important will be the exercise of proportionality in the use of these standards and for interoperability between global and domestic frameworks, to ease some of the challenges companies may face as they transition to the new standards,” said Awang Adek.

The online public consultation is scheduled for six weeks. The public can provide views and feedback on critical considerations including implementation approach, timing and assurance of sustainability disclosures in Malaysia.

ACSR chairman and SC managing director Datuk Kamarudin Hashim said, “While the immediate consideration is for the ISSB Standards to be applicable to listed issuers, we are cognisant that there is also demand for sustainability-related action and information on non-listed issuers.”

As such, he added, they strongly encourage all stakeholders, including preparers, investors, sustainability assurance providers, rating agencies and others to share their views, as this will help shape the national sustainability reporting framework.