SSM conducts public consultation on proposed sustainability reporting amendments to Companies Act 2016

11 May 2026

On 30 April 2026, the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia “SSM”) published a consultative document seeking feedback on proposed amendments to the Companies Act 2016 (“CA 2016”) on sustainability reporting. Under this initiative, sustainability and non-financial information disclosure provisions will be introduced to align with Malaysia’s corporate reporting framework, reflecting both international best practices and the nation’s sustainability goals. The consultative document is available here.

This article discusses the proposed policies based on the initial consultation process.  

Proposed amendments to CA 2016

The proposed amendments to CA 2016 shift sustainability reporting from voluntary to a mandatory “comply or explain” regime for non-listed companies (“NLCOs”) within the prescribed thresholds.

The proposed amendments to subsection 253(3) of CA 2016 include:

• Definitions of sustainability reporting-related terms;
• Thresholds for companies to adopt sustainability reporting;
• Contents required to be included in the report;
• Implementation timeline of phases; and
• Assurance requirement and implementation timeline.

SSM also proposes to empower the Registrar to determine the thresholds and scope of the sustainability disclosures.

Directors’ accountability for sustainability disclosures

Currently, disclosure of sustainability related information in the directors’ report for each financial year is optional, and omission of the matters prescribed under subsection 253(3) does not constitute non-compliance or attract penalties. SSM aims to strengthen the accountability of directors by enhancing the reporting requirements under sections 252 and 253 of the CA 2016 to include sustainability and non-financial information disclosures. SSM proposes to levy a fine not exceeding RM 20,000 for non-compliance.

Content of sustainability report

The proposed definition of the term “sustainability report” is a report containing sustainability or climate-related information prepared in accordance with the CA 2016 and any requirements prescribed by the Registrar.

A comparative analysis of the United Kingdom, Australia, and Singapore shows a trend towards a climate-first approach, whereby jurisdictions prioritise climate-related disclosures before introducing much broader and complex sustainability reporting requirements. SSM proposes a similar phased approach for the content of the sustainability report:

• Phase 1: Climate disclosures, such as greenhouse gas emissions;
• Phase 2: Simplified sustainability disclosures, such as governance and oversight of sustainability matters, identification of material sustainability risks and opportunities; and
• Phase 3: Adoption of climate-related disclosures issued by the International Financial Reporting Standards (“IFRS S2”), including governance, strategy and risk management, metrics and targets, and climate information.

Thresholds and timeline to disclose sustainability information

As Malaysia’s corporate landscape includes a large number of NLCOs with varying scale, resources, and reporting capability, SSM proposes the qualifying thresholds and implementation timeline for sustainability reporting as set out in the table below.

Qualifying thresholds	Phase 1	Phase 2	Phase 3
RM1 billion - RM2 billion; or more than 500 employees	2028	2029	2032
RM100 million - RM1 billion; or 250 - 499 employees	2030	2031	-
RM15 million - RM100 million; or 100 - 249 employees	2032	2033	-
Below RM15 million or 100 employees	Not subject to sustainability reporting requirements but may opt in voluntarily

Assurance framework

An assurance framework ensures reliability and quality of sustainability reporting. SSM proposes a framework for Sustanability Assurance Providers (“SAPs”) be introduced under the CA 2016 by expanding the definition of “auditor” to include SAPs. As SAPs may provide such assurance, their qualifications should include the following:

• Degree or diploma from educational institutions recognised by the Malaysian Qualifications Agency or any other relevant professional qualifications;
• At least five years experience in conducting audit or assurance engagements; and
• Approved as sustainability assurance provider by the Minister.

SSM proposes a phased assurance timeline to ensure the appropriate standards and readiness of assurance providers to support the implementation as set out below.

Qualifying thresholds	Phase 1	Phase 2	Phase 3
RM1 billion - RM2 billion; or more than 500 employees	2028 - 2030	2028 - 2030	-
RM100 million - RM1 billion; or 250 - 499 employees	2030 - 2032	2030 - 2032	-
RM15 million - RM100 million; or 100 - 249 employees	2032 - 2034	2032 - 2034	-
Below RM15 million or 100 employees	Not subject to sustainability reporting requirements but may opt in voluntarily

Comment

By transitioning sustainability reporting into statutory compliance under the CA 2016, companies will see more accountability in their decisions relating to sustainability. The proposed amendments also align Malaysia’s reporting landscape with international standards, specifically IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information” and IFRS S2, which will allow companies to remain globally competitive.

Feedback on the consultative document should be provided before 2 June 2026 via email to Irpia@ssm.com.my. Alternatively, you may reach out to the Partners listed below to assist with providing feedback to SSM.

Further information

This article was prepared with the assistance of Senior Associate Kimberly Lim Ming Ying.