Takeaways
- Malaysian companies should understand Scope 1, Scope 2 and Scope 3 emissions for ESG, NSRF, IFRS S1 and IFRS S2 readiness.
- Business travel and employee commuting are minimum Scope 3 categories under Bursa Malaysia’s sustainability reporting requirements.
- These two categories are also recognised Scope 3 categories under the GHG Protocol used in IFRS S2.
- Reliable GHG reporting requires clear boundaries, consistent data, suitable emission factors and proper documentation.
- Strong carbon data governance helps companies prepare for sustainability reporting, climate disclosures and future assurance.
GHG emissions reporting is becoming increasingly important for Malaysian companies preparing for ESG reporting, NSRF, IFRS S1 and IFRS S2 readiness.
While many organisations begin with Scope 1 and Scope 2 emissions, Scope 3 emissions are also important because they reflect the wider carbon impact across the value chain. For Bursa Malaysia listed issuers, Scope 3 emissions should be disclosed at least for business travel and employee commuting. Under IFRS S2, companies are expected to consider Scope 3 emissions more broadly based on the GHG Protocol Scope 3 categories.
These two categories are therefore a practical and important starting point, as the data can often be collected from finance records, HR information and employee surveys.
Companies that are still at the early stage may also refer to our related article on ESG and NSRF readiness for Malaysian public listed companies to understand how GHG reporting fits into broader sustainability reporting preparation.
Table of Contents
Understanding Scope 1, Scope 2 and Scope 3 Emissions
Scope 1 emissions
Scope 1 emissions are direct emissions from sources owned or controlled by the company.
Examples include:
- Fuel used in company-owned vehicles
- Diesel used in generators
- LPG or natural gas used in operations
- Refrigerant leakage from air-conditioning or cooling systems
- Fuel combustion in boilers, machinery or production processes
For Malaysian companies, Scope 1 data is commonly collected from fuel purchase records, vehicle logs, generator usage records and maintenance reports.
Scope 2 emissions
Scope 2 emissions are indirect emissions from purchased electricity, steam, heating or cooling consumed by the company.
For most organisations in Malaysia, Scope 2 emissions mainly come from purchased electricity used in offices, factories, warehouses, retail outlets and other facilities.
Common data sources include:
- Electricity bills
- Meter readings
- Tenant electricity records
- Facility energy reports
- Internal energy monitoring systems
Scope 3 emissions
Scope 3 emissions are indirect emissions that occur across the company’s value chain, outside its direct operations and purchased electricity.
Examples include purchased goods and services, logistics, waste, business travel, employee commuting, use of sold products and end-of-life treatment of sold products.
Scope 3 is usually more complex because the data may involve employees, suppliers, customers, travel agents, landlords and other third parties.
Companies preparing for future GHG assurance may find it useful to review Bernard Business Consulting’s article on what Malaysian companies need to prepare before GHG verification, especially when strengthening data quality and internal documentation.
Why Business Travel and Employee Commuting Matter
Business travel and employee commuting are important because they are among the most immediate Scope 3 categories that companies can begin measuring.
For Bursa Malaysia listed issuers, these two categories are specifically highlighted as the minimum Scope 3 emissions categories to report. For companies preparing for IFRS S2-aligned climate disclosures, they also provide a useful starting point before expanding into other relevant Scope 3 categories across the value chain.
Business travel data may already be available from finance claims, travel booking records and corporate credit card statements. Employee commuting data can be collected through a simple staff survey.
Measuring these categories can help companies:
- Understand carbon emissions linked to travel behaviour
- Improve travel and work arrangement policies
- Identify opportunities to reduce travel-related costs
- Engage employees in sustainability initiatives
- Prepare stronger ESG and climate-related disclosures
- Support NSRF, IFRS S1 and IFRS S2 readiness
This is especially relevant as companies begin connecting sustainability matters with business strategy, financial impact and climate-related risks. For a broader perspective, companies may refer to our article on preparing for climate-related financial disclosures in Malaysia.
