How can two similar firms report very different carbon numbers yet comply?

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Firms Can Report Different Carbon Figures While Remaining Compliant Due to Lack of Standardisation

Two construction firms of identical size and operational scope can report vastly different carbon figures and still be considered fully compliant with current sustainability reporting mandates. This disparity arises because there is no established, localised carbon accounting framework specifically for the Malaysian construction sector. Consequently, there is no standardised protocol for measuring on-site emissions or a mandated methodology for deriving the carbon figures that appear in sustainability reports.
Absence of a Mandated Carbon Accounting Framework

The National Sustainability Reporting Framework (NSRF) requires public listed companies, including those in construction, to disclose sustainability information. However, the framework does not specify crucial details such as which emission factors should be used, which on-site activities need to be accounted for, or the precise methodology that governs the calculation of carbon emissions. This lack of specificity means that companies have considerable latitude in how they derive their carbon data, leading to potential inconsistencies.
Discrepancies in Scope 3 Emissions Reporting

A significant portion of a construction firm's carbon footprint lies within Scope 3 emissions, which encompass embodied carbon in materials like steel and concrete, as well as emissions from subcontractors and logistics. In Malaysia's 2023 reporting cycle, only 11 per cent of publicly listed companies disclosed any Scope 3 emissions, a figure considerably lower than the 39 per cent observed across the Asia-Pacific region. While Scope 3 disclosure will become mandatory for Group 1 firms from 2027, the current gap highlights a systemic data infrastructure problem rather than a mere communication issue.
Reliance on Modeled Data and International Benchmarks

Even when Scope 3 figures are reported, they are often based on modelled data rather than precise measurements. While CIDB's Embodied Carbon Inventory serves as a reference, it consolidates emission factors from various sources, prioritising local data where available. However, the limited number of material records (approximately 600) across a sector with thousands of specifications means that where local data is absent, the inventory defaults to international figures. These international figures are often calibrated to foreign manufacturing conditions and energy mixes, introducing a degree of approximation and potential inaccuracy when applied to the Malaysian context.
Unaccounted On-Site Construction Activities

A more significant omission is the lack of a standardised mechanism for quantifying carbon emissions from on-site construction activities. Globally, these activities, including fuel combustion from machinery, waste disposal, and temporary works, account for a substantial portion of the industry's total carbon footprint. In Malaysia, there is no consistent method for measuring these emissions, further contributing to the potential for widely divergent carbon reporting figures among otherwise similar firms, all while maintaining compliance with the current disclosure requirements.

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How can two similar firms report very different carbon numbers yet comply?

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