Modernising the Ledger: Malaysia’s Accounting Regulator Pushes Profession Toward Transparency and Tech
In a quiet university lecture hall, final-year accounting student Aina flips through her textbook on lease accounting and revenue recognition. She frowns.
“There’s nothing here about carbon credits or sustainability disclosures,” she says.
Her frustration mirrors a bigger structural problem. Across Malaysia, young graduates and mid-career accountants are confronting a reality: the ESG rulebook has been rewritten, and the pace of change is accelerating far faster than the profession’s ability to adapt.
The New Mandate: ESG Moves From Optional to Obligatory
In the past two years, Bursa Malaysia and the Securities Commission (SC) have advanced sweeping sustainability disclosure requirements. Starting 1 January 2025, large public-listed companies must comply with IFRS S1 (general sustainability-related disclosures) and IFRS S2 (climate-related disclosures) — standards set by the International Sustainability Standards Board (ISSB).
Unlike traditional CSR statements, these rules require:
• Detailed climate risk management disclosure
• Carbon emissions tracking (Scope 1, 2, and where material, Scope 3)
• Quantifiable environmental targets with performance metrics
• Auditor review and public investor reporting
“These are no longer feel-good paragraphs in the annual report,” says the sustainability head at a KL logistics company. “They’re hard KPIs that can decide whether you get financing.”
Understanding the Frameworks
GRI (Global Reporting Initiative): The most widely used sustainability reporting standards globally, covering economic, environmental, and social impacts. GRI focuses on the principle of materiality — reporting issues that matter most to stakeholders.
TCFD (Task Force on Climate-related Financial Disclosures): A framework championed by the G20, focusing specifically on climate risk governance, scenario analysis, and financial impact disclosure. It’s closely aligned with investor demands for clarity on climate resilience.
IFRS S1 & S2: The newest global standards from ISSB.
• S1 sets a universal baseline for all sustainability-related disclosures.
• S2 goes deeper into climate, requiring data on transition plans, risk management, and detailed greenhouse gas accounting.
These frameworks are increasingly interlinked — many Malaysian companies will need to apply all three in parallel to meet investor and regulatory expectations.
The Gap: Education Trails Behind Regulation
Malaysia’s accounting syllabus remains heavy on traditional topics — depreciation schedules, lease treatment — but light on sustainability literacy. ESG topics, if taught at all, are often electives with no real integration into core modules.
Aina only learned about “materiality mapping” during her internship. She’s not alone. Mid-career accountants report scrambling to self-learn ESG through webinars, LinkedIn articles, or in-house training.
A 2025 ACCA Global Talent Survey found 71% of Malaysian accountants want to work in sustainability-related roles, but few have formal ESG qualifications. The talent bottleneck is pushing firms to promote staff into ESG reporting roles with minimal preparation.
“I became the ‘carbon accountant’ because I was the only one in finance who had read about Scope 3,” says one manufacturing finance manager.
Market Pressure: Demand is Outpacing Supply
Investors are making it clear: ESG performance affects capital access. Bank Negara Malaysia has already signaled that future lending terms may incorporate climate risk data. Asset managers are screening companies not just on profit, but on verified sustainability metrics.
Reddit threads and LinkedIn discussions reveal many Malaysian ESG professionals learning “on the job” while juggling compliance deadlines. In practice, this means a steep learning curve, high burnout risk, and inconsistent reporting quality.
The Corporate Response: Training at Speed
Global accounting firms KPMG, PwC, and Deloitte are offering ESG bootcamps and certifications like the Certificate in Sustainability for Finance (CertSF) and Integrated Reporting Certificate. MIA and ACCA are updating professional modules to include sustainability assurance and climate risk disclosures.
But the clock is ticking. Under Malaysia’s National Sustainability Reporting Framework (NSRF), even medium-sized listed companies and large private firms must align with IFRS S1/S2 by 2027.
Failure to comply risks more than regulatory penalties — it could mean exclusion from supply chains and loss of investor confidence.
Beyond Compliance: The Accountant of the Future
This shift is not merely about ticking boxes. The accountant of the future will need to be:
• Data analysts — interpreting emissions data and performance metrics
• Risk advisors — identifying vulnerabilities in climate transition plans
• Sustainability communicators — explaining ESG impact to investors and boards
For Malaysia, the stakes are high. Without rapid upskilling, the country risks falling behind in the trillion-dollar global ESG economy.
Aina has already registered for a Big Four sustainability workshop. “It’s scary,” she admits. “But it’s also exciting — we’re learning to measure impact, not just profit.”
Key Takeaways
- ESG reporting is now mandatory — IFRS S1/S2 standards require Malaysian companies to disclose detailed sustainability and climate data starting 2025.
- Severe skills gap — Universities and mid-career accountants lack adequate ESG training, creating a shortage of qualified sustainability professionals.
- Urgent need for upskilling — Firms, regulators, and accountants must act quickly to meet the 2027 compliance deadline and remain globally competitive.
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Shukri Yusof & Co. (Synco) is a member firm of the Malaysian Institute of Accountants, also known as the Malaysian Institute of Chartered Accountants. Our commitment is to deliver results that exceed expectations with utmost effectiveness and efficiency.
