Most Malaysian companies should use the ISSB standards (IFRS S1 and S2) as their primary framework, because Malaysia's National Sustainability Reporting Framework (NSRF) and Bursa Malaysia's listing requirements are built on them. GRI remains a useful complement for broader stakeholder reporting, while TCFD no longer exists as a standalone requirement, since its recommendations are now embedded in IFRS S2.

The choice has become simpler than it was a few years ago, but confusion persists because the three names are still used side by side. Malaysia launched the NSRF in September 2024, and Bursa Malaysia amended its Main Market and ACE Market listing requirements on 23 December 2024 so that sustainability statements follow IFRS S1 and S2 in phases. Large listed issuers began first, with remaining Main Market issuers and ACE Market issuers following in later years, and transition reliefs apply. This article explains what each framework does, how they differ, which one fits different Malaysian companies, where an ESG consultant adds value and where experts disagree.

What Is the ISSB and Why Does It Matter for Malaysian Companies?

The International Sustainability Standards Board (ISSB) issues global sustainability disclosure standards focused on information that affects a company's enterprise value. It matters in Malaysia because the NSRF adopts IFRS S1 and IFRS S2 as the national baseline for listed companies and, in time, large non-listed companies.

What Do IFRS S1 and IFRS S2 Cover?

IFRS S1 sets general requirements for disclosing sustainability-related risks and opportunities that could reasonably affect a company's prospects. IFRS S2 covers climate-related disclosures, including governance, strategy, risk management, metrics and targets, and greenhouse gas emissions across Scopes 1, 2 and 3. Companies in the early phases often concentrate on climate disclosures before addressing the full scope of IFRS S1.

Who Must Use the ISSB Standards in Malaysia?

Approximately 130 large Main Market issuers, representing over 80% of Bursa Malaysia's market capitalisation, form the first group, with other Main Market issuers, ACE Market issuers and large non-listed companies following in later phases. Entities outside the mandatory scope may adopt the standards voluntarily, and smaller companies in supply chains may be asked for ISSB-relevant data by their customers.

What Is GRI and When Is It Still Relevant?

The Global Reporting Initiative (GRI) publishes widely used standards that help organisations report their impacts on the economy, environment and people for a broad range of stakeholders. It is still relevant in Malaysia for companies that want to show their wider impact, respond to community and civil society expectations or maintain existing reporting practice.

How Does GRI's Approach Differ?

GRI emphasises impact materiality, meaning the effects a company has on the world, while the ISSB emphasises financial materiality, meaning the sustainability matters that affect the company's value. A company can need both perspectives, particularly in sectors with significant social or environmental footprints such as plantations, mining and manufacturing.

Can GRI and ISSB Be Used Together?

Yes. Many companies use the ISSB standards for the mandatory sustainability statement and GRI for a fuller standalone report. Reports indicate that the Securities Commission has signalled interest in interoperability between the two, and GRI and the IFRS Foundation have announced collaboration to align their work. Companies should map their disclosures to avoid duplication and keep definitions consistent.

What Happened to TCFD?

The Task Force on Climate-related Financial Disclosures (TCFD) completed its work in 2023, and its recommendations have been absorbed into IFRS S2, with monitoring responsibility passing to the IFRS Foundation. In practice, companies that built TCFD-aligned reports have a head start on IFRS S2.

Is TCFD Still Required in Malaysia?

Not as a standalone requirement. Malaysia previously encouraged TCFD-aligned climate disclosures through Bursa Malaysia's guidance, but the NSRF moves listed companies to IFRS S2, which builds on the same four-pillar structure of governance, strategy, risk management and metrics and targets. Some companies still mention TCFD for continuity, but ISSB is the operative standard.

How Can a TCFD-Based Report Be Upgraded?

Map the existing TCFD content to IFRS S2 requirements, fill gaps such as industry-based metrics, Scope 3 emissions and more detailed scenario analysis, and strengthen data controls. An ESG consultant can help perform this gap analysis, though many companies with existing TCFD reports can start internally.

How Do GRI, ISSB and TCFD Compare?

ISSB is investor-focused and now the Malaysian regulatory baseline, GRI is stakeholder-focused and voluntary, and TCFD is a retired recommendation set now embedded in ISSB. The table summarises the key differences.

Which Framework Is Most Detailed?

GRI offers the broadest topic coverage, while the ISSB standards are more prescriptive on climate and financial linkages. Detail alone is not the test, since the best framework is the one that serves the report's purpose and legal requirements.

Which Framework Should Different Malaysian Companies Use?

The right framework depends on the company's status and audience: use ISSB if you are in scope or serving investors and lenders, add GRI for broader stakeholder reporting, and use simplified guidance if you are a small supplier. Most companies need a primary framework and optional extensions.

