Malaysia to Follow the Global Standard of Sustainability Reporting

Since 2016, all of the public listed companies in Malaysia have to perform sustainability reporting according to the law. However, there is still a lot of room for improvement in this area as many organizations are not paying attention to the quality of reporting.

A major concern about sustainability reporting is that a lot of companies can’t enhance the quality due to a lack of formal standards. Furthermore, companies have to evaluate various aspects like management areas and compliance to ensure the implementation of the best sustainability reporting standards.

As a common solution to these issues, Malaysia has started to follow the global standards of sustainability reporting to ensure the effectiveness of sustainability regulations and reports, leading to better transparency and accountability.

Significance of International Standards

The need for sustainability reporting has greatly improved in the last few years. A lot of emphasis is placed on the economic, environmental, and social effects of the company standards. In order to ensure maximum transparency, the implementation of international standards is essential.


Moreover, stakeholders in companies are now paying more attention to how enterprises impact the economy, nature, and community and how companies respond to sustainability problems and financial difficulties that affect their long-term survival and profitability.

Managing Material Sustainability

Material sustainability management should be suitable for purpose and, when feasible, connected with current organizational techniques and procedures, as well as international standards.

Organization rules and strategies typically govern decisions that affect the entire organization.

However, it is extremely important to use international standards and systems to resolve sustainability-related issues and create a well-organized report.

Attract More Customers

Implementing international sustainability standards will ultimately improve the quality of sustainability reporting and help companies in Malaysia to bring global leaders in sustainability. It can even take the companies to new heights of success.

As the importance of sustainability grows, a company that recognizes the potential and has the capacity to innovate will be able to expand through new goods, services, and consumers. In addition, the launch of sustainable products and services might help the company carve out a unique market.

How Has Business Registration Changed-1

Risk Management by Following Global Standards

Global standards pay special attention to risk management and the relationship between risk management and sustainability reporting. Accounting firms in Malaysia can also help organizations to follow these standards and enhance the quality of their sustainability reporting practices. Some of the ways in which risk management becomes easier are:

a. Mitigate Sustainability-Related Risks

Businesses are becoming increasingly vulnerable to environmental and social changes, such as population expansion, climate change, harsh weather, or strikes resulting from hazardous working conditions, which can result in losses or expenses (e.g. disruptions to production).

As a result, if an organization recognizes and manages sustainability-related risks early on, it will be better positioned to prevent and mitigate the costs associated with these risks. In addition, non-financial hazards are increasingly being recognized by businesses as having a direct or indirect financial impact.

b. Minimizing the Cost of Capital

Investors prefer companies that exhibit effective risk management and sustainability reporting practices because it increases business value and reduces risk, leading to a lower cost of capital. This is because risk premiums are added to financing cost for companies with dubious environmental or social policies.

c. Better Productivity

Implementing global standards of sustainability reporting provides a unique opportunity to the employees to enhance their ability to hire and retain the best people in the company. It will lead to a significant increase in employees’ loyalty and better productivity.

Furthermore, better branding and recognition will lead to more value in demand in the future.

However, it is crucial for organizations to focus on the risks associated with every aspect of a business, like sourcing raw material, energy usage, water usage, and many other factors that have to be discussed in sustainability reporting.

Global Standard of Sustainability Reporting

In Closing

There is no doubt that sustainability reporting is the need of the hour. Stakeholders, investors, consumers, and the general public expect companies to follow reliable standards and provide sustainable products and services.


Such standards bring much-needed transparency and uniformity in the process of sustainability reporting.


The good thing is that once a company decides to fully follow these standards, the process to implement these standards can become quite easy by starting from the top.


There are many authorities and resources available to facilitate companies in understanding and implementing the best standards of sustainability reporting.


Moreover, companies can also get help from professional accounting firms in Malaysia to ensure maximum productivity.