Spotlight on sustainability:

Gaps in sustainability reporting

Spotlight on sustainability: Gaps in sustainability reporting
  • Report
  • 5 minute read
  • June 2024

Drawing from our experience in reviewing and assuring sustainability reports, we identify where gaps in sustainability reporting may lie, before diving deeper into the issues behind these challenges.

As sustainability and climate targets gain importance, there is a growing call for trust and assurance over these non-financial data. 

As of May 2024, our analysis indicates that 38% of the Top 100 listed companies on Bursa Malaysia have subjected their recent sustainability reports or statements to independent assurance, a significant increase from 21% in the previous year.

With regulation over this information is continuously increasing, this publication aims to highlight common pitfalls in sustainability reporting and provide some insights on how to mitigate these gaps for better reporting.

Common challenges

To fully capture the scope and impact of your sustainability initiatives, your organisation must tackle these common challenges:

Common pitfalls in sustainability reporting

1) Organisations often lack clarity on methodology and data quality when reporting sustainability indicators

In September 2022, Bursa Malaysia issued its Sustainability Reporting Guide (3rd Edition) which mandates the reporting of 22 common sustainability indicators across 11 sustainability matters. 

Reporting of the sustainability indicators has often been conducted under various frameworks, such as the Global Reporting Initiative (GRI) Standards; Sustainability Accounting Standards Board (SASB) Standards; and Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. 

The challenge: companies have had the flexibility to use the reporting framework of their choice ever since sustainability reporting was made compulsory for listed companies in 2016. Each of these frameworks come with its own practices and methodologies. This would make it difficult to compare one company’s sustainability indicators to another, if the two businesses did not specify the reporting framework used. 

Hence, organisations should formalise how data will be collected and reported on sustainability indicators. This clarity of methodology is crucial to ensure reporting consistency across organisations.

What are examples of common material matters that require reporting by Bursa Malaysia? 

Emissions management

  • Scope 1 emissions in tonnes of CO2e
  • Scope 2 emissions in tonnes of CO2e
  • Scope 3 emissions in tonnes of CO2e (at least for the categories of business travel and employee commuting)

Health and safety

  • Number of work-related fatalities
  • Lost time incident rate
  • Number of employees trained on health and safety standards


  • Percentage of employees who have received training on anti-corruption by employee category
  • Percentage of operations assessed for corruption-related risks
  • Confirmed incidents of corruption and action taken

What should be considered when reporting these indicators?


  • What is the source data required for reporting?
  • Are the data sources readily available?
  • Can the data be traced to supporting documents?


  • How should the information be computed?

  • Is the basis of computation consistent across the organisation/group of companies?
  • Is the basis of computation consistent with market practice?


  • How should these indicator be presented in the sustainability report? 
  • Are narrative explanations required to explain the sustainability performance?
  • Could the presentation and disclosure potentially be misleading, contribute to greenwashing?

2) Insufficient accountability of the performance and the reporting of sustainability targets is a missed opportunity for value creation

Today, stakeholders have higher expectations of sustainability practices - they want to see measurable outcomes and constant improvements. This sets a higher bar for organisations to reach towards when disclosing net zero and sustainability targets. 

However, having supported many Malaysian organisations with their sustainability reporting efforts, we have observed that clear accountability on sustainability performance remains a common challenge. This is because monitoring and reporting sustainability performance is often done sporadically and informally. 

Incorporating sustainability key performance indicators (KPIs) into performance management presents significant opportunities for value creation. By integrating these KPIs into organisational frameworks, companies can better align their operations with sustainability objectives, enhance accountability and cultivate a culture of continuous improvement.

Similar to financial reporting, tracking and reporting on these non-financial metrics should be aligned with the Committee of Sponsoring Organisations of the Treadway Commission (COSO) Internal Control Integrated Framework, as outlined below. 


of FTSE 100 companies now have an ESG measure in executive pay


of board members and senior executives agree that strong ESG performance contributes to organisational value and/or financial performance

3) Manual reporting processes highlight the urgent need for technology investment

Findings from our 2023 Finance Function Survey Report show that only 10% of respondents indicated that their existing ESG data is integrated within the organisation’s Enterprise Resource Planning (ERP). This highlights a notable technology gap in managing ESG data. 

The prevalence of manual reporting processes for sustainability data, which often relies on spreadsheets, poses risks of data manipulation and inaccuracies. This emphasises the urgent need to invest in technology. 

Digital tools would not only improve the speed and accuracy of the reporting process; they could also help leadership incorporate ESG data into strategic decision-making across the organisation.

Only 6%

provide sustainability analytics and insights beyond historical ESG KPIs and conduct scenario analyses over climate risk together with its financial impacts

Only 10%

have ESG data maintained as part of the organisation’s ERP system

Taking the lead on sustainability reporting


Set a clear reporting methodology

A clear reporting methodology should be adopted within an organisation, which will form the basis of how the data should be collected and reported.


Establish a clear line of responsibility and accountability

A clear SOP will ensure that there is accountability over ownership, with designated roles for collecting, analysing and reporting sustainability data. 


Unlock value with human-led, tech-enabled sustainability reporting

Robotic Process Automation (RPA) and analytics are key to realising the full value of investor-grade ESG data. 

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Contact us

Dominic Chegne

Dominic Chegne

Partner, Risk Services, PwC Malaysia

Tel: +60 12 332 2300

Kwai Fong Soo

Kwai Fong Soo

Partner, Assurance, PwC Malaysia

Tel: +60 (3) 2173 0774

Nik Shahrizal Sulaiman

Nik Shahrizal Sulaiman

Partner, Risk Services, PwC Malaysia

Tel: +60 19 650 7305

Farhana Jabir

Farhana Jabir

Director, Risk Services and Sustainability & Climate Change, PwC Malaysia

Tel: +60 (3) 2173 0970