Takeaways
- Malaysian PLCs do not need a dedicated sustainability team to begin preparing for NSRF, but they do need clear governance and accountability.
- ESG reporting under NSRF is a cross-functional effort involving the board, management, finance, risk, operations and other business functions.
- Building governance and internal reporting processes early helps organisations avoid costly last-minute compliance efforts.
- Conducting an NSRF readiness assessment enables organisations to identify capability gaps and prioritise implementation activities.
- External advisors can accelerate implementation while helping organisations build sustainable internal capability and ownership.
Malaysia’s sustainability reporting landscape is changing rapidly. As the National Sustainability Reporting Framework (NSRF) is progressively adopted, public listed companies (PLCs) are expected to strengthen how they identify, manage and disclose sustainability-related risks and opportunities in line with IFRS S1 and IFRS S2.
While some large organisations have invested in dedicated ESG or sustainability departments, many Malaysian PLCs are only beginning their sustainability journey.
For these organisations, sustainability responsibilities are often shared among finance, risk management, company secretarial, compliance or corporate planning teams. Formal ESG governance may still be evolving, internal reporting processes may not yet be established, and many employees are navigating sustainability reporting requirements for the first time.
This raises a common concern among boards and senior management:
Can we prepare for NSRF without a dedicated sustainability team?
The answer is yes.
NSRF does not require companies to establish a standalone sustainability department before they begin reporting. Instead, it requires organisations to demonstrate effective governance, appropriate oversight, reliable sustainability information and a structured approach to managing sustainability-related risks and opportunities.
For companies that are new to ESG, success depends less on organisational size and more on establishing the right governance, engaging the right people and implementing practical reporting processes.
Table of Contents
ESG Reporting Is Now a Business Responsibility, Not Just a Sustainability Function
One of the biggest misconceptions surrounding ESG reporting is that it should be managed entirely by a sustainability team.
In reality, sustainability reporting under NSRF requires contributions from almost every business function because sustainability-related information is generated across the organisation.
Typical contributors include:
- Board of Directors
- Senior Management
- Finance
- Enterprise Risk Management
- Operations
- Procurement
- Human Resources
- Legal and Compliance
- Investor Relations
- Environment, Health and Safety (EHS)
For example, finance teams help assess financial implications and disclosure controls, risk teams identify sustainability-related risks and opportunities, operations provide environmental performance data, while procurement contributes supplier and value chain information.
Ultimately, the board provides governance and oversight.
This cross-functional approach is consistent with the governance principles embedded within IFRS S1 and IFRS S2, where sustainability information is expected to support business strategy, risk management and investor decision-making rather than exist as a standalone report.
Why Many Malaysian PLCs Are Still Building ESG Capability
For many organisations, ESG reporting is a relatively new discipline.
Historically, sustainability reporting focused largely on voluntary disclosures and corporate social responsibility initiatives. Today, NSRF introduces a more structured and investor-focused approach that requires organisations to disclose how sustainability-related matters may affect enterprise value.
As a result, many Malaysian PLCs are currently facing several implementation challenges.
1. Governance is still developing
Boards may understand the importance of ESG but have yet to establish formal governance structures, reporting lines or management accountability.
2. ESG responsibilities are unclear
Without defined ownership, departments may assume another team is responsible for collecting sustainability information.
3. Data is fragmented
Required information often resides across different departments, spreadsheets and operational systems, making data collection inefficient.
4. Limited internal expertise
Many finance, operations and risk professionals are learning ESG reporting requirements alongside their existing responsibilities.
These challenges are entirely normal for organisations in the early stages of NSRF implementation and should not prevent companies from starting their ESG journey.
What Does NSRF Actually Require?
Unlike earlier sustainability reporting frameworks that focused primarily on environmental and social initiatives, NSRF is aligned with IFRS Sustainability Disclosure Standards and emphasises information that is material to investors.
Organisations are expected to disclose:
- Governance over sustainability-related risks and opportunities
- Strategy and business resilience
- Risk management processes
- Sustainability-related metrics and targets
- Climate-related risks and opportunities
- Decision-useful information that may affect enterprise value
Importantly, these disclosures cannot be produced by one department alone.
They require collaboration between leadership, finance, operations and risk management to ensure sustainability information is complete, reliable and integrated into business decision-making.
