Climate reporting rules in Malaysia and worldwide

In Malaysia, listed companies and large non-listed companies must report climate information under IFRS S1 and IFRS S2. The National Sustainability Reporting Framework (NSRF) phases this in from 2025 to 2027, by company group. Reasonable assurance of Scope 1 and Scope 2 emissions starts in 2028. Outside Malaysia, the most direct effect for many exporters is the EU Carbon Border Adjustment Mechanism (CBAM).

This page gives the position as of November 2026.

IFRS S1 and IFRS S2

The International Sustainability Standards Board (ISSB) issued both standards in June 2023:

• IFRS S1 sets the general rules for reporting sustainability risks and opportunities that affect a company's prospects.
• IFRS S2 covers climate. It asks for governance, strategy, risk management, and metrics and targets.

For emissions, IFRS S2 requires absolute gross Scope 1, Scope 2 and Scope 3 emissions in tCO₂e, measured with the GHG Protocol Corporate Standard. In the first year, a company does not have to report Scope 3. The ISSB made targeted changes to the emissions requirements in December 2025, for example on financed emissions. These changes apply from 2027, and companies can use them earlier.

The NSRF timeline

The Advisory Committee on Sustainability Reporting (ACSR), chaired by the Securities Commission Malaysia, released the NSRF on 24 September 2024. It makes IFRS S1 and IFRS S2 the baseline for Malaysian companies.

Each year in the table means annual reporting periods that begin on or after 1 January of that year. For a company with a December year end, "2025" means the financial year that ends on 31 December 2025.

The NSRF gives extra transition reliefs for the first 2 years for Groups 1 and 2, and for the first 3 years for Group 3:

• You can report on climate only, under IFRS S2, before the other sustainability topics.
• You can focus the climate disclosures on your principal business segments.
• You can leave out Scope 3, except for the categories that your regulator already requires.

The Malaysian Accounting Standards Board (MASB) is expected to take over as the national standard-setter for sustainability disclosures in early 2027.

Bursa Malaysia Listing Requirements

In December 2024, Bursa Malaysia amended its Main Market and ACE Market Listing Requirements. A listed company's Sustainability Statement must now follow IFRS S1 and IFRS S2 on the NSRF timeline. It must also cover Bursa's common sustainability matters. For emissions, these are:

• Scope 1 emissions in tCO₂e
• Scope 2 emissions in tCO₂e
• Scope 3 emissions in tCO₂e, at least for business travel and employee commuting

This is why business travel and employee commuting stay in the report even while the NSRF Scope 3 relief applies.

Assurance

Assurance is an independent check of the reported numbers. On 17 September 2026, the ACSR moved the start of mandatory reasonable assurance on Scope 1 and Scope 2 emissions back by one year:

Any independent assurance must now use ISSA 5000. Until mandatory assurance starts, listed companies must state whether their sustainability disclosures had an internal review or independent assurance. The ACSR made this change after a review of the first 91 Group 1 reports found that disclosure quality must improve.

Carbon pricing in Malaysia

The government announced a carbon tax on the iron, steel and energy sectors in Budget 2025 and again in Budget 2026. In 2026, it deferred the tax because of high energy prices and global uncertainty. As of November 2026, no rate or start date is set. The government launched the National Carbon Market Policy in April 2026. A Climate Change Bill, which is expected to give the legal basis for carbon pricing, had not been tabled by October 2026. Carbon markets and offsets explains how carbon pricing works.

Outside Malaysia

ISSB adoption. Many jurisdictions adopt or use the ISSB standards. The IFRS Foundation publishes a profile for each jurisdiction. If your parent company or a large customer reports abroad, ask which standard it uses.

EU CBAM. CBAM applies to imports into the EU of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Since 1 January 2026, EU importers pay for the emissions in these goods. They submit the first annual declaration for 2026 imports by 30 September 2027. They can deduct a carbon price already paid in the country of production. Malaysia has no carbon price in force, so exporters cannot use this deduction yet. Exporters that supply actual emissions data help their buyers avoid default values.

What this means for your company

• If you are in Group 1 or Group 2, your inventory must be ready for assurance by 2028 or 2029.
• If you are in Group 3, climate reporting starts with periods that begin in 2027.
• If you are not in a group, expect data requests from customers that are. Their Scope 3 includes your emissions.

The Reports guide shows how to produce reports in Carbon GPT. For common reporting errors, read 5 costly mistakes in IFRS S2 compliance. For wider policy context, read Malaysia's green economy in 2025.

Sources

• Securities Commission Malaysia: National Sustainability Reporting Framework
• Securities Commission Malaysia: NSRF policy document
• Securities Commission Malaysia: Mandatory sustainability assurance requirement to take effect in 2028 (17 September 2026)
• IFRS Foundation: Malaysia jurisdictional profile
• IFRS S2 Climate-related Disclosures
• IFRS: Amendments to Greenhouse Gas Emissions Disclosures (December 2025)
• Bursa Malaysia: Main Market Listing Requirements
• Malaysia's responses to UNFCCC questions, 2026 (carbon tax deferral)
• The Star: Govt defers carbon tax amid global uncertainties (5 October 2026)
• European Commission: Carbon Border Adjustment Mechanism