How to Prepare for Bursa's Mandatory Climate-Related Disclosures.

How to Prepare for Bursa's Mandatory Climate-Related Disclosures.

Reading Time: ~12 minutes

Key Takeaway: Bursa Malaysia’s new climate-related disclosure rules are here to stay. Understanding what’s required—and preparing early—can save your company time, stress, and potential non-compliance penalties while improving investor confidence.

Introduction

Problem — Agitate — Solution (PAS)

Problem: Bursa Malaysia’s push for mandatory climate-related disclosures has many companies scrambling. The new rules sound technical—climate risks, emissions data, governance frameworks—and for many businesses, it’s unclear where to start.

Agitate: Without proper preparation, companies risk missing deadlines, providing weak reports, or facing scrutiny from investors and regulators. Beyond compliance, poor disclosure could signal that your business isn’t serious about sustainability.

Solution: Don’t panic. This article, “How to Prepare for Bursa's Mandatory Climate-Related Disclosures,” will guide you step by step. You’ll learn what Bursa requires, why it matters, and how your business can meet the standards efficiently while building a stronger sustainability foundation.

Summary Box

Topic	Details
Regulation	Bursa Malaysia’s Mandatory Climate-Related Disclosures (aligned with TCFD)
Applies To	All listed companies (phased implementation starting 2025)
Purpose	Improve transparency on climate risks, governance, and sustainability
Focus of This Guide	How to Prepare for Bursa's Mandatory Climate-Related Disclosures
Outcome	A clear roadmap to compliance and stronger ESG performance

Why Bursa’s Climate Disclosure Rules Matter

Bursa Malaysia’s move aligns with global trends in climate accountability. Investors, regulators, and customers now expect companies to show how they’re managing climate risks and emissions—not just talk about sustainability.

By following How to Prepare for Bursa's Mandatory Climate-Related Disclosures, you’ll not only meet legal obligations but also build trust, attract investment, and future-proof your business.

These disclosures are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework—a globally recognized model that emphasizes four main pillars:

Governance – How your board and management oversee climate-related risks.
Strategy – How climate risks and opportunities impact your business strategy.
Risk Management – How you identify, assess, and manage climate risks.
Metrics & Targets – How you measure and monitor performance over time.

What Are Mandatory Climate-Related Disclosures?

Bursa’s framework requires listed companies to publicly disclose information related to:

Greenhouse Gas (GHG) Emissions: Scope 1, 2, and later Scope 3.
Climate Risks & Opportunities: Physical and transition risks that may affect operations.
Governance: Roles and responsibilities of the board and management.
Strategy: Integration of climate issues into long-term planning.
Metrics & Targets: Quantitative goals for emissions and climate performance.

This ensures that investors and stakeholders can see how resilient your business model is in a low-carbon future.

How to Prepare for Bursa's Mandatory Climate-Related Disclosures

Let’s walk through the practical steps on How to Prepare for Bursa's Mandatory Climate-Related Disclosures, written in simple language.

Step 1: Understand the Timeline

Bursa Malaysia’s implementation will be phased in between 2025 and 2027:

Company Type	Effective Year	Disclosure Requirement
Main Market Large Cap	2025	Full TCFD-aligned disclosure
Main Market Mid Cap	2026	Partial disclosure (phased)
ACE Market	2027	Simplified disclosure framework

Understanding your company’s timeline helps you plan resources and build readiness gradually.

Step 2: Build Awareness and Internal Capacity

Climate disclosure involves multiple departments—finance, operations, sustainability, risk, and strategy.

Here’s how to build capacity:

Conduct internal training on TCFD principles.
Form a cross-departmental task force led by sustainability or risk management teams.
Engage top management early so climate reporting becomes a strategic agenda.

Without this foundation, your disclosures may lack accuracy and credibility.

Step 3: Map Your Climate Risks and Opportunities

Climate risks come in two main types:

Physical Risks:
- Floods, heatwaves, or droughts that disrupt operations.
- Example: A factory near a flood-prone area faces higher downtime and repair costs.
Transition Risks:
- Policy changes, carbon taxes, or customer shifts toward greener products.
- Example: A manufacturer dependent on fossil fuels may face higher costs or loss of contracts.

Opportunities arise too—like energy efficiency, renewable adoption, or green financing.

By mapping these, you’ll understand where to focus your resources and disclosures.

Step 4: Establish Governance Structures

Strong governance is the backbone of good climate disclosure.
Here’s what you need to define:

Board Oversight:
- Assign responsibility for climate-related decisions.
- Example: The Board Sustainability Committee reviews climate performance quarterly.
Management Role:
- Assign specific teams to track metrics, implement initiatives, and report updates.
- Example: Energy or ESG Managers provide data to finance for disclosure.

Transparency in governance shows accountability—a key requirement under Bursa’s framework.

Step 5: Gather Data on GHG Emissions

You can’t manage what you don’t measure.
Start collecting reliable data for:

Scope 1: Direct emissions from owned assets (e.g., fuel use, boilers).
Scope 2: Indirect emissions from purchased electricity.
Scope 3: Upstream and downstream emissions (e.g., supply chain, logistics, product use).

Tools to use:

Utility bills, fuel logs, supplier data.
GHG calculation software (like GHG Protocol tools).

Even if Scope 3 isn’t mandatory at first, start preparing early—it’s often the biggest part of your carbon footprint.

Step 6: Conduct Scenario Analysis

Scenario analysis helps you test your business strategy against future climate conditions.