Five Practical Steps to Prepare for NSRF
Companies that are new to ESG should focus on building strong foundations rather than attempting to achieve full maturity immediately.
Step 1: Establish ESG governance
Before collecting data, organisations should determine how sustainability will be governed.
This includes defining:
- Board oversight
- Management accountability
- Cross-functional working groups
- Reporting responsibilities
- Decision-making processes
Good governance creates accountability and ensures sustainability reporting becomes part of normal business operations rather than an annual reporting exercise.
Step 2: Conduct an NSRF readiness assessment
A readiness assessment helps organisations understand their current level of preparedness by evaluating governance, reporting processes, available data, internal capabilities and alignment with NSRF requirements.
Rather than guessing where to begin, organisations can prioritise improvements based on identified gaps.
Step 3: Map existing ESG information
Many companies already possess much of the information required for sustainability reporting.
Examples include:
- Energy consumption
- Fuel usage
- Greenhouse gas emissions
- Health and safety records
- Employee information
- Procurement data
- Enterprise risk registers
- Internal policies
The challenge is often organising, validating and governing the information rather than collecting entirely new data.
Step 4: Build capability across departments
ESG reporting should not be understood only by sustainability practitioners.
Board members, senior management, finance teams, risk professionals and operational managers all require sufficient understanding of their respective roles within the reporting process.
Practical training and awareness programmes can significantly improve reporting quality while strengthening internal ownership.
Step 5: Develop a phased implementation roadmap
Organisations should avoid trying to implement every aspect of NSRF simultaneously.
Instead, focus on establishing:
- ESG governance
- Sustainability risk assessment
- Greenhouse gas accounting
- Climate-related governance
- Reporting procedures
- Data management processes
A phased approach allows organisations to progressively strengthen capability while preparing for future assurance requirements.
Building Internal Capability with External Support
Many Malaysian PLCs engage external ESG advisers during the early stages of implementation—not because they intend to outsource sustainability permanently, but because they want to accelerate learning and reduce implementation risks.
An experienced advisor can help organisations:
- Assess NSRF readiness
- Design ESG governance structures
- Conduct sustainability risk and opportunity assessments
- Facilitate double materiality assessments
- Develop greenhouse gas inventories
- Prepare climate-related disclosures
- Train boards, management and reporting teams
The objective is not to replace internal ownership, but to build the governance, knowledge and processes that enable organisations to manage sustainability reporting confidently over the long term.
Additional Resources to Support Your NSRF Journey
Preparing for NSRF involves more than understanding reporting requirements. Organisations should also strengthen their governance, climate risk management and ESG data capabilities.
To explore these topics further, you may find these Bernard Business Consulting articles helpful:
- ESG and NSRF Readiness for Malaysian Public Listed Companies: Where Should You Start?
- Sustainability Risk and Opportunity Assessment in Malaysia: How Companies Can Prepare for IFRS S1 and NSRF Reporting
- Double Materiality Assessment in Malaysia: How Companies Can Assess ESG Impacts, Risks and Financial Implications
- Climate Risk and Opportunity Assessment in Malaysia: A Practical Guide to Qualitative Climate Scenario Analysis under IFRS S2
- GHG Scope 1 and Scope 2 Verification in Malaysia: What Companies Need to Prepare Before NSRF Assurance Starts in 2027
For additional guidance on sustainability-related financial disclosures, organisations may also refer to:
Conclusion
For many Malaysian PLCs, preparing for NSRF is not about building a large sustainability department overnight. It is about creating the governance, accountability and reporting processes needed to produce credible sustainability disclosures that support better business decisions.
Organisations that start early can progressively strengthen governance, improve ESG data quality and build internal capability before reporting obligations become more demanding.
Whether your company is just beginning its ESG journey or refining existing sustainability practices, taking a structured and practical approach today will position your organisation for greater resilience, stronger investor confidence and long-term business value.
Webinar
How Can You Build Effective ESG Governance?
28th July 2026, 2:00 PM to 2:30 PM MYT
Build a strong ESG governance foundation for NSRF and IFRS S1 & S2 readiness. Learn practical approaches to governance structures, accountability and oversight that strengthen strategy, reporting and long-term business resilience.