What does the 11 per cent disclosure rate show?

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Disclosure Rate Highlights Gaps in Malaysian Construction Sector's Carbon Reporting

The 11 per cent disclosure rate for Scope 3 emissions among Malaysia's publicly listed companies in the 2023 reporting cycle indicates a significant deficiency in comprehensive carbon accounting within the construction sector. This figure stands in stark contrast to the 39 per cent observed across the broader Asia-Pacific region, underscoring Malaysia's lagging position in transparently reporting on its construction industry's substantial carbon footprint.
Limited Scope 3 Emissions Reporting

In the 2023 reporting cycle, only 11 per cent of publicly listed companies in Malaysia disclosed any Scope 3 emissions. This is considerably lower than the 39 per cent reported across the Asia-Pacific region, signalling a broad challenge in capturing and reporting the full spectrum of emissions generated by these firms. Scope 3 emissions, which encompass indirect emissions from sources like material extraction, transportation, and subcontractor activities, represent the most substantial portion of the construction industry's environmental impact.
Data Infrastructure Challenges

The low disclosure rate is not merely a matter of reporting choices but points to a fundamental data infrastructure problem. While Malaysia's construction sector is moving towards mandatory Scope 3 disclosure from 2027 for Group 1 firms, the current absence of a localised carbon accounting framework and standardised protocols for deriving emissions data creates a significant hurdle. The current reliance on modelled figures, rather than directly measured data, further exacerbates this issue, leading to a lack of verifiable and comparable information.
Reliance on Modeled Data and Incomplete Frameworks

Even when Scope 3 emissions are reported by Malaysian construction firms, these figures are often based on modelled data, raising questions about their accuracy and reliability. While initiatives like CIDB's Embodied Carbon Inventory aim to provide a reference, its limited scope, consolidating data from approximately 600 material records, is insufficient for a sector with thousands of specifications and varied conditions. Furthermore, the inventory often defaults to international figures when local data is unavailable, which may not accurately reflect Malaysian manufacturing processes and energy mixes.
Gaps in On-Site and Upstream Emissions

A critical omission in current reporting practices is the lack of standardised quantification for carbon released from on-site construction activities, such as fuel combustion from machinery and waste disposal, which globally accounts for 37 per cent of the industry's total carbon footprint. Additionally, the current reporting framework, the NSRF, mandates disclosure but offers no specific guidance on emission factors, on-site activities to be accounted for, or methodologies to be used. This lack of standardised guidance means that firms can report vastly different figures while remaining compliant, undermining the comparability and credibility of sustainability reports.

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