Environmental, Social and Governance Compliance Framework Template for Malaysia

An Environmental, Social and Governance Compliance Framework helps Malaysian organizations track and meet their sustainability commitments. It sets clear standards for managing environmental impacts, social responsibilities, and corporate governance practices in line with Bursa Malaysia's listing requirements and the Securities Commission's guidelines.

The framework guides companies through key areas like carbon emissions, workforce diversity, community engagement, and board transparency. It includes monitoring tools, reporting templates, and compliance checklists that help businesses align with Malaysia's sustainable development goals while protecting stakeholder interests. This structured approach makes ESG compliance more manageable and helps companies build trust with investors and regulators.

Public-listed companies in Malaysia need an Environmental, Social and Governance Compliance Framework when preparing for Bursa Malaysia's mandatory ESG reporting requirements. It's particularly crucial during annual reporting cycles, merger discussions, or when seeking sustainable investment funding.

The framework becomes essential for companies expanding operations, facing environmental scrutiny, or managing community relations challenges. It helps track sustainability metrics, demonstrate regulatory compliance, and respond to stakeholder concerns effectively. Many Malaysian corporations also use it when developing green initiatives, improving board diversity, or enhancing their ESG ratings for international investors.

• Basic ESG Framework: Focuses on fundamental compliance with Bursa Malaysia's listing requirements, including environmental impact tracking, social responsibility reporting, and governance disclosures.
• Industry-Specific Framework: Tailored for sectors like manufacturing, finance, or palm oil, with specialized metrics and compliance requirements unique to each industry.
• Comprehensive Corporate Framework: Extensive version covering advanced ESG metrics, stakeholder engagement protocols, and detailed risk management strategies.
• SME-Focused Framework: Simplified structure for smaller Malaysian businesses, emphasizing practical sustainability measures and basic governance standards.
• International Standards Framework: Aligns with global reporting standards while maintaining compliance with local regulations.

• Board of Directors: Responsible for approving and overseeing the framework's implementation, ensuring alignment with corporate strategy and risk management.
• ESG Committee Members: Drive framework development, monitor performance metrics, and coordinate reporting across departments.
• Compliance Officers: Ensure the framework meets Bursa Malaysia's requirements and maintain documentation for regulatory submissions.
• Department Heads: Implement framework requirements within their units and report on ESG metrics regularly.
• External Auditors: Verify framework compliance and provide independent assurance on ESG reporting accuracy.
• Stakeholders: Including investors, regulators, and community groups who rely on framework disclosures for decision-making.

• Current ESG Status: Review existing environmental policies, social initiatives, and governance structures across your organization.
• Regulatory Requirements: Gather Bursa Malaysia's listing requirements and Securities Commission guidelines on ESG reporting.
• Stakeholder Input: Collect feedback from key departments, board members, and major investors on ESG priorities.
• Industry Benchmarks: Research ESG frameworks used by similar Malaysian companies in your sector.
• Data Systems: Assess your capability to track and report ESG metrics regularly.
• Implementation Plan: Develop clear timelines, responsibilities, and resource allocation for framework rollout.
• Review Process: Establish internal validation procedures before finalizing the framework.

• Policy Statement: Clear commitment to ESG principles aligned with Bursa Malaysia's sustainability reporting guidelines.
• Environmental Metrics: Specific measurement protocols for carbon emissions, waste management, and resource consumption.
• Social Standards: Detailed policies on labor practices, community engagement, and human rights compliance.
• Governance Structure: Board oversight mechanisms, risk management procedures, and stakeholder engagement protocols.
• Reporting Framework: Standardized templates for ESG data collection and disclosure requirements.
• Compliance Mechanisms: Internal controls and monitoring systems for ESG performance tracking.
• Review Process: Regular assessment schedules and update procedures for framework effectiveness.

An Environmental, Social and Governance Compliance Framework differs significantly from a Corporate Social Responsibility Policy in several key ways. While both documents address sustainability and social impact, they serve distinct purposes in Malaysian corporate governance.

• Scope and Coverage: ESG frameworks provide comprehensive monitoring and reporting structures across environmental, social, and governance metrics, while CSR policies typically focus only on community engagement and social initiatives.
• Regulatory Compliance: ESG frameworks directly address Bursa Malaysia's listing requirements and Securities Commission guidelines, whereas CSR policies are generally voluntary commitments.
• Measurement Systems: ESG frameworks include specific performance indicators and reporting mechanisms, while CSR policies often outline general principles without detailed metrics.
• Stakeholder Accountability: ESG frameworks create formal accountability structures for board oversight and investor reporting, while CSR policies mainly guide corporate philanthropy and community programs.