In an era where environmental and social responsibility are no longer just buzzwords but business imperatives, companies are increasingly aware of the need to integrate sustainability into their core operations. Recognizing this crucial shift, Bursa Malaysia has taken a proactive stance by advocating and mandating sustainability reporting practices for listed companies.
This blog serves as a guide for navigating the ever-evolving landscape of Bursa Malaysia Sustainability Reporting, empowering companies to effectively fulfil their reporting obligations and leverage the potential of sustainability disclosure for enhanced transparency, stakeholder engagement, and, ultimately, long-term value creation.
The Rise of Sustainable Investing: The global market for sustainable investments continues its meteoric growth, reaching an estimated $30.3 trillion in assets under management by 2022 (source: Global Sustainable Investment Alliance). Investors are increasingly seeking out companies that project strong environmental, social, and governance (ESG) practices, recognizing the positive interconnection between sustainability and financial performance.
Bursa Malaysia’s Commitment: Malaysia is actively aligning with this global trend. In 2006, Bursa Malaysia introduced the requirement for Main and ACE Market-listed issuers to disclose their corporate social responsibility (CSR) activities or practices in annual reports. Recognizing the need for a more comprehensive and standardized approach, in 2017, they announced the mandatory adoption of the Sustainability Reporting Guide (SRG) for Main Market listed companies, followed by the ACE Market in 2020. This guide aligns with globally recognized frameworks such as the Global Reporting Initiative (GRI) Standards and the Sustainability Accounting Standards Board (SASB) Industry Standards.
What’s Included? The SRG framework encompasses a wide range of sustainability aspects, including:
- Environment: Climate change, energy consumption, greenhouse gas emissions, water usage, waste management, biodiversity.
- Social: Labor practices, employee well-being, human rights, community engagement, product responsibility.
- Governance: Corporate governance practices, anti-corruption measures, board diversity, risk management.
Compliance vs. Competitive Advantage: While meeting compliance requirements is essential, companies with a forward-thinking mindset realize that sustainability reporting offers much more than just fulfilling regulatory obligations. By embedding sustainability into their strategies and reporting transparently, they can unlock a wealth of potential benefits, including:
- Enhanced Brand Reputation: Consumers and investors increasingly prioritize companies with strong sustainability practices, translating into improved brand image and reputation.
- Attract and Retain Talent: Millennial and Gen Z talent are inclined to work organizations that exhibit strong ESG values, enhancing recruitment and retention strategies.
- Improved Risk Management: Proactively managing sustainability risks leads to better long-term financial performance and resilience.
- Operational Efficiency: Sustainability initiatives often improve resource utilization and cost savings.
- Investor Relations: Comprehensive and transparent sustainability reporting attracts and sustains investor interest.
Navigating the Reporting Process: Practical Guidance
Embarking on sustainability reporting can seem unsettling, but it can be a smooth and rewarding process with the right resources and support. Here are some critical steps to keep in mind:
- Assess Your Current State: Conduct a thorough internal assessment of your company’s sustainability practices, identifying strengths, weaknesses, and areas for improvement.
- Define Your Materiality: Identify the most relevant ESG issues that significantly impact your business and stakeholders. This helps focus your reporting efforts and ensures valuable information is communicated.
- Choose the Right Framework: While the SRG provides a comprehensive framework, there are other internationally recognized options like GRI and SASB that you can use or adapt to your specific needs.
- Seek Expert Guidance: Consulting with sustainability professionals can provide valuable advice on aligning your reporting with best practices and regulations.
- Leverage Technology: Numerous software tools and platforms can streamline data collection, analysis, and reporting processes.
- Engage Stakeholders: Proactively engage with stakeholders throughout the process to understand their expectations and incorporate their feedback into your reporting.
Resources and Support:
Bursa Malaysia has established a dedicated platform, Bursa Sustain, to provide comprehensive resources and support to companies embarking on their sustainability reporting journey. This platform offers:
- Sustainability Reporting Guide and Toolkits: A comprehensive guide with detailed explanations, practical tools, and illustrative examples.
- Guidance on Disclosures: Additional resources and explanations on specific disclosure requirements.
- Interactive Sustainability Explainer Videos: Engaging videos explaining key sustainability concepts.
- Sustainability Reporting Resources: Downloadable templates, checklists, and other helpful resources.
- Contact Information: Direct access to relevant experts at Bursa Malaysia for inquiries and assistance.
- Engage Stakeholders: Proactively engage with stakeholders throughout the process to understand their expectations and incorporate their feedback into your reporting.
Looking Ahead:
- International Convergence: The sustainability reporting landscape constantly evolves, trending towards greater international convergence. Bursa Malaysia is committed to adapting its framework to meet international best practices.
- Technology: Technology is playing an increasingly important role in sustainability reporting. Data analytics and artificial intelligence tools can assist companies collect, analyze, and report on their sustainability data more effectively.
- Integration: Sustainability reporting should be seen as something other than a standalone exercise. It should be integrated into your overall business strategy and decision-making processes.
Conclusion: Building a Sustainable Future, Digitally Empowered
Bursa Malaysia’s sustainability reporting framework presents a powerful opportunity for Malaysian businesses to embrace transparency, accountability, and responsible practices. While navigating the intricacies of ESG reporting might seem challenging, remember that it’s an investment in your future and the planet’s.
The good news? You don’t have to go it alone. Digital transformation and ESG reporting software, like Benchmark Gensuite’s solutions, can be your secret weapon. By automating data collection, streamlining reporting, and delivering valuable insights, they can:
- Reduce the burden: Free your resources to focus on strategic sustainability initiatives and create a tangible impact.
- Boost accuracy and transparency: Ensure you report investment-grade ESG data that builds trust with stakeholders.
- Unlock powerful insights: Gain a data-driven understanding of your performance and identify areas for improvement.
- Track progress and accelerate impact: Set ambitious goals and measure your journey towards a more sustainable future.
Don’t wait any longer. Visit Benchmark Gensuite to learn how you can adopt an ESG reporting software, empowering you to comply with Bursa Malaysia’s regulations, exceed expectations, and build a promising future for business and the planet. Remember, sustainability isn’t just a trend; it’s the path to a more resilient and prosperous tomorrow. Take the first step today!
Click the button below to learn more about Benchmark Gensuite’s ESG reporting software solutions and embark on your sustainability journey!.
