First, find out where the requirement comes from
Three kinds of commitment can sit alongside each other:
- Regulatory requirements: applicable laws, regulator rules and listing requirements. Their scope matters: a rule for an issuer or financial institution is not automatically a rule for every SME.
- Voluntary standards: frameworks you choose to follow, such as the Green Loan Principles. Voluntary adoption still means meeting the framework's requirements if you claim alignment.
- Contractual commitments: promises in your financing or other agreements, such as permitted spending, targets, reporting and independent checks. Ask how a missed commitment affects the actual agreement.
For example, the Green Loan Principles are voluntary market guidance, while the SC's issuance guidelines contain requirements for the instruments and routes they cover. Your transaction documents need their own review.
Find the framework for your situation
Use the table to shortlist your reading. These are references to investigate, rather than a finding that your business or project qualifies. SRI means Sustainable and Responsible Investment; sukuk are Islamic capital-market instruments.
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| Financing route or reader situation | Framework to investigate | Why it matters | Detailed guide or official source |
|---|---|---|---|
| Borrowing for an environmental project, such as an equipment upgrade | Green Loan Principles (GLP), March 2025; the lender's eligibility criteria | Covers eligible use of the money, project selection, tracking and reporting | Green loans; original GLP |
| Business financing tied to sustainability performance | Sustainability-Linked Loan Principles (SLLP), March 2025; proposed facility terms | Connects meaningful measures and ambitious targets to financing terms, reporting and verification | Sustainability-linked financing; original SLLP |
| A bank asks how your activity contributes to climate goals or manages environmental harm | BNM's Climate Change and Principle-based Taxonomy (CCPT), with July 2026 implementation guidance | Helps the financial institution assess and classify activities; explains why it may request project and business evidence | BNM's final CCPT; implementation update |
| Raising funds through green, social or sustainability bonds | Relevant ICMA principles/guidelines; applicable SC issuance rules; ACMF standards for an ASEAN label | Establishes project-purpose, disclosure and reporting expectations; the chosen label adds conditions | Bond guide; SC's rules and ASEAN standards |
| Issuing SRI or SRI-linked sukuk | Current SC SRI chapters and Islamic capital-market requirements; relevant ASEAN standards | Project-purpose and performance-linked sukuk have different requirements; investor route affects review and disclosure duties | SRI Sukuk Framework; sukuk basics |
| Financing changes to emissions-intensive operations | JC3's published Sustainable and Transition Finance Guidance; ASEAN Transition Finance Guidance Version 2; ICMA's transition handbook for debt issuance | Tests whether targets, investment and delivery support a credible transition | Transition finance; ASEAN guidance |
| Checking company reporting or assurance obligations | National Sustainability Reporting Framework (NSRF), applicable regulator/listing rules and current assurance policy | Entity type, size, reporting period and available relief affect what applies | Reporting guide; official NSRF documents |
| An SME answering a customer or bank's ESG questions | Simplified ESG Disclosure Guide (SEDG), national Version 2, July 2025; the actual request | Helps organise environmental, social and governance (ESG) data; the request may specify a different scope | SEDG for SMEs; original guide |
ICMA is the International Capital Market Association. ACMF is the ASEAN Capital Markets Forum. ASEAN means the Association of Southeast Asian Nations. Malaysia's banking regulator is Bank Negara Malaysia (BNM); the capital-market regulator is the Securities Commission Malaysia (SC).
What does a taxonomy tell you?
A taxonomy classifies economic activities against stated sustainability criteria. Depending on the framework, it considers contributions to climate or other objectives, significant harm, safeguards and transition efforts. It helps explain why an activity may fit a financing framework; classification alone does not establish product eligibility or credit approval. The GLP also recognises taxonomies as complementary project-assessment references.
Keep these references separate:
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| Taxonomy | Status checked on 5 October 2026 | Who should investigate it? |
|---|---|---|
| BNM CCPT | Final document issued and effective 30 April 2021; implementation guidance updated 30 July 2026 | Primarily BNM-supervised financial institutions. Borrowers may need to supply evidence for their assessment. |
| SC's Principles-based SRI Taxonomy | Published December 2022; voