The Shift to Mandatory ESG Reporting in Southeast Asia: Singapore, Malaysia, and Thailand

Introduction

Environmental, Social, and Governance (ESG) has become a critical concept in contemporary corporate governance and financial regulation. The ESG compliance in Southeast Asia region is now no longer limited to voluntary corporate social responsibility, throughout the region the regulators are now moving towards for adopting the more strict and mandatory disclosure framework. Gradually, the market regulators began to recognise the importance of ESG regulations that they are not just merely ethical concerns but they also have financial material risks, for example the climate change can affect asset values, supply chain and the long-term profitability of the organisation. These real-world financial implications led to the gradual integration of ESG into a formal financial regulation and a corporate duty.

Singapore: The Clearest Compliance Model

Singapore has emerged as one of the leading countries in Southeast Asia in implementing mandatory ESG disclosure requirements. In Singapore regulatory market, there are two regulators, the first is Singapore Exchange Regulation (SGX RegCo), which regulates the company listed on stock exchange, the other one is Accounting and Corporate Regulatory Authority (ACRA), which regulates the non-listed companies. Together, both regulatory organisations enforce climate and sustainability disclosures in the country aligning with the International Sustainability Standards Board (ISSB). Last year, in August 2025, these regulators realised that the smaller companies were in pressure about the high cost of tracking carbon data, so they revised the timelines for certain climate reporting obligations, providing smaller businesses additional time to set up their systems.

Despite these additional timeline adjustments, all listed companies from the FY2025 are now required to disclose their Scope 1 (direct emissions from their own operations) and Scope 2 (indirect emissions from the electricity they use). These disclosures form the foundation of Singapore’s climate-first reporting approach and it shows the intention to improve transparency regarding the corporate environmental performance.

Tracking Scope 3 emissions is more challenging because companies need to collect emissions data from their suppliers and other entities across their supply chain, that’s why Scope 3 emissions reporting is being introduced gradually. Because of this, now from the FY2026, Scope 3 emissions reporting is mandatory only for the listed companies with large capitalisations on the stock market, known as Straits Times Index (STI), are now legally required to report Scope 3, while for smaller listed companies, it is voluntary for now. This phased approach allows companies to prepare for the new reporting requirements while at the same time also ensuring that investors receive more detailed information about climate-related risks and sustainability performance.

Malaysia: Moving Toward Mandatory Integration

Malaysia’s ESG reporting system is known as the National Sustainability Reporting Framework (NSRF), which was introduced by the Securities Commission Malaysia to foster the phased adoption of the ISSB Sustainability Disclosure Standards. To strengthen it, the Malaysia’s stock exchange Bursa Malaysia amended its listing rules and mandated the public companies adopt the global ISSB standards (IFRS S1 and IFRS S2).

Malaysia has adopted a phased approach towards sustainability reporting. The listed companies in Malaysia are divided in tiers, the largest corporations are in Group 1, the companies with a market capitalisation of RM 2 billion or more, were required to begin climate-related reporting from FY2025. From FY2026, the reporting requirements have also been applied on all the remaining Main Market listed issuers (Group 2), that they must start reporting climate-related information for financial years ending on or after December 31, 2026.

Bursa Malaysia in order to strengthen sustainability reporting and data collection, it introduced the Centralised Sustainability Intelligence (CSI) Platform. The platform aims to help companies submit and manage sustainability-related information more efficiently while at the same time also improving the accessibility, consistency, and transparency of sustainability data.

Thailand: The Integrated "56-1 One Report" System

In Thailand, the sustainability reporting is regulated by the SEC (Securities and Exchange Commission), Thailand. Last year, in November 2025, the SEC revised its sustainability disclosure principles in order to align it with the ISSB Standards, IFRS S1 and IFRS S2.

In other jurisdictions, the companies are required to publish separate sustainability reports, on the other hand, Thailand requires climate and sustainability disclosures to be incorporated in the annual filling of the company knows as the 56-1 One Report. These Thailand framework follows a climate-first approach, as it requires companies to primarily focus on reporting their Scope 1 and Scope 2 greenhouse gas emissions. To strengthen and improve the reliability of the sustainability disclosures, the emissions data are required to undergo independent verification by the assurance providers which are registered with the Thailand Greenhouse Gas Management Organization (TGO).

These implementations are being carried out in phases to fulfil the requirements, with the companies listed in the SET 50 Index are currently in their FY 2026 data-tracking period and they are expected to submit their first mandatory ISSB-aligned disclosures in 2027.

The Cross-Border Dilemma: Operational and Legal Challenges

Even though the growing adoption of ISSB Standards across Southeast Asia has improved consistency in sustainability reporting, the multinational companies are still facing several practical challenges in complying with different regulatory frameworks in the region. For the companies, one of the major difficulties is the collection of Scope 3 emissions data, as companies need to obtain information from the suppliers, logistics providers and other third parties which are involved in other operations. This process can be time consuming and costly, especially for the companies with complex international supply chains.

Furthermore, as ESG requirements are now increasingly becoming a mandatory regulatory practice from a voluntary practice, the companies must ensure that the data disclosed by them must be accurate and reliable.[i] In this regard, the ASEAN Taxonomy for Sustainable Finance plays a vital role in promoting a common understanding in the region for sustainable economic activities. As sustainability regulations will continue to evolve further, legal and compliance teams need to help companies to develop the reporting systems that can satisfy the requirements of multiple jurisdictions while also maintaining transparency and consistency in their disclosures.  

Conclusion

The ESG compliance practices are no longer a voluntary practice in Southeast Asia, as Singapore, Malaysia and Thailand are moving towards to align their framework with the ISSB standards. Each country has chosen a different way to apply the standards in practice. Singapore follows an index-based system through the Straits Times Index (STI), Malaysia uses a phased system based on the size of company and its market capitalisation, and Thailand has integrated sustainability reporting directly into the 56-1 One Report.

This shifts from voluntary practices to mandatory regulatory requirements and disclosure means that the companies now no longer can treat ESG reporting just casually, because inaccurate and unverified data can create legal and regulatory problems for the companies.

These developments may also guide other jurisdictions, including India, where the sustainability reporting framework Business Responsibility and Sustainability Report (BRSR) continue to evolve. As regulatory expectations continue to expand further in future, businesses need to strengthen their reporting systems and governance to ensure compliance with the regulatory requirements. Going forward, now the regulatory requirements cannot be just treated as a mere administrative task, the modern corporate legal practices must now treat environmental data tracking as an inseparable part of traditional corporate practices.

Author: Pranjal Gupta , in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Endnotes

1. Accounting and Corporate Regulatory Authority (ACRA) & Singapore Exchange Regulation (SGX RegCo), Joint Regulatory Announcement: Extended Timelines for Most Climate Reporting Requirements to Support Companies (25 August 2025). Available at: https://www.acra.gov.sg/news-events/news-announcements/887/

2. [1] Ibid

3. Ibid. See also ACRA Sustainability Roadmap Portal: https://www.acra.gov.sg/regulations/sustainability-reporting/requirements-timeline/

4. Advisory Committee on Sustainability Reporting (ACSR) & Securities Commission Malaysia, National Sustainability Reporting Framework (NSRF) (24 September 2024). Available at: https://www.sc.com.my/nsrf

5. Bursa Malaysia Berhad, Bursa Malaysia Introduces CSI Platform for Sustainability Disclosures (15 December 2025). Available at: https://www.bursamalaysia.com/trade/our_products_services/csip/overview

6. Securities and Exchange Commission, Thailand, SEC Revises Sustainability-Related Disclosure Principles to Align with ISSB Standards, Press Release No. 298/2025 (28 November 2025). Available at: https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=12309

7. Ibid. See also IFRS Foundation, Jurisdictional Snapshot: Thailand Sustainability Disclosure Roadmap (Updated Report). Available at: https://www.ifrs.org/content/dam/ifrs/publications/sustainability-jurisdictions/pdf-snapshots/thailand-ifrs-snapshot.pdf

8. ASEAN Taxonomy Board, ASEAN Taxonomy for Sustainable Finance Version 3 (Official Regional Framework), December 2024. Available at: https://asean.org/wp-content/uploads/2024/12/ASEAN-Taxonomy-Finalised-Version-3-4.pdf