Malaysia NSRF: ISSB Reporting Roadmap for Bursa Issuers
Malaysia NSRF: The ISSB-Aligned Reporting Roadmap for Bursa Issuers
Around 130 of Malaysia's largest companies started measuring climate data on 1 January 2025, and their first disclosures are landing in 2026 annual reports. Every other Bursa Malaysia Main Market issuer joins them for financial years starting 1 January 2026. The instrument behind this shift is the National Sustainability Reporting Framework (NSRF), launched by the Securities Commission Malaysia (SC) on 24 September 2024.
The NSRF makes the ISSB Standards, IFRS S1 and IFRS S2, the mandatory baseline for sustainability disclosure in Malaysia. For sustainability and finance leads at Bursa-listed issuers and large private companies, the practical question is not whether this applies, but which group you sit in, what you can defer, and when assurance starts to bite.
Source: Securities Commission Malaysia, National Sustainability Reporting Framework; S&P Global Market Intelligence.
In This Article
- What the Malaysia NSRF is and who built it
- The Group 1, 2, and 3 reporting timeline
- Climate-first and Scope 3 transition reliefs
- When reasonable assurance becomes mandatory
- How large non-listed companies get pulled in
- A six-step NSRF readiness roadmap
What Is the Malaysia NSRF?
The National Sustainability Reporting Framework (NSRF) is Malaysia's phased adoption of the ISSB Standards, IFRS S1 and IFRS S2, as the mandatory baseline for corporate sustainability disclosure. It applies to Bursa Malaysia issuers and large non-listed companies, using a climate-first sequence and extended transition reliefs.
The framework was developed by the Advisory Committee on Sustainability Reporting (ACSR). That committee brings together the SC, the Audit Oversight Board, Bank Negara Malaysia, the Companies Commission of Malaysia, Bursa Malaysia, and the Financial Reporting Foundation. The membership signals that securities, banking, and company-law regulators are aligned behind one disclosure standard rather than three competing ones.
Two definitions anchor the framework. IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) sets the rules for reporting any sustainability risk or opportunity that could affect enterprise value. IFRS S2 (Climate-related Disclosures) covers climate specifically, including greenhouse gas emissions and scenario analysis. Both were issued by the International Sustainability Standards Board (ISSB), the global standard-setter under the IFRS Foundation.
Malaysia is not acting alone. It joins more than 20 jurisdictions, collectively representing 55% of global GDP, that have decided to use or move towards the ISSB Standards. For a trade-exposed economy embedded in global supply chains, speaking the same disclosure language as its trading partners is a competitiveness decision as much as a climate one.
Source: Securities Commission Malaysia; KPMG Malaysia, Prepare for NSRF; CMS, Malaysia launches NSRF.
When Do Bursa Companies Start ISSB Reporting?
Reporting starts in three waves. Group 1, the largest Main Market issuers, begins for financial years starting on or after 1 January 2025. Group 2, the remaining Main Market issuers, begins from 1 January 2026. Group 3, ACE Market issuers and large non-listed companies, begins from 1 January 2027.
The phasing is built around size and market. The SC put the most reporting-mature firms first, which gives smaller issuers time to build data systems and hire capacity before their own deadlines arrive.
Group 1: The largest Main Market issuers
Group 1 covers Main Market-listed issuers with a market capitalisation of RM2 billion or above. That is roughly 130 companies, but they represent more than 80% of Bursa Malaysia's total market capitalisation. These firms measure from financial year 2025, with first disclosures appearing in 2026 annual reports.
Group 2: The rest of the Main Market
Group 2 catches every other Main Market issuer, regardless of market cap, from 1 January 2026. For a company with a 31 December year-end, the 2026 financial year is the first reporting period, with disclosures published in 2027.
Group 3: ACE Market and large non-listed companies
Group 3 starts from 1 January 2027 and covers two distinct populations: issuers on Bursa's ACE Market, and large non-listed companies (NLCos). A non-listed company falls in scope where its consolidated group revenue is RM2 billion (approximately USD 500 million) or above for two consecutive financial years before the current one.
Source: Securities Commission Malaysia media release; S&P Global; PwC Malaysia.
What Can You Defer? The Climate-First and Scope 3 Reliefs
Malaysia did not simply switch on the full ISSB Standards on day one. The NSRF carries the reliefs the ISSB permits, plus additional transition reliefs layered on top. The two that change near-term workload most are the climate-first sequence and the Scope 3 deferral.
Climate-first reporting
For the first two reporting periods, Group 1 and Group 2 companies may report only climate-related information under IFRS S2, rather than the full breadth of IFRS S1. They can also focus those climate disclosures on their principal business segments. Full IFRS S1 adoption follows once the two-cycle window closes.
Three emissions terms recur here. Scope 1 is direct emissions from sources a company owns or controls. Scope 2 is indirect emissions from purchased electricity, heat, or steam. Scope 3 is every other value-chain emission, from purchased goods to product use, and it is usually the largest and hardest to measure.
Scope 3 deferral
Scope 3 disclosure carries its own relief. Groups 1 and 2 get two reporting periods before Scope 3 is required; Group 3 gets three. In practice, Group 1 moves to full IFRS S1 and S2 with Scope 3 for annual periods beginning on or after 1 January 2027. Group 3’s full Scope 3 obligation arrives around 2030.
The relief is real, but it buys preparation time, not a pass. Scope 3 data depends on suppliers, and supplier data takes cycles to collect and clean. This is the same targeted-relief logic the ISSB applied in its 2027 amendments to IFRS S2, which Spectreco covered in detail for GCC and multi-market reporters.
Source: Securities Commission Malaysia; Terrascope, Malaysia climate disclosure rules.
The Assurance Onramp: When Reasonable Assurance Bites
Disclosure without assurance invites greenwashing challenges, and the NSRF closes that gap on a schedule. The framework moves companies from internal review toward mandatory external assurance, starting with the emissions numbers investors scrutinise most.
Two assurance terms matter. Limited assurance gives a moderate, negative-form conclusion: nothing came to the practitioner's attention. Reasonable assurance is a high level of assurance expressed as a positive opinion, the same standard applied to audited financial statements.
The ACSR aims to mandate reasonable assurance on Scope 1 and Scope 2 emissions two years after each group’s initial adoption:
- Group 1: annual reporting periods beginning on or after 1 January 2027
- Group 2: 1 January 2028
- Group 3: 1 January 2029
This timeline remains subject to further consultation. Engagements are expected to follow the assurance standards adopted by the Malaysian Institute of Accountants (MIA), which point toward ISSA 5000, the IAASB’s dedicated sustainability assurance standard, and ISAE 3000 (Revised).
The practical read is simple. The data feeding your 2025 and 2026 climate disclosures needs an audit trail now, because the same numbers face reasonable assurance within two cycles. Spreadsheet-based emissions tracking rarely survives that review.
Source: Grant Thornton Malaysia; PwC Malaysia.
Do Large Non-Listed Companies Report Under NSRF?
Yes. Large non-listed companies with consolidated group revenue of RM2 billion or above are in scope from 1 January 2027 as part of Group 3. The threshold applies where that revenue is met for two consecutive financial years preceding the current one.
This is the part of the NSRF that catches finance teams off guard. Most sustainability reporting rules stop at listed issuers. Malaysia deliberately extended the perimeter to large private companies, which means family-owned groups, private equity portfolio companies, and privately held exporters can be pulled in without ever having filed a prospectus.
For these companies the difficulty is starting from a lower base. Listed issuers have reported sustainability information since 2016 and TCFD-aligned climate data more recently. TCFD, the Task Force on Climate-related Financial Disclosures, was the voluntary framework the ISSB Standards now build on. A large NLCo without that history has to stand up governance, data collection, and disclosure processes at the same time.
One narrow relief helps. A large non-listed company whose holding entity already reports under the ISSB Standards or an equivalent framework can lean on that group reporting rather than duplicate the exercise.
Source: Securities Commission Malaysia; Oren, NSRF compliance guide.
Why 2026 Is a Convergence Year for Malaysian Companies
The NSRF is not arriving in isolation. Three regulatory forces land in the same window, and they share one input: verified emissions data.
Malaysia’s carbon tax is expected to take effect in 2026, starting with the iron, steel, and energy sectors. Rate estimates run from roughly RM15 to RM50 per tonne of CO2 equivalent, with the final figure still under consultation. The tax base is facility-level Scope 1 emissions, the same data the NSRF requires.
The second force is the European Union’s Carbon Border Adjustment Mechanism (CBAM), a carbon tariff on imports into the EU. Its covered sectors, iron, steel, aluminium, cement, fertilisers, and electricity, overlap heavily with Malaysia’s carbon tax. A Malaysian exporter in those sectors now faces domestic tax, CBAM reporting, and NSRF disclosure drawing on one dataset. Spectreco mapped the same pressure for Pakistan’s textile exporters.
The market read is consistent: companies that build integrated emissions data once, and report it across all three regimes, carry a structural cost advantage. Those treating each regime as a separate project pay three times for the same numbers.
Source: Oren, ESG reporting Malaysia guide; Reccessary, carbon readiness analysis.
How to Prepare for NSRF: A Six-Step Readiness Roadmap
The gap between today and your group’s first reporting period is preparation time. These steps cannot be compressed into the final quarter before filing.
- Confirm your group and timeline. Establish whether you are Group 1, 2, or 3, and whether a large non-listed entity in your group crosses the RM2 billion revenue threshold. Your group determines every downstream deadline.
- Run a climate materiality assessment. Identify the climate risks and opportunities that could affect enterprise value for your specific business and sector. This is the foundation every IFRS S2 disclosure sits on.
- Map your emissions data gaps. Locate where Scope 1 and Scope 2 data lives, who owns it, and whether it carries an audit trail. Informal tracking rarely meets assurance standards.
- Refresh governance documentation. Assign board oversight of climate risk, update committee charters, and record how often the board reviews climate matters. Governance is the first thing assurance providers test.
- Plan the assurance pathway early. Build Scope 1 and 2 data to withstand reasonable assurance before the 2027 to 2029 deadlines, and engage your assurance provider ahead of the crunch.
- Choose reporting infrastructure. Decide between spreadsheets, a managed service, or a purpose-built platform. For companies facing Scope 3 and assurance within two cycles, a spreadsheet-based system compounds audit risk each year.
Malaysia’s PACE Hub offers capacity-building support and emissions calculators, and Spectreco’s ESG training and capacity-building practice can accelerate internal readiness.
Source: Securities Commission Malaysia (PACE); Oren, Bursa Malaysia reporting guide.
Frequently Asked Questions (FAQs)
Build Your NSRF Readiness Plan
Group 1 is already reporting. Group 2 is measuring now. Group 3 has less runway than 2027 suggests once data lineage and assurance are factored in.
Spectreco pairs an AI-driven sustainability platform with hands-on advisory to close the gap between where your emissions data sits today and what the NSRF requires. Our compliance, reporting and disclosures team designs IFRS S1 and S2 disclosure architectures, and our Virtual Sustainability Office runs the reporting cycle so your team stays focused on decisions, not spreadsheets.
Book a 30-minute NSRF readiness assessment: talk to Spectreco.
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