Is sustainability reporting mandatory?

Sustainability reporting has become mandatory in Malaysia for all types of organizations.


In 2007, Bursa Malaysia made an amendment through which every listed company became obligated to produce a thorough statement associated with corporate social responsibility activities.


Numerous other steps have also been taken to promote the significance of sustainability reporting in companies. This article will discuss the fundamentals of sustainability reporting and why it has become mandatory in Malaysia.

What is Sustainability?

A vastly acceptable definition of sustainability is that it involves development that meets the requirements of the present times without compromising the capability of future generations to meet their needs. Environmental, social, and governance (ESG) are closely associated with sustainability, especially in the investment community.


In the international community, most well-established organizations have moved beyond corporate social responsibility with the help of modern skills, knowledge, and technology that allows the development and implementation of sustainable management models.


Furthermore, statistics show that many stakeholders now prefer organizations that focus on managing their financial, environmental and social risks. Professional accounting firms in Malaysia help organizations comply with the law and conduct thorough sustainability reporting.


Companies typically create a sustainability report on an annual basis to share their corporate social responsibility and outcomes with the stakeholders and investors. This report reflects the impact of business operations on the environment, society, and economy.


The primary goal of the sustainability reports is intended to help businesses assess the effect of their operations on the environment, society, and economy.


It also creates an ideal opportunity for companies to present their beneficial impacts on the planet and society so that stakeholders can become familiar with their sustainable development objectives.

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Increasing Importance of Sustainability Reporting

The significance of sustainability reporting has increased due to the increasing impacts of sustainability-related risks like scarcity of resources and climate change.

Organizations must now focus on the far-reaching impact of their business procedures, manufacturing facilities, and business operations to ensure maximum sustainability.

Moreover, companies developing innovative solutions for sustainable growth and presenting these solutions in sustainability reports are likely to gain a significant advantage in the market by impressing investors as well as consumers.

Why is Integrating Sustainability Reporting in your Business Important?

Nowadays, stakeholders that include investors, customers, employees, and suppliers are very familiar with the impact of business on the economy and the environment. However, there can be both positive and negative impacts from this.

Therefore, it is highly important that the organizations focus on sustainability by preparing comprehensive sustainability reports and presenting all the essential information to the stakeholders.

Another reason why organizations have to integrate sustainability reporting into their reporting procedures is that it has become mandatory for all listed companies in Malaysia.

The amendment in Practice Note 9 of the Listing Requirements says that the annual reports generated by organizations must have a sustainability statement that deals with economic, social, and environmental risks and opportunities.

Therefore, companies have to conduct sustainability reporting to satisfy the stakeholders and comply with the law. Otherwise, an organization can face legal action like penalties and also a bad reputation among the stakeholders.

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Risk Management

In order to deal with the potential risks associated with sustainability reporting, it is better to rely on professional accounting services in Malaysia to ensure the entire process of sustainability reporting is completed with maximum accuracy and efficiency.


Risk management is important to mitigate the risks related to the sustainability of the environmental and social changes caused by an organization. Failure to deal with sustainability-related problems can result in financial losses for the company.


It is important for companies to be proactive in identifying and recognizing the potential sustainable issues resulting from their business procedures. Similarly, it is always a good idea to remain up-to-date with the rules and regulations related to sustainability reporting. Such processes become easier to follow and implement in an organization with the help of an accounting firm in Malaysia that provides reliable sustainability reporting services.


Comprehensive sustainability reporting, along with risk management, will help your company build a reliable and sustainable brand that attracts stakeholders. In addition, a thorough sustainable report also helps you in providing all of the essential information to the investors.

All in All

In short, sustainability reporting is mandatory for companies because modern global standards require companies to focus on sustainable development so that they are not hurting society and future generations while growing their business.

Companies should rely on professional accounting firms in Malaysia to fulfill this essential legal requirement and prepare thorough sustainability reports.