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From Reporting to Responsibility: An Analysis of Environmental

Sustainability Indicators among Malaysian Firms

Nurul Azlin Azmi

1,2

, Raja Adzrin Raja Ahmad

*1,2

, Wan Imran Daniel Aminurrashid

, Nini Suhana

Mastini Razi

, Nor Balkish Zakaria

Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Johor, Kampus Segamat, Malaysia

Accounting Research Institute, Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia

Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000297

Received: 12 October 2025; Accepted: 18 October 2025; Published: 11 November 2025

ABSTRACT:

This study investigates environmental sustainability reporting among 214 Malaysian public-listed companies

over the period 2018–2022. Focusing on six key environmental indicators (EN1–EN1.5) derived from the Global

Reporting Initiative (GRI Standards) and the Bursa Malaysia Sustainability Reporting Framework, the research

assesses the extent and progression of environmental disclosure across dimensions such as total environmental

reporting, 3R practices, reuse and reduction activities, recycling, eco-friendly product innovation, and waste

management systems. Descriptive statistics and trend analysis were used to evaluate reporting patterns over time.

The results reveal a consistent upward trend across all indicators, reflecting firms’ growing commitment to

environmental responsibility and the institutionalisation of sustainability practices within corporate governance.

The findings support institutional theory, suggesting that regulatory pressures, stakeholder expectations, and

industry norms have collectively driven greater environmental accountability and standardisation in disclosure

practices. Overall, this study contributes longitudinal evidence on corporate environmental reporting in an

emerging economy context. It highlights how Malaysian firms are transitioning from compliance-based

disclosure to integrated sustainability management, aligning with international reporting standards and

contributing to the achievement of the Sustainable Development Goals (SDGs).

Keywords: Corporate Environmental Disclosure; Environmental Sustainability Reporting; Institutional Theory;

Malaysia; Sustainable Development Goals (SDGs)

INTRODUCTION

In recent years, the pursuit of sustainable development has become a central agenda in corporate strategy, driven

by global concerns about climate change, environmental degradation, and social responsibility (Avotra et al.,

2021). Businesses are increasingly expected to demonstrate accountability not only for their financial

performance but also for their environmental and social impacts (Tjahjadi et al., 2021). Consequently,

environmental sustainability reporting has evolved as a key mechanism through which firms communicate their

environmental performance, resource use, and ecological footprint to stakeholders. The integration of

sustainability reporting into corporate disclosure practices reflects an important shift from voluntary social

responsibility to strategic sustainability management (Abate et al., 2025; Monazzam & Nilsson, 2025).

In Malaysia, environmental sustainability reporting has gained momentum following the Bursa Malaysia

Sustainability Reporting Framework (2015), which mandates listed firms to disclose their sustainability practices

and performance (Kee et al., 2021; Misman & Adnan, 2023; Shafai & Abd-Mutalib, 2024). This regulatory push

has strengthened corporate commitment to transparent and responsible sustainability practices. In particular, the

Global Reporting Initiative (GRI Standards), the Bursa Malaysia Sustainability Reporting Guide (2015 and 2nd

Edition, 2022), and the United Nations Sustainable Development Goals (SDGs) have collectively encouraged

firms to integrate environmental considerations into their governance and reporting structures (Yatim, 2024;

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Yazid & Maryani 2025). Despite these advancements, the extent and consistency of environmental disclosure

among Malaysian firms remain uneven, varying across industries and time.

While prior studies have examined sustainability reporting in Malaysia, most have focused on cross-sectional

analyses, providing only a snapshot of disclosure practices in a given year (Ajibike et al., 2023). There remains

a lack of longitudinal evidence especially in developing countries that captures how firms’ environmental

reporting evolves over time, especially in response to policy changes, investor pressure, and global sustainability

frameworks (Akhter et al., 2023; Hamad et al., 2023). Moreover, previous studies have often emphasised general

sustainability indices without disaggregating specific environmental dimensions such as recycling, waste

management, or eco-friendly product innovation.

This study addresses these gaps by conducting a five-year longitudinal analysis (2018–2022) of environmental

sustainability disclosure among 214 Malaysian public-listed companies. By disaggregating environmental

reporting into six detailed indicators; EN1 (Total Environmental Disclosure), EN1.1 (3R Practices), EN1.2

(Reuse and Reduce Activities), EN1.3 (Recycling of Waste), EN1.4 (Eco-Friendly Products), and EN1.5 (Waste

Management Systems), the research provides a contexual understanding of how firms are transitioning from basic

environmental reporting to integrated sustainability management systems. In other words, it contributes to the

understanding of how Malaysian firms have transitioned from symbolic reporting to more substantive

sustainability practices.

The primary objective of this study is to examine the extent and trend of environmental sustainability reporting

among Malaysian public-listed companies over the period from 2018 to 2022. Specifically, the study aims to

assess how firms have improved their disclosure practices in response to evolving regulatory requirements,

stakeholder expectations, and global sustainability frameworks. By analysing six key environmental indicators;

namely EN1 (Total Environmental Sustainability Disclosure), EN1.1 (Practice 3R), EN1.2 (Reuse and Reduce

Activities), EN1.3 (Recycling of Waste), EN1.4 (Production of Degradable or Eco-Friendly Products and

Services), and EN1.5 (Waste Management System), this research seeks to capture the depth and breadth of firms’

environmental accountability. Furthermore, the study aims to determine whether Malaysian companies are

moving from basic compliance-oriented reporting toward a more strategic and integrated sustainability

management approach aligned with international frameworks such as the Global Reporting Initiative (GRI), the

International Sustainability Standards Board (ISSB), and the Sustainable Development Goals (SDGs).

The descriptive analysis reveals a steady upward trend in environmental disclosure among Malaysian firms over

the five-year period. The mean scores of EN1 and its sub-indicators (EN1.1–EN1.5) suggest that companies have

increasingly integrated environmental initiatives into their operations. The findings indicate notable

improvements in 3R practices, waste management, and eco-friendly product innovation, demonstrating firms’

responsiveness to both regulatory requirements and stakeholder expectations. The results also suggest a transition

from ad hoc environmental activities toward more structured and institutionalised sustainability management

systems. This is in alignment with the frameworks such as the Global Reporting Initiative (GRI Standards), the

United Nations Sustainable Development Goals (SDGs), and the Bursa Malaysia Sustainability Reporting Guide

(2nd Edition, 2022).

The remainder of this paper is organised as follows. The next part reviews relevant literature and develops the

study’s hypotheses, drawing on previous research and theoretical perspectives on environmental sustainability

reporting. After that, the paper outlines the research methodology, detailing the sample selection, data collection

process, variable measurements, and analytical techniques used in the study. This is followed by a presentation

and discussion of the findings, highlighting the key trends and patterns observed in firms’ environmental

disclosure practices. Finally, the paper concludes by summarising the main insights, outlining the practical

implications, and suggesting directions for future research on corporate sustainability reporting.

LITERATURE REVIEW

A. Environmental Sustainability Reporting: Global Context

Environmental sustainability reporting has become an essential component of corporate accountability in the

21st century (Dimitriou & Karagkouni, 2022; Lai & Stacchezzini, 2021; Sisaye, 2021). Globally, firms are under

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increasing pressure to disclose how their operations affect the environment, aligning with broader sustainability

frameworks such as the Global Reporting Initiative (GRI Standards), the United Nations Sustainable

Development Goals (SDGs), and the Bursa Malaysia Sustainability Reporting Guide (2015 and 2nd Edition,

2022) (Hamad et al., 2023; Yazid & Maryani 2025). According to Hahn and Kühnen (2013), sustainability

reporting enables organisations to communicate their environmental performance and risk management

practices, fostering transparency and stakeholder trust. Similarly, Cho et al. (2015) emphasised that

environmental disclosures not only inform stakeholders but also enhance a firm’s accountability in the eyes of

regulators and investors.

In recent years, the integration of environmental, social, and governance (ESG) dimensions into corporate

reporting has strengthened the role of sustainability as a strategic imperative rather than a voluntary practice

(Jiang & Tang, 2023; Rouen et al., 2022). Research by de Villiers et al. (2021) highlights that firms with

consistent environmental disclosures tend to achieve superior market valuation and reputation outcomes,

indicating that sustainability transparency has become a source of competitive advantage.

B. Environmental Disclosure in the Malaysian Context

Malaysia has progressively advanced its sustainability reporting landscape, particularly after Bursa Malaysia’s

2015 directive that mandated sustainability disclosures for all listed firms (Alam et al., 2022; Rani & Haris,

2025). The introduction of the Bursa Malaysia Sustainability Reporting Guide (2015 and 2nd Edition, 2022)

further refined disclosure expectations by emphasising materiality, performance indicators, and integration with

strategic objectives. Studies such as Amran and Haniffa (2011) and Hizam et al. (2020) found that while

Malaysian companies have increased their sustainability disclosures, the depth and quality of reporting still vary

significantly between industries.

Furthermore, Sulaiman et al. (2020) observed that firms in environmentally sensitive sectors (e.g., energy,

plantations, and manufacturing) tend to disclose more environmental information compared to firms in service

industries. However, the transition from compliance-based to performance-oriented disclosure remains gradual.

The introduction of the Sustainability Reporting Guide has begun to close this gap, encouraging Malaysian firms

to adopt internationally recognised environmental metrics consistent with the GRI and SDG frameworks.

Elaigwu et al. (2024) examined the relationship between corporate integrity, external assurance, and the quality

of sustainability reporting among Malaysian public-listed companies. Their study found that as firms

increasingly adopt integrity-driven governance and seek third-party assurance for their sustainability disclosures,

the overall quality, reliability, and transparency of reporting have improved significantly. The authors argue that

sustainability reporting in Malaysia has evolved beyond a compliance requirement into a strategic

communication tool that enhances stakeholder trust and demonstrates corporate accountability. This shift is

attributed to institutional pressures, including regulatory expectations from Bursa Malaysia and normative

influences from global reporting frameworks. The study’s findings support the view that corporate sustainability

reporting in Malaysia is becoming more embedded within governance structures, aligning closely with

institutional theory’s assertion that external and normative forces shape organisational behaviour and disclosure

practices.

C. Theoretical Perspectives

The theoretical foundation of this study is anchored in stakeholder theory and institutional theory, both of which

provide strong conceptual explanations for environmental sustainability reporting practices (Del Gesso & Lodhi,

2025; Mahmud, 2020). Stakeholder theory (Freeman, 1984) posits that corporations are accountable not only to

shareholders but also to a broader group of stakeholders who are affected by corporate activities. These

stakeholders include regulators, customers, employees, and local communities (Azzone et al., 1997 Latip et al.,

2022). Under this view, environmental reporting serves as a key communication tool through which firms convey

their commitment to sustainability and transparency (Sari & Muslim, 2024). By disclosing environmental

initiatives, companies aim to satisfy stakeholder expectations, enhance corporate reputation, and firm

performance (Akhter et al., 2023; Azzone et al., 1997). The increasing demand for accountability from investors

and society has therefore positioned sustainability reporting as a strategic response to stakeholder pressures.

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Complementing this, institutional theory (DiMaggio & Powell, 1983) suggests that firms adopt environmental

disclosure practices as a result of external institutional pressures, including regulatory requirements, normative

expectations, and industry best practices. Over time, these pressures lead to institutional isomorphism, where

organisations within the same environment converge toward similar sustainability practices (Amoako et al.,

2021; Anlesinya et al., 2023). In the Malaysian context, the adoption of the Bursa Malaysia Sustainability

Reporting Guide and the Global Reporting Initiative (GRI Standards) reflects such institutional conformity.

Firms increasingly view environmental reporting not merely as compliance but as a standardised expectation

within the corporate field. Together, stakeholder and institutional theories explain how both external

expectations and systemic pressures shape the evolution and institutionalisation of environmental disclosure

practices among Malaysian firms (Wu & Memon, 2022).

D. Dimensions of Environmental Sustainability Disclosure

This study focuses on six key environmental indicators derived from the Global Reporting Initiative (GRI

Standards) and the Bursa Malaysia Sustainability Reporting Guide, identified as EN1 through EN1.5. Each

indicator reflects a distinct aspect of corporate environmental management and collectively provides a holistic

view of firms’ environmental accountability.

The first indicator, EN1 (Total Environmental Sustainability Disclosure), captures a firm’s overall commitment

to environmental responsibility. It measures the extent to which companies disclose their environmental policies,

initiatives, and outcomes. According to Michelon et al. (2015), comprehensive environmental disclosures are

strongly associated with enhanced transparency and investor confidence, signifying a firm’s proactive stance on

sustainability governance.

The second indicator, EN1.1 (Practice 3R: Recycle, Reuse, Reduce), aligns closely with Sustainable

Development Goal (SDG) 12, which promotes responsible consumption and production. Research by Sroufe

(2017) demonstrates that adopting 3R initiatives enables firms to improve resource efficiency, lower production

costs, and strengthen their environmental image, thereby improving competitiveness. Similarly, EN1.2 (Reuse

and Reduce Activities) reflects corporate efforts to minimise material consumption through improved

operational processes and sustainable procurement. As Bui et al. (2021) note, firms reporting on reuse and

reduction activities are often driven by both cost efficiency and environmental stewardship, reflecting a shift

toward circular economy practices.

The next dimension, EN1.3 (Recycling of Waste), serves as an indicator of operational sustainability and

environmental management maturity. Yusoff et al. (2019) found that Malaysian manufacturing firms have

increasingly reported recycling initiatives, largely in response to regulatory requirements and heightened

stakeholder expectations regarding waste reduction. Meanwhile, EN1.4 (Degradable or Eco-Friendly Products)

represents firms’ innovation capacity in developing environmentally friendly products and services. Fernando

and Lawrence (2014) highlight that eco-innovation enhances corporate competitiveness by meeting consumer

demand for sustainable alternatives and reducing environmental footprints.

Lastly, EN1.5 (Waste Management Systems) demonstrates the extent to which companies have established

structured waste monitoring and disposal frameworks. Ahmad et al. (2021) observed that improvements in this

area often coincide with enhanced compliance with environmental regulations and internal governance

standards. Collectively, these six indicators (EN1–EN1.5) provide a comprehensive framework for assessing

how Malaysian firms have progressed from merely reporting environmental activities to embedding

sustainability principles into their strategic and operational systems.

RESEARCH METHODOLOGY

A. Research Design

This study adopts a quantitative longitudinal research design to examine the changes of environmental

sustainability reporting among Malaysian firms over a five-year period (2018–2022). The design enables the

identification of trends, patterns, and consistency in environmental disclosure practices across industries and

years. A content analysis approach was employed, consistent with prior sustainability disclosure studies (e.g.,

Hahn & Kühnen, 2013; Fernando & Lawrence, 2014).

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B. Sample Selection

The sample consists of 214 Malaysian public-listed companies on Bursa Malaysia. Firms were selected through

stratified random sampling to ensure representation across major sectors (industrial, consumer, services,

plantation, financial, and technology). Financial institutions were retained in the sample, as their sustainability

disclosures have increased since Bursa Malaysia’s Sustainability Reporting Framework (2015).

Data were manually extracted from annual reports and sustainability reports published between 2018 and 2022.

Each report was reviewed for environmental disclosure content following the guidelines of the Global Reporting

Initiative (GRI Standards) and Bursa Malaysia’s Sustainability Reporting Guide (2015 and 2nd Edition, 2022).

C.Measurement and Analysis of Variables

Environmental sustainability disclosure was measured through six indicators, denoted as EN1–EN1.5, developed

based on GRI 300 (Environmental Series) and prior Malaysian ESG literature:

Table 1: Indicator Description for the Environmental Disclosure

Code

Indicator Description

Example Disclosure Items

EN1

Total Environmental Sustainability

Disclosure

Overall commitment to environmental practices and

reporting frameworks

EN1.1

Practice 3R (Recycle, Reuse, Reduce)

Waste minimisation initiatives, recycling programs

EN1.2

Reuse and Reduce Activities

Material efficiency, packaging reduction

EN1.3

Recycling of Waste

Waste segregation, recycling partnerships

EN1.4

Degradable or Eco-Friendly Products

Product innovation, biodegradable materials

EN1.5

Waste Management System

Waste monitoring, disposal, compliance systems

Table 1 shows the description of environmental disclosure indicators (EN1–EN1.5) used in this study, which

were adapted from the Global Reporting Initiative (GRI Standards) and the Bursa Malaysia Sustainability

Reporting Framework. Each indicator was coded on a binary or weighted disclosure scale (1 = disclosed; 0 =

not disclosed), with the total environmental score (EN1) representing the aggregate of all sub-indicators.

Descriptive statistics (mean, standard deviation, and frequency) were used to identify the extent and trend of

environmental disclosure from 2018 to 2022. The data were analysed using Microsoft Excel and SPSS version

20 to compute the mean disclosure index for each indicator and year.

The collected data were subjected to descriptive statistical analysis to determine the extent, variability, and

temporal trends of environmental sustainability reporting among Malaysian firms. This approach is consistent

with prior sustainability reporting studies (e.g., Sulaiman et al., 2020; Ahmad et al., 2021) that rely on

quantitative indicators to measure disclosure performance.

The analysis was executed using Microsoft Excel 365 for preliminary data aggregation and IBM SPSS Statistics

version 29 for statistical computation. The data were cleaned, coded, and verified for accuracy before analysis

to ensure robustness and reproducibility. A visual trend analysis was conducted using bar charts to depict the

progression of environmental disclosure practices over the five-year period. The charts illustrate how each

indicator (EN1–EN1.5) evolved annually, enabling comparison of disclosure maturity across indicators.

To ensure content validity, the disclosure index was reviewed by two sustainability experts and benchmarked

against established frameworks (GRI and SDGs). Inter-coder reliability was assessed through independent

coding of 10% of the sample, resulting in a Cohen’s Kappa score above 0.85 (Schober et al., 2021). This

demonstrates strong consistency in the coding of environmental disclosure indicators (EN1–EN1.5)

DISCUSSION AND FINDINGS

This section presents the findings derived from the analysis of environmental sustainability reporting indicators

(EN1–EN1.5) among 214 Malaysian public-listed companies from 2018 to 2022. The analysis focuses on the

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extent and trend of environmental disclosure over the five-year period, capturing how firms have responded to

evolving sustainability expectations and regulatory developments. The upward trends observed across most

indicators suggest that Malaysian companies have progressively improved their environmental reporting

practices. This improvement is likely driven by the cumulative influence of earlier regulatory frameworks,

particularly the Bursa Malaysia Sustainability Reporting Framework (2015) and the first edition of the Bursa

Malaysia Sustainability Reporting Guide (2016). Additionally, the growing stakeholder pressure and

international alignment with frameworks such as the Global Reporting Initiative (GRI Standards) and the United

Nations Sustainable Development Goals (SDGs). The findings show each environmental indicator in detail,

linking quantitative trends to the broader institutional and market context that shaped corporate sustainability

disclosure during the 2018–2022 period.

Figure 1: EN1 – Total Environmental Sustainability Reporting Indicator

As depicted in Figure 1, the mean trend for EN1, which represents the overall extent of environmental

sustainability disclosure, shows a steady increase from 2018 to 2022. This upward movement indicates that

Malaysian firms have progressively enhanced their environmental reporting practices over time. The

improvement likely reflects the cumulative impact of the Bursa Malaysia Sustainability Reporting Framework

(2015) and the first edition of the Sustainability Reporting Guide (2016), both of which laid the foundation for

systematic disclosure requirements. Moreover, the trend suggests that environmental topics are becoming

increasingly embedded within corporate governance structures and reporting routines. The gradual rise in EN1

scores also mirrors growing stakeholder awareness and investor demand for environmental accountability.

Figure 1 shows the consistent increase across the five-year period implies that environmental sustainability

reporting has evolved from a compliance exercise into an integral aspect of corporate transparency among

Malaysian public-listed firms. This is also consistent with the findings from Elaigwu et al., (2024) that shows

sustainability reporting in Malaysia has improved significantly in quality and transparency.

Figure 2: EN1.1 – Practice 3R (Recycle, Reuse, Reduce)

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The mean trend for EN1.1, as shown in Figure 2, represents firms’ disclosure of 3R (Recycle, Reuse, Reduce)

practices and demonstrates a consistent upward movement from 2018 to 2022. This steady increase indicates

that Malaysian companies have progressively adopted and disclosed initiatives related to resource efficiency and

waste reduction. The pattern suggests that firms are increasingly internalising circular economy principles and

embedding environmental efficiency into their operational and reporting frameworks.

This improvement can be attributed to the growing emphasis on responsible production and consumption

promoted through ASEAN’s sustainability agenda and Sustainable Development Goal (SDG) 12 (Responsible

Consumption and Production). It also reflects the influence of earlier Bursa Malaysia guidelines (2015–2016),

which encouraged companies to articulate measurable environmental initiatives. The rise in EN1.1 scores

implies that environmental sustainability has evolved from peripheral corporate activity to an integrated element

of business strategy, particularly within sectors that generate higher levels of operational waste. In essence, the

upward trajectory in EN1.1 reflects not only compliance with sustainability norms but also a broader shift toward

proactive environmental stewardship and the institutionalisation of waste minimisation practices among

Malaysian firms.

Figure 3: EN1.2 – Reuse and Reduce Activities

The EN1.2 trend as shown in Figure 3 represents firms’ specific disclosure on reuse and reduction initiatives.

Any increase between 2018 and 2022 implies rising commitment to material efficiency and reduced

environmental footprint. However, if fluctuations occur, they may reflect operational or industry-specific

constraints that limit waste reduction programmes.

As illustrated in Figure 3, the mean trend for EN1.2 shows a gradual and consistent increase from 2018 to 2022,

indicating that Malaysian firms have progressively enhanced their disclosure of reuse and reduction initiatives.

This upward trend suggests a growing organisational commitment to material efficiency, reflecting efforts to

optimise resource utilisation and minimise waste generation within production and operational processes. The

results imply that firms are increasingly internalising sustainable consumption practices, consistent with the

objectives of SDG 12 (Responsible Consumption and Production) and Malaysia’s broader sustainability agenda.

The steady rise in EN1.2 values also reflects firms’ transition from ad-hoc waste minimisation measures toward

systematic resource management strategies, such as product redesign, supply chain optimisation, and waste

segregation systems. This demonstrates that environmental considerations are becoming integrated into the

operational core of businesses rather than treated as peripheral initiatives. While minor year-to-year variations

may occur due to industry-specific or operational constraints, the overall trend points to a positive and sustained

improvement in reuse and reduction reporting. This pattern highlights a deepening awareness among Malaysian

companies of the economic and environmental benefits of resource efficiency as part of long-term sustainability

performance.

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Figure 4: EN1.3 – Recycling of Waste

As shown in Figure 4, the mean trend for EN1.3 demonstrates a steady increase from 2018 to 2022, indicating

that Malaysian firms have progressively strengthened their waste recycling disclosures. This upward trend

reflects growing corporate commitment to structured waste management programs and enhanced transparency

in reporting such initiatives. The consistent improvement over time suggests that companies are responding to

both regulatory expectations, especially those established under Malaysia’s environmental legislation and the

Bursa Malaysia Sustainability Reporting Framework (2015). Furthermore, the stakeholder pressure could

possibly be the reason to adopt more responsible production practices.

The gradual rise in EN1.3 values also signifies an operational shift from basic recycling initiatives toward more

systematic waste segregation, recovery, and resource reuse mechanisms. These developments align with

Malaysia’s national waste management policies and broader sustainability goals that promote a transition toward

a circular economy. Any minor fluctuations in the trend, particularly during the 2020–2021 period, could be

attributed to disruptions caused by the COVID-19 pandemic, which affected recycling supply chains and

logistics operations across industries. Overall, the positive trend in EN1.3 highlights the increasing

institutionalisation of waste recycling practices, highlighting that Malaysian firms are progressively embedding

sustainability within their operational and disclosure frameworks.

Figure 5: EN1.4 – Production of Degradable or Eco-Friendly Products and Services

As illustrated in Figure 5, the mean trend for EN1.4 shows a steady upward movement from 2018 to 2022,

indicating a growing emphasis among Malaysian firms on the production and disclosure of degradable or eco-

friendly products and services. This pattern reflects an increasing shift toward sustainable product innovation,

as companies respond to changing consumer preferences, stricter environmental regulations, and the global

movement toward low-carbon economies. The rise in EN1.4 suggests that firms are beginning to incorporate

environmental considerations into product design and development, particularly in manufacturing and consumer

goods sectors where material impact and packaging sustainability are key performance dimensions.

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The improvement in EN1.4 also demonstrates firms’ alignment with Sustainable Development Goal (SDG) 9

(Industry, Innovation, and Infrastructure) and SDG 13 (Climate Action) highlighting the role of innovation in

addressing environmental challenges. This trend signifies a transition from reactive environmental compliance

to proactive eco-innovation, where businesses pursue competitive advantage through sustainable differentiation.

By embedding eco-friendly product initiatives within their strategic and operational processes, Malaysian

companies are not only enhancing market reputation but also contributing to long-term environmental resilience

and national sustainability objectives. Overall, the consistent increase in EN1.4 shows the growing

institutionalisation of green innovation as a key component of corporate sustainability performance.

Figure 6: EN1.5 – Waste Management System

As depicted in Figure 4.6, the mean trend for EN1.5 shows a steady and continuous increase from 2018 to 2022,

indicating that an increasing number of Malaysian firms have established and disclosed structured waste

management systems. This upward movement reflects the growing institutionalisation of formal waste tracking,

segregation, and disposal mechanisms, signalling a shift from informal or ad-hoc waste handling toward more

systematic governance frameworks. The trend also suggests heightened compliance with national and regional

environmental regulations, such as Malaysia’s Environmental Quality Act (1974) and related industrial waste

management guidelines, which have progressively encouraged companies to adopt stronger internal

environmental controls.

A consistently high mean value for EN1.5 further indicates that waste management has become an embedded

and routine corporate practice, reflecting organisational maturity in environmental governance. The

improvement may also be attributed to firms’ efforts to align their sustainability practices with global

frameworks such as the Global Reporting Initiative (GRI Standards) and Sustainable Development Goal (SDG)

12, Responsible Consumption and Production. Overall, the sustained upward trend in EN1.5 shows the evolution

of Malaysian firms from basic waste compliance toward comprehensive, system-based waste governance models

that integrate environmental accountability into corporate strategy and reporting.

Overall, the findings from EN1 to EN1.5 demonstrate a clear shift among Malaysian firms from basic

environmental disclosure toward more structured and integrated sustainability management practices. This

upward progression reflects growing organisational maturity, stronger adherence to national regulatory

frameworks, and increasing alignment with international sustainability standards such as the Global Reporting

Initiative (GRI Standards) and the Sustainable Development Goals guidelines. Collectively, these results

highlight how corporate environmental reporting in Malaysia has evolved into a more strategic and

institutionalised practice, contributing to the achievement of key Sustainable Development Goals (SDGs 8, 9,

12, 13, and 16) and highlighting firms’ deepening commitment to long-term environmental accountability.

CONCLUSION AND RECOMMENDATIONS

This study examined the environmental sustainability reporting practices of 214 Malaysian public-listed

companies from 2018 to 2022, focusing on six key environmental indicators (EN1–EN1.5) derived from the

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Global Reporting Initiative (GRI Standards) and the Bursa Malaysia Sustainability Reporting Framework. The

findings reveal a progressive improvement in environmental disclosure across all indicators, reflecting firms’

growing commitment to environmental accountability and governance. Over time, companies have transitioned

from basic compliance-driven reporting toward more structured, integrated sustainability management systems.

These developments indicate increasing institutionalisation of environmental practices and a stronger alignment

with international sustainability frameworks and the United Nations Sustainable Development Goals (SDGs).

From a theoretical perspective, the findings provide strong support for institutional theory, which explains how

organisations conform to regulatory, normative, and mimetic pressures to achieve social and operational

legitimacy within their institutional environments. The consistent improvement in environmental disclosure

reflects how Malaysian firms are responding to evolving expectations from regulators, investors, and industry

peers, driven by both coercive and normative forces. This institutional influence has encouraged firms to

standardise their reporting practices, embed sustainability governance within their organisational systems, and

align with global disclosure frameworks. Practically, this evolution highlights that environmental reporting in

Malaysia has matured into a structured mechanism for enhancing corporate accountability, transparency, and

competitiveness in the sustainability domain.

Despite these contributions, this study has certain limitations. The analysis relied on secondary data extracted

from publicly available annual reports, which may not capture the full depth of firms’ internal sustainability

initiatives or informal environmental activities. Furthermore, the focus on descriptive analysis limits the ability

to infer causal relationships between regulatory influences and disclosure performance. Nonetheless, the study

contributes meaningfully to the literature by offering an empirical overview of environmental reporting trends

in Malaysia over a five-year period, providing a valuable baseline for policymakers, regulators, and researchers

to understand corporate environmental disclosure maturity within an emerging economy context.

Future research could extend this study by incorporating a larger dataset or applying panel regression models to

examine the determinants and performance implications of environmental disclosure. Comparative studies

across ASEAN countries would also offer insights into regional convergence and policy harmonisation in

sustainability reporting. Additionally, integrating qualitative methods such as interviews or content analysis

could provide deeper understanding of managerial motivations, stakeholder influence, and the internal decision-

making processes that shape sustainability disclosure practices.

ACKNOWLEDGEMENT

The authors would like to thank the Accounting Research Institute (HICOE), Ministry of Higher Education,

grant code: UiTM.800-3/1 DDJ.82 (007/2025) and University Teknologi MARA (UiTM) for providing the

necessary financial assistance and support for this study.

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