Malaysia ESG Reporting: Bursa IFRS S1 and S2 Transition Guide

Direct Answer: The Transition Has Three Starting Points

Malaysia ESG reporting Bursa IFRS sustainability requirements are moving from established Bursa reporting resources towards Sustainability Statements prepared using IFRS S1 and IFRS S2 as baseline standards under Malaysia’s national framework.

• Main Market Group 1: annual reports for financial years ending on or after 31 December 2025.
• Main Market Group 2: annual reports for financial years ending on or after 31 December 2026.
• ACE Market issuers: annual reports for financial years ending on or after 31 December 2027.

The most useful planning insight is also the easiest to miss: a transition year is not necessarily a publication year. An annual report published in 2027 may relate to a financial year that ended in 2026, so teams should build their timetable from the financial year-end trigger.

Training, familiar terminology and an existing sustainability report can help, but none of them proves that an issuer is ready. Readiness depends on applicable requirements, decision-useful disclosures, reliable data and evidence that can survive review.

The Bursa Malaysia Sustainability Reporting Guide Still Provides A Useful Foundation

Bursa identifies the third edition as the latest edition of its Guide. Together with its toolkits, Illustrative Sustainability Report and explainer videos, it provides practical support for Sustainability Statements prepared under Bursa’s Listing Requirements.

The resources explain the business case for embedding sustainability and help companies identify, prioritise and manage material sustainability matters. They also connect those matters with risks, opportunities, stakeholder needs and longer-term value.

For reporting teams, the resources can support four practical tasks:

• identifying and prioritising material sustainability matters;
• understanding connected business risks and opportunities;
• developing management processes, metrics and targets; and
• improving the quality and depth of disclosures.

The distinction between guidance and obligation matters. The Guide helps an issuer understand and implement reporting, but the applicable Listing Requirements and transitional provisions determine what must be reported.

Existing materiality work, governance arrangements, data ownership and reporting controls can therefore provide a foundation during the transition. They do not automatically establish IFRS readiness because the new baseline demands closer connections between sustainability information, enterprise prospects and financial reporting.

Malaysia IFRS S1 And IFRS S2 Requirements: What Changed

On 23 December 2024, Bursa announced amendments to its Main Market and ACE Market Listing Requirements to align listed-issuer reporting with the Malaysia National Sustainability Reporting Framework. IFRS S1 and IFRS S2 became the baseline standards for the phased transition.

IFRS S1 addresses general requirements for sustainability-related financial disclosures. IFRS S2 addresses climate-related disclosures. An in-scope issuer must prepare its Sustainability Statement in accordance with the IFRS Sustainability Disclosure Standards and include it in the annual report.

The practical direction is towards more structured disclosure of governance, strategy, risk-management processes, metrics and targets. It also requires better coordination between sustainability, finance, risk, operations, company-secretarial and reporting functions.

Reporting readiness is not a writing exercise; it is an ownership, data and decision-making exercise.

Adopting IFRS terminology, commissioning a gap report or attending a workshop does not guarantee readiness or compliance. An issuer still needs appropriate judgments, evidence, controls and disclosures for its own circumstances.

Malaysia Sustainability Reporting Timeline: 2025, 2026 And 2027

Consider a Group 2 issuer with a 30 June financial year end. Its first financial year ending on or after 31 December 2026 is 30 June 2027, even if internal preparation began much earlier and the annual report is published later in 2027.

This is why a generic “2026 deadline” can produce the wrong project schedule. The issuer must confirm its classification, exact financial year end and current transitional provisions before setting workstream dates.

Main Market Sustainability Reporting Requirements

Group 1 includes a Main Market issuer whose market capitalisation, excluding treasury shares, was at least RM2 billion on 31 December 2024. An issuer admitted after that date falls within Group 1 if its market capitalisation was at least RM2 billion upon admission.

Group 1 starts with annual reports for financial years ending on or after 31 December 2025. Other Main Market issuers form Group 2 and start with annual reports for financial years ending on or after 31 December 2026.

The IFRS baseline sits alongside retained Bursa disclosure features. These include three financial years of rolling metrics and targets, a prescribed data summary, and a statement indicating whether the Sustainability Statement underwent internal-audit review or independent assurance under recognised standards.