How to Measure Business Travel under Scope 3
Business travel emissions refer to emissions from employee travel for work purposes using transport not owned or controlled by the company.
This may include:
- Flights
- Taxis and e-hailing services
- Rental cars
- Rail travel
- Buses and coaches
- Personal vehicles used for business trips
- Hotel stays, where applicable
The first step is to define what counts as business travel. Companies should clarify whether they include domestic flights, international flights, mileage claims, hotel nights and local transport claims.
The next step is to collect activity data from travel agency reports, finance claims, HR travel approvals, flight bookings, e-hailing receipts and corporate credit card records.
The basic calculation is:
Emissions = Activity data × Emission factor
For flights, activity data may include origin, destination, travel class and number of passengers. For mileage claims, it may include distance travelled, vehicle type and fuel type where available.
Companies should document the emission factors, calculation assumptions and data gaps used in the process. This makes the calculation more transparent and easier to review.
How to Measure Employee Commuting under Scope 3
Employee commuting emissions refer to emissions from employees travelling between home and their normal workplace.
This may include:
- Private cars
- Motorcycles
- Buses
- MRT, LRT, monorail and KTM
- Company shuttle buses
- Carpooling
- Walking and cycling
- Hybrid working arrangements
A practical way to start is by conducting an employee commuting survey. The survey can ask employees about their main transport mode, estimated distance to work, commuting days per week, carpooling arrangement, vehicle fuel type and work-from-home frequency.
Companies do not need to collect full home addresses. Estimated distance bands or general location data may be sufficient, depending on the methodology used.
The basic calculation can be:
Annual commuting distance = Return trip distance × commuting days per year
The company can then apply suitable emission factors based on transport mode, such as petrol cars, motorcycles, buses or rail-based public transport.
For hybrid employees, the calculation should reflect actual or estimated office attendance days. For shift workers, companies should consider work schedules and site-specific commuting patterns.
Common Challenges Companies Face
Many Malaysian companies face similar challenges when measuring Scope 3 emissions for the first time.
Common issues include:
- Incomplete travel records
- Manual expense claim processes
- Limited employee commuting data
- Unclear reporting boundaries
- Inconsistent calculation methods
- Lack of emission factor documentation
- Limited coordination between finance, HR, operations and sustainability teams
These challenges are normal at the early stage. The key is to start with a clear and practical method, then improve the process over time.
Companies that want to align their GHG reporting with recognised standards may also refer to our article on how to implement ISO 14064 for verification in Malaysia.
What Companies Should Do Next
To strengthen GHG Scope 1, 2 and 3 reporting readiness, companies should:
- Assign clear data owners across finance, HR, sustainability, operations and facilities
- Prepare a standard GHG data collection template or deploy a carbon calculation tool, such as TT-Green, to improve data consistency and reporting efficiency.
- Define reporting boundaries for business travel and employee commuting
- Conduct an employee commuting survey
- Consolidate travel and expense records
- Document emission factors, assumptions and exclusions
- Review travel, commuting and flexible work policies
- Identify other relevant Scope 3 categories for future IFRS S2-aligned reporting
These steps can help companies move from basic estimation to more reliable and decision-useful carbon reporting.
Conclusion
GHG emissions reporting is becoming an important part of sustainability and climate readiness for Malaysian companies. While Scope 1 and Scope 2 emissions are often the first step, Scope 3 emissions provide a wider view of how business activities contribute to the organisation’s carbon footprint.
Business travel and employee commuting are practical categories for companies to begin measuring under Scope 3, especially because they are minimum Scope 3 categories under Bursa Malaysia’s sustainability reporting requirements and recognised Scope 3 categories under the GHG Protocol used in IFRS S2.
Bernard Business Consulting supports organisations in Malaysia with practical ESG, sustainability reporting, carbon accounting, GHG verification readiness, climate-related disclosures, NSRF readiness and IFRS S1 and IFRS S2 implementation support.
Contact us to find out how Bernard Business Consulting can support your organisation with practical advisory, training, reporting, and implementation support related to GHG Scope 1, 2 and 3 Emissions.
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