IFRS S1 & S2 Are Coming:
A Complete Implementation Roadmap for Main and ACE Market Listed Issuers

Frank Tam  |  December 2025

Highlights

The launch of the National Sustainability Reporting Framework (NSRF) signals a definitive shift in corporate Malaysia’s reporting landscape. While the headlines have focused on large cap companies, the framework actually sets a trajectory for all listed issuers on Bursa Malaysia. Whether you are a large conglomerate, a mid-sized Main Market player, or an ACE Market innovator, the destination is the same moving towards full adoption of the ISSB Standards (IFRS S1 & IFRS S2). However, your starting line and pace of travel will differ. Here is the comprehensive guide for Group 1, Group 2, and ACE Market issuers to navigate the upcoming transition.

Know Your Classification

The implementation timeline is tiered based on market capitalisation and market board.

Determine which category your company falls into:

  • Group 1: Main Market issuers with a market capitalisation of RM2 billion and above (as at 31 December 2024 or upon admission).
  • Group 2: All other Main Market issuers.
  • Group 3 (ACE Market): All ACE Market listed issuers.

The Master Timeline: When Do You Start?

Adoption is not immediate for everyone. The framework utilises a phased approach, meaning smaller companies have a longer runway to prepare data and systems.

Category First Financial Year Ending (FYE) for implementation of NSRF
Group 1
FYE ending on or after 31 December 2025
Group 2
FYE ending on or after 31 December 2026
ACE Market
ACE Market FYE ending on or after 31 December 2027

Note on Pre-Transition Reporting: Until your specific effective date arrives, you must continue reporting under the existing Bursa Malaysia sustainability framework.

Main Market (Group 2): Continue disclosing the “Common Sustainability Matters” and 3 years of data through FYE 2025.

ACE Market: Maintain current disclosures through FYE 2026. Notably, the requirement to provide TCFD-aligned disclosures (originally planned for 2027) has been disapplied to allow you to focus directly on preparing for IFRS S2.

The "Climate-First" Transition Strategy

Recognising that full IFRS compliance is a heavy lift, the NSRF allows all issuers to adopt a “Climate-First” approach during their initial years of adoption.

Regardless of whether you are Group 1, 2, or ACE, when you hit your effective date, you can utilise the following Additional Transition Reliefs (ATRs):

  1. Climate Only (IFRS S2): You are permitted to report only on climate-related risks and opportunities (IFRS S2). You do not need to apply IFRS S1 to non-climate matters (like social or governance issues) during the relief period;
  2. Principal Segments: You may limit your climate disclosures to your principal business segments, rather than covering all segments immediately,
  3. Scope 3 Deferral: You are not required to disclose Scope 3 (value chain) GHG emissions yet, unless mandated by other regulators.

How long do these reliefs last?

  • Main Market (Groups 1 & 2): Available for the first 2 financial years of adoption.
  • ACE Market: Available for the first 3 financial years of adoption.

What happens to non-climate sustainability matters?

A common question is “If we use the relief to report only on climate (IFRS S2), do we ignore other sustainability issues?”

No. While you transition to IFRS S2 for climate, you must continue to report on other material sustainability matters (e.g., labor practices, anti-corruption, diversity).

However, for FYE 2025, these non-climate matters will continue to be reported under the existing Bursa Malaysia “Common Sustainability Matters” framework, not yet under the full IFRS S1 methodology.

Data Readiness

  • Financial Effects: You must assess the financial effects of climate risks. However, the framework allows the use of “reasonable and supportable information available without undue cost or effort.” If your company lacks the necessary skills or capabilities, qualitative approaches (descriptive) are permitted over quantitative ones during this phase. (Application of Proportionality Mechanisms under ISSB standards)
  • Reporting Boundary: Ensure your sustainability data shares the same reporting boundary as your financial statements. This includes consolidated group data.

Moving Toward Assurance

Trust in data is as important as the data itself. The NSRF sets out a roadmap for mandatory reasonable assurance on Scope 1 and Scope 2 GHG emissions. This will move sustainability reporting closer to the rigour of financial auditing.

Category Category Mandatory Reasonable Assurance Begins
Group 1
FYE ending on or after 31 December 2027
Group 2
Group 2 FYE ending on or after 31 December 2028
ACE Market
ACE Market FYE ending on or after 31 December 2029

(Note: These dates are subject to final confirmation following further consultation by the ACSR through a dedicated sub-committee led by AOB.)

Actionable Steps for All Issuers

Even if you are in Group 2 or the ACE Market with years to spare, the complexity of IFRS S2 requires early action.

  • For Group 2 (Deadline: Dec 2026):

You should use 2025 to perform a “dry run.” Assess your data gaps against IFRS S2 requirements. Since TCFD-aligned disclosures are disapplied, pivot your resources immediately toward IFRS S2 gap analysis.

  • For ACE Market (Deadline: Dec 2027):

While you have the longest runway, you often have fewer resources. Use the PACE (Policy, Assumptions, Calculators, Education) resources provided by the Securities Commission to upskill your team without incurring high consultancy costs.

  • Governance Check:

Does your Board understand these timelines? The new framework requires a cross-functional approach involving finance, risk, and sustainability teams.

  • For Group 1

The FYE 2025 deadline represents a significant step up in compliance for Malaysia’s large listed issuers (Group 1). By leveraging the available transition reliefs specifically the “climate-first” approach, Group 1 companies can manage this transition effectively focusing resources on building robust climate data foundations before expanding to full IFRS S1 adoption in 2027.

Overview of Disclosure Requirements of Main Market and ACE Market Listed Issuers under amended Bursa Malaysia’s Listing Requirements

To help visualise the timeline, the following tables summarise the transition from the existing framework to full IFRS S1 & S2 adoption for different groups.

For Main Market

Implementation is split into two (2) groups based on market capitalisation.

For ACE Market

ACE Market issuers have a longer runway maintaining the current “Common Sustainability Matters” framework through FYE 2026.