What is ESG Reporting and why should I start disclosing?

ESG reporting or disclosure is the process of reporting on your company’s environmental, social, and governance (ESG) performance. Disclosing your ESG metrics can help your company:

  • Increase trust and confidence from your stakeholders by promoting transparency and accountability.
  • Attract more investors from the sustainable finance space and increase your access to new financing opportunities.
  • Identify and mitigate ESG risks that can pose an operational or financial risk for your business in the short term or long term.
  • Gain a competitive advantage and ensure that you are ahead of the rapidly evolving ESG-related regulations. 

What is the Simplified ESG Disclosure Guide (SEDG)?

Developed by Capital Markets Malaysia (CMM) and the Securities Commission (SC), the Simplified ESG Disclosure Guide (SEDG) for SMEs is a guide that can help your company decide what Environmental, Social, and Governance (ESG) disclosures to track and report. 

Instead of having to navigate multiple ESG disclosure standards, the guide aims to provide SMEs with a simple and standard set of disclosures to track and report. Understanding that each SMEs might be in different stages of their journey, the SEDG allows SMEs to choose what to disclose based on their maturity level (Basic, Intermediate, Advanced). In total, the SEDG covers 15 topics across 3 pillars, Environmental, Social, and Governance. 

Source: SEDG Guide 

How can I adopt the SEDG?

Follow these steps to begin your ESG disclosure process using the SEDG: 

  1. Review the full map of disclosures. The full map of 35 disclosures can be found in the SEDG guide. 
  2. Choose what to disclose based on your sustainability maturity level:
    • Basic Disclosures Only: You’re just starting your sustainability journey and this is your first disclosure.
    • Basic & Intermediate Disclosures: You’re 1-2 years in your sustainability journey and you have some experience with ESG metrics
    • All Disclosures (Basic, Intermediate and Advanced): You are 3-4 years in your sustainability and you are fully familiar with ESG metrics
  3. Tick off the disclosures that you can already report now
  4. Identify those you will work on in the next one year
  5. Refer to the additional guidance on what to report
  6. Track and report your disclosures using the template provided or report digitally through Funding Societies’ ESG partner, the ESGpedia platform by STACS. 

Additional information

Funding Societies is proud to be part of Capital Market Malaysia’s Simplified ESG Disclosure Guide (SEDG) Adopter Programme. As an SEDG adopter, Funding Societies encourages SMEs to adopt the SEDG to help ease their ESG reporting process. 

Funding Societies also partners with STACS to utilise STACS’s ESGpedia platform to support ESG reporting and sustainable financing solutions for MSMEs in Indonesia and across ASEAN. STACS ESGpedia is Asia’s leading ESG data and technology company. Its platform ESGpedia has deep expertise in data management, carbon accounting, and ESG reporting, to help financial institutions and companies achieve their respective decarbonisation and sustainability goals. 

For more information on Funding Societies’ sustainability initiatives please visit fundingsocieties.com.my/sustainability

For more information or any inquiries on the SEDG, please visit sedg.capitalmarketsmalaysia.com or contact general@capitalmarketsmalaysia.com 

For more information about STACS or the ESGpedia platform, please visit www.stacs.io & www.esgpedia.io