PETALING JAYA: Capital Markets Malaysia (CMM), an affiliate of Securities Commission Malaysia (SC), today launched enhanced environment and social disclosure guidelines for small and medium enterprises in the supply chains of five significant sectors in Malaysia’s economy – energy, transport and logistics, construction and real estate, agriculture and manufacturing.
The sector guides are an extension of the Simplified ESG Disclosure Guide (SEDG), released by CMM on Oct 18, 2023, to provide SMEs with a streamlined and standardised set of ESG disclosures expected of companies operating within global supply chains.
Malaysia is the first country to have issued a disclosure guidance for SMEs aligned with the various global and local ESG disclosure frameworks to encourage more SMEs to adopt ESG reporting best practices as the nation collectively strives to transform and elevate its economy locally and internationally.
The newly introduced sector guides were developed in response to feedback gathered by CMM during its public and market consultations with multiple stakeholder groups, including multinational companies, public-listed companies, SMEs, and regulatory and policy stakeholders. The intention is to address the need for additional guidance around the disclosure expectations specific to SMEs in these five key sectors.
SC and CMM chairman Datuk Seri Dr Awang Adek Hussin said, “The complexity and challenges of doing business locally and internationally are not showing any signs of tapering. Instead, there is increasing scrutiny on companies and businesses especially those operating in global supply chains, and our SMEs are most vulnerable. The SEDG was launched last year in response to the challenges highlighted by SMEs in our earlier engagement with market stakeholders.”
Today, he added, CMM is enhancing the guidance to ensure that SMEs within the sectors are prepared and equipped to mitigate industry-specific vulnerabilities and, at the same time, keep up with the magnitude of change required to meet national and global standards.
“The industries prioritised in the sector guides are based on the significance of their respective contribution to Malaysia’s gross domestic product, economic participation and impact. For this purpose, the sector guides offer a more comprehensive and detailed attention to environmental and labour-related disclosures,” Awang Adek said.
CMM general manage Navina Balasingam commented, “While the SEDG was designed with broad applicability, the release of the SEDG sector guides comes at a crucial period where global agencies and regulatory bodies are widening their ESG focus on nature-related risks and human rights responsibilities. The sector guides are a timely resource that hone in on the material environmental and social considerations for SMEs across these five industries.
She expressed confidence that the sector guides will have a similar impact in helping companies within these five sectors to respond to the enhanced disclosures required of their stakeholders.
