The SC and the World Bank have unveiled the “ESG Disclosure Assessment of Malaysia’s Listed Companies and Recommendations for Policy Development” report during the SC-World Bank Conference 2024.
According to Bix Malaysia, the assessment establishes a baseline for ESG reporting practices among Malaysian listed companies, aiming to align these with international standards and enhance global competitiveness.
Sharifatul Hanizah Said Ali, SC Executive Director of Islamic Capital Market, highlighted the critical role of robust ESG disclosures in boosting investor confidence and maintaining a competitive market. “This joint report reflects our ongoing commitment to fostering a more sustainable capital market. Improved ESG disclosure practices are expected to strengthen investor confidence and ensure that our market remains competitive and future-ready,” she said.
Conducted between August and December 2023, the study examined the ESG practices of 90 companies listed on Bursa Malaysia, as well as the country’s major asset owners. It revealed that while corporate disclosures on governance and social issues are well-managed, there are significant gaps in environmental metrics, particularly concerning climate change and biodiversity.
The report also noted that larger companies tend to have better ESG disclosure rates compared to smaller ones, with regulatory compliance being the main motivator behind these practices. Despite low public disclosure levels, interviews with major Malaysian asset owners indicate a growing effort towards enhancing ESG strategies beyond current practices.
The conference, marking its fifth iteration and officiated by Deputy Minister of Investment, Trade and Industry YB Liew Chin Tong, also discussed the SC’s five-year roadmap aimed at catalysing access for MSMEs and mid-tier companies to capital markets.
Dr. Zafer Mustafaoğlu, World Bank Country Director for the Philippines, Malaysia, and Brunei Darussalam, expressed enthusiasm about the collaborative efforts. “Through our knowledge-based collaboration, we aim to support effective policy design and implementation to address the MSME and climate financing gaps, and I look forward to further leveraging the World Bank’s global expertise to support the Malaysian government, financial regulators, and the private sector in developing a more robust and resilient financing ecosystem for MSMEs,” he commented.
Recommendations from the report include continuous monitoring and consultation to implement effective ESG disclosures in line with the National Sustainability Reporting Framework (NSRF), promoting broader adherence to Bursa Malaysia’s sustainability reporting guidelines, and fostering ESG practices among domestic investors.
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