New ESG Guidance for Malaysian Issuers

Guidelines are part of exchange initiative to help listed companies adopt best practices in governance and sustainability.

Bursa Malaysia has issued a second new guidebook for listed companies to help them better understand the importance of embedding ESG aspects in their governance frameworks.

The new guidebook is part of an initiative launched in March to steer listed companies towards higher performance levels by enabling them to access best practices and data insights, thus increasing their attractiveness to both domestic and foreign investors.

So far, 74 out of 972 listed companies have signed up to be part of the so-called PLC Transformation Programme, which is expected to run until 2025.

The first guidebook published under the initiative offers a framework for listed companies to become more purpose- and performance-driven, focusing on areas such as market strategy, enterprise governance and culture, and risk management.

The second guidebook, published on Friday (10 June), aims to help listed companies gain an “understanding and appreciation” of key areas that will support a more responsible and high-performing corporate Malaysia.

The new guidebook emphasises the need for listed companies to develop a well-defined ESG approach including by putting in place better governance, more effective management of environmental and social performance, and robust ESG practices across key functions of the organisation.

“Developing a comprehensive and robust ESG response is becoming increasingly crucial to enhance business resilience, and viewed as an important catalyst for long-term value creation,” said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.

“Guidebook 2 of the PLC Transformation Programme serves as a useful aid for companies in enhancing ESG best practices across the organisation. The Exchange strongly encourages PLCs to reflect upon, and step up their adoption of the best practices espoused in the series of guidebooks, which is reflective of the emerging expectations from stakeholders.”

The guidebook encourages listed companies to address ESG concerns that materially impact their business operations and longer-term prosperity. These include areas such as climate-related risks, human rights, labour practices, and accountability among senior management and directors.

Another three guidebooks are expected to be released in 2022.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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