For example:

What happens if carbon prices rise to RM200/tonne?
How would prolonged droughts affect your supply chain?
What if customer demand shifts to low-carbon products?

Develop at least two climate scenarios—a best-case (low carbon transition) and worst-case (high emissions world)—to understand potential financial impacts.

Step 7: Integrate Climate Risks into Corporate Strategy

Climate disclosure isn’t just reporting—it’s about embedding sustainability into business decisions.

Link emissions targets to business KPIs.
Integrate energy efficiency into expansion plans.
Adopt renewable energy where possible.
Include climate risks in enterprise risk management (ERM).

Companies that do this early gain a strategic edge—investors see them as better prepared for future regulations and market changes.

Step 8: Set Metrics and Targets

Bursa’s framework requires measurable metrics and targets.
Examples include:

Energy intensity: kWh per unit of output.
GHG emissions per year: in tonnes of CO₂ equivalent.
Renewable energy use: percentage of total energy.
Carbon reduction targets: e.g., “Reduce Scope 1 & 2 emissions by 30% by 2030.”

Make sure your targets are SMART — Specific, Measurable, Achievable, Relevant, and Time-bound.

Step 9: Develop Your Climate Disclosure Report

Your final report should clearly explain:

Governance: Who oversees climate issues and how decisions are made.
Strategy: How climate risks and opportunities affect your business.
Risk Management: How climate-related risks are identified and mitigated.
Metrics and Targets: Data on energy, emissions, and progress toward goals.

Tips for clear reporting:

Use plain language—avoid jargon.
Use visuals like charts and graphs for better readability.
Align your format with Bursa’s sustainability reporting template.
Cross-reference with your Sustainability Statement in the annual report.

Step 10: Validate and Assure Your Data

Credibility matters. Bursa encourages third-party assurance to validate GHG data and climate statements.

Engage accredited verifiers to:

Review your emission calculations.
Confirm alignment with TCFD and Bursa guidelines.
Ensure transparency and accuracy.

Independent assurance builds confidence among investors and regulators.

Step 11: Continuous Improvement

After your first disclosure, don’t stop.
Treat it as a learning process and improve yearly:

Strengthen data collection systems.
Expand coverage to more facilities or supply chains.
Update climate targets as your business evolves.
Benchmark your performance against peers.

Companies that continuously improve often see operational savings, innovation, and improved stakeholder trust.

Benefits of Preparing Early

Getting ready now gives your company a head start. Here’s why early preparation matters:

Avoid Last-Minute Stress: No rush when deadlines approach.
Save Costs: Spreading efforts over time prevents budget spikes.
Enhance Reputation: Early compliance signals leadership.
Access to Green Finance: Banks prefer companies with transparent climate data.
Improved Efficiency: Data tracking helps identify waste and save energy.

Common Mistakes to Avoid

Mistake	Why It’s a Problem	How to Fix It
Waiting until the last minute	Rushed work leads to errors	Start at least 12 months early
Reporting without real data	Reduces credibility	Collect verified data
Treating it as CSR	Disclosures are financial, not charity	Link to business risks and value
Ignoring Scope 3 emissions	Misses major sources	Begin supplier engagement early
Lack of management buy-in	Creates silos and delays	Secure leadership commitment

Tools and Resources to Help You

Here are some tools and frameworks to make your journey smoother:

TCFD Knowledge Hub – Official resources and templates.
GHG Protocol – Standard for emissions calculation.
CDP (Carbon Disclosure Project) – Benchmarking platform.
Bursa Malaysia’s Sustainability Reporting Guide (3rd Edition) – Official reference for disclosure.
ISO 14064 / ISO 50001 – International standards that support GHG accounting and energy management.

Real-World Example

A Malaysian manufacturing firm began its climate journey in 2022. By collecting energy data, conducting a risk assessment, and setting emissions targets, it achieved:

12% energy savings in one year
Verified carbon inventory under ISO 14064
Improved ESG scores from investors

When Bursa’s mandatory rules were announced, the company was already compliant—no rush, no panic.

That’s the power of early preparation.

How to Engage Your Stakeholders

Effective climate disclosure requires collaboration:

Employees: Provide energy data and ideas.
Suppliers: Share emission data and adopt greener practices.
Investors: Communicate progress and strategy clearly.
Customers: Highlight low-carbon products and initiatives.

Stakeholder engagement ensures your climate strategy is practical, inclusive, and transparent.

Linking Climate Disclosures to Business Value

When done right, climate disclosures don’t just tick boxes—they add business value:

Better risk management means fewer surprises.
Efficient energy use lowers operating costs.
Transparent reporting attracts responsible investors.
Meeting global standards helps access export markets.

Climate readiness = business resilience.

Conclusion & Call to Action

You’ve just learned How to Prepare for Bursa's Mandatory Climate-Related Disclosures—from understanding the TCFD framework to collecting data, setting targets, and reporting with confidence.

The sooner you start, the smoother your transition will be. Don’t let climate disclosure feel like a burden—it’s an opportunity to strengthen your business for the future.

Need expert help getting started? WhatsApp or call 0133006284 today to discuss how your organization can prepare efficiently, meet Bursa’s requirements, and build a climate-ready future.

#TechikaraEngineering #BursaMalaysia #ClimateDisclosure #TCFD #SustainabilityReporting #ESGMalaysia #CarbonManagement #EnergyEfficiency #TechikaraEngineeringSdnBhd

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