Teams should map the IFRS-aligned disclosures and retained Bursa elements into one reporting architecture. Treating them as unrelated reports can create duplicated data collection, inconsistent boundaries and late reconciliation problems.

Before relying on a date or relief, check the current Main Market Listing Requirements and Practice Note 9A. Classification and transitional wording should be confirmed from the operative text rather than a training slide or an earlier project plan.

ACE Market Sustainability Reporting Requirements

ACE Market listed corporations enter the IFRS-aligned phase for annual reports covering financial years ending on or after 31 December 2027. The later start provides preparation time, but it should not be treated as a reason to postpone foundational work.

A proportionate foundation can include:

• clear ownership for reporting decisions and annual-report delivery;
• identification of material sustainability-related and climate-related risks and opportunities;
• consistent data definitions, boundaries and evidence trails;
• capability to calculate and review emissions information; and
• documented review, challenge and escalation processes.

The stated three-full-financial-year relief period begins from the applicable effective date. It is not a blanket exemption from every sustainability reporting activity.

ACE Market issuers should verify the current ACE Market Listing Requirements, Guidance Note 11A and relevant Bursa FAQs before deciding which work can be deferred and which capabilities are already needed.

Malaysia Sustainability Reporting Transition Reliefs Are Not Full Exemptions

Bursa provides group-specific transition periods in addition to proportionality mechanisms within IFRS S1 and IFRS S2. The Main Market groups receive relief for two full financial years from their respective effective dates, while ACE Market issuers receive relief for three full financial years from their effective date.

Under the climate-first approach, an eligible entity may initially disclose only climate-related risks and opportunities under IFRS S2. IFRS S1 applies during that period to the extent relevant to those climate disclosures.

Transition arrangements also address comparative information, use of the Greenhouse Gas Protocol, Scope 3 emissions and the timing of non-climate disclosures. Deferred dates differ between issuer groups and should not be compressed into one universal deadline.

One important timing point is that the national framework does not adopt the IFRS first-year relief that would permit sustainability-related financial disclosures to be issued after the financial statements. Annual-report production planning therefore needs to account for sustainability information within the required reporting timetable.

A Focused Preparation Path Without Promises Of Readiness

The following sequence is a non-exhaustive preparation path, not a compliance checklist. It helps turn Malaysia ESG reporting Bursa IFRS sustainability developments into a manageable reporting project.

1. Confirm scope. Identify the issuer group, exact financial year end and applicable transition provisions.
2. Compare requirements. Map the existing Sustainability Statement process against IFRS S1, IFRS S2 and retained Bursa elements.
3. Assign accountability. Identify appropriate owners across the board, management, sustainability, finance, risk, operations, internal audit and company-secretarial functions.
4. Connect risks and decisions. Map material sustainability-related risks and opportunities to strategy, business decisions and relevant financial-reporting connections.
5. Define the data. Document every metric’s definition, boundary, methodology, owner, source system, evidence trail and review control.
6. Assess emissions capability. Review Scope 1 and Scope 2 processes and the eventual capability needed for Scope 3, including value-chain data limitations.
7. Plan reporting periods. Account for comparative information, rolling three-year data, the prescribed data summary and annual-report production timing.
8. Evaluate review options. Decide how internal-audit review and independent-assurance considerations will be assessed without assuming that one route is appropriate for every issuer.
9. Run a dry run. Test one material disclosure area and retain evidence of assumptions, gaps, review comments and corrective actions.

Intentional simplification: begin with a focused gap assessment rather than a broad transformation programme. Expand the work if the issuer’s structure, data gaps, reporting judgments or risk profile show that a wider programme is necessary.

A useful dry run follows information from source system to public disclosure. If the team cannot reproduce a number, explain its boundary or show who reviewed it, the gap is operational rather than editorial.

How To Evaluate Training, Workshops And Professional Learning In Malaysia

Official implementation support can help Malaysian issuers build capability. PACE provides policy guidance, emissions tools and capacity-building programmes supporting adoption of the national framework.

Its preparer training covers ISSB-based illustrative reports, emissions calculation and reporting, and climate-risk identification and scenario analysis. These are distinct learning needs, so a general ESG conference may not resolve a technical reporting gap.

Before registering for a Malaysia-wide workshop, reporting clinic, conference or green professional learning programme, assess:

• What it is: a policy briefing, technical workshop, reporting clinic or broader conference.
• When and where: the current date, delivery format and Malaysian location where applicable.
• Who should attend: directors, preparers, finance teams, sustainability teams, risk teams or internal auditors.
• Relevance: the issuer group, reporting year and specific disclosure gap addressed.
• What to expect: the agenda, learning outcomes, practical exercises and take-home materials.
• Registration: availability, fees, prerequisites and cancellation terms shown on the official page.
• Source status: the official programme page and the date on which its details were last checked.

Confirm schedules and registration details directly with the programme source. Participation should be evaluated against the attendee’s role and preparation stage, without reproducing promotional claims or treating attendance as evidence of reporting readiness.

Frequently Asked Questions

Does The Third-edition Guide Automatically Satisfy The New Baseline?

No. It remains useful for materiality, management and disclosure foundations, but the operative Listing Requirements and transitional provisions determine the required reporting basis. Existing work should be mapped rather than assumed to be sufficient.

Does “effective From 2026” Mean Every Report Published In 2026?

No. The trigger is the financial year end. Identify the first financial year ending on or after the date applicable to the issuer group, then work back through the reporting calendar.

Can An Issuer Postpone All Work During A Relief Period?

No. Reliefs defer or narrow specified requirements. Governance, data ownership, climate reporting, controls and annual-report planning may still require substantial work during the relief period.

Does A Workshop Or Gap Assessment Guarantee Readiness?

No. These activities can identify needs and build capability, but readiness depends on the issuer’s disclosures, judgments, data, evidence and controls.

Is Independent Assurance Always The Only Review Route?

The retained Bursa feature is a statement about whether the Sustainability Statement underwent internal-audit review or independent assurance under recognised standards. An issuer should evaluate the current requirements and its circumstances rather than assuming one route is universally required.

Verification Checklist And The Practical Regulatory Approach

In December 2025, the announced regulatory approach described initial reviews as phased and practical, with emphasis on capacity building, engagement and corrective action. That approach is not a safe harbour.

Failure to correct identified deficiencies may lead to enforcement action. Willful or serious breaches, including fraudulent or materially misleading disclosures or omissions, can also attract enforcement action.

Before finalising a reporting plan, verify:

• the current Main Market or ACE Market Listing Requirements;
• the applicable Practice Note 9A or Guidance Note 11A;
• current Bursa Assist FAQs and third-edition resources;
• current Securities Commission NSRF and PACE materials; and
• current IFRS Foundation materials when detailed interpretation of the standards is needed.

Bursa sustainability reporting requirements now combine a phased IFRS-aligned transition, continuing implementation resources, group-specific reliefs and issuer-level preparation work. The central task is to connect those components to one reporting calendar and one controlled information flow.

Neutral next step: identify the issuer’s applicable group and exact financial year end, then compare the latest official transitional provisions with its reporting calendar and present data capability. That single exercise turns Malaysia ESG reporting Bursa IFRS sustainability from a broad policy topic into a defined preparation problem.

This guide provides general educational information only. It is not legal, audit or compliance advice and does not guarantee readiness.

Last checked: 29 August 2026 MYT.

References

1. Bursa Assist — Latest information on Bursa Malaysia’s Sustainability Reporting Guide
2. Bursa Malaysia — Sustainability reporting using the IFRS Sustainability Disclosure Standards
3. Bursa Malaysia Main Market Practice Note 9A — Saving and transitional provisions
4. Bursa Assist — Applicability of the third-edition Guide and Toolkit to Main Market issuers
5. Bursa Assist — Applicability of third-edition resources to ACE Market issuers
6. Securities Commission Malaysia — NSRF Public Response Paper No. 1/2024
7. Securities Commission Malaysia — PACE implementation support
8. Securities Commission Malaysia — ACSR approach to non-compliance with sustainability reporting requirements