What Should Large Listed Companies Use?

Large listed companies should use IFRS S1 and S2 as their primary basis, since these are the regulatory standards, and may add GRI for a wider impact report. They should plan for assurance expectations, which are being phased in, and for Scope 3 requirements that arrive later.

What Should ACE Market Companies and Mid-Sized Firms Use?

These companies should prepare for ISSB-based reporting on the timeline that applies to them, starting with climate data and governance disclosures. Building the emissions inventory and data systems early reduces last-minute pressure and cost.

What Should SMEs and Suppliers Use?

SMEs outside the mandatory scope can use simplified resources such as the Simplified ESG Disclosure Guide (SEDG), designed for companies in the supply chain of listed issuers, and respond to customer requests with consistent data. Adopting full frameworks may not be proportionate unless a lender or investor asks for it.

What Should Exporters and Multinational Suppliers Consider?

Exporters should check customer and market requirements, which may include other regimes such as the European Union's sustainability reporting rules. These requirements have been evolving, so verify the current position before committing resources. Aligning data to ISSB and keeping GRI-style impact information can help meet different requests.

When Does a Company Need an ESG Consultant to Choose and Implement a Framework?

A company needs an ESG consultant such as Wellkinetics when it must interpret overlapping requirements, build a reporting process from scratch, prepare for assurance or reconcile ISSB and GRI content. For companies with a capable sustainability or finance team, targeted support may be sufficient.

What Can an ESG Consultant Do in This Area?

An ESG consultant can run a gap analysis against IFRS S1 and S2, map existing GRI or TCFD content, design data collection, advise on materiality assessment, prepare drafts and train staff. A good ESG consultant will recommend the simplest approach that meets the requirement, not the most elaborate.

How Should Companies Scope the Work?

Define which entity, period and framework apply, agree who owns the data and sign-off, and ask for deliverables you can maintain after the engagement. Request itemised quotes and clarify whether assurance support is included.

Do Experts Agree on Which Framework Is Best?

No. Views differ on whether a single investor-focused standard is sufficient, how much burden it places on smaller companies and how GRI and ISSB should coexist. Each position has a rationale.

What Do Supporters of ISSB Argue?

Supporters argue that a single global baseline improves comparability, reduces duplication and makes disclosure decision-useful for investors. They also note that Malaysia's alignment can support access to international capital.

What Do Supporters of GRI Argue?

Supporters argue that impact reporting remains essential, since a narrow financial lens can miss harms that affect communities and the environment. They point to sectors where social and environmental impacts are central to legitimacy.

What Do Cautious Voices Argue?

Some argue that companies, especially smaller ones, face heavy compliance burdens and that phased timelines and simplified guides are important. Others warn that reporting multiple frameworks can create duplication unless interoperability improves.

What Is the Practical Middle Ground?

The practical middle ground is to meet the mandatory standard first, then add stakeholder-focused content where it serves a clear purpose. Keeping one consistent data set behind all reports reduces cost and errors.

Frequently Asked Questions About GRI, ISSB and TCFD in Malaysia

Is GRI still accepted in Malaysia?

Yes, as a voluntary standard. Listed companies must still meet the mandatory sustainability statement requirements based on IFRS S1 and S2, but may publish GRI-referenced reports alongside.

Do I need to use TCFD if I already use ISSB?

No. IFRS S2 incorporates the TCFD recommendations, so a separate TCFD report is not needed for compliance, though existing TCFD work can be reused.

Are unlisted companies required to use ISSB?

Generally not, except large non-listed companies that meet prescribed thresholds in later phases. Others may still be asked by customers or lenders for ISSB-aligned data.

Does ISSB require Scope 3 emissions?

IFRS S2 includes Scope 3, but the NSRF phases and provides reliefs for it, so timing depends on the company's group. Confirm the requirement that applies to your entity.

Do I need an ESG consultant to choose a framework?

Not always. If your obligations are clear, internal teams can follow the guidance. An ESG consultant helps with complex situations, multiple frameworks or tight timelines.

Conclusion

The bottom line is to use ISSB (IFRS S1 and S2) as the primary framework if you are in scope or serve investors, add GRI where wider stakeholder reporting is valuable, retire standalone TCFD reporting and engage an experienced ESG consultancy firm for complex or time-critical work. Match the framework to the audience and the legal requirement.

The debate about breadth versus focus will continue, and both investor-oriented and stakeholder-oriented views contribute something. Malaysian companies that keep a single reliable data set, follow the phased timeline that applies to them and use an ESG consultant selectively will be well placed to meet regulators, investors and customers without unnecessary duplication.

This article is for general information only and is not legal, financial or regulatory advice. Reporting requirements and timelines are evolving, so verify current details with the Securities Commission, Bursa Malaysia and the relevant standard-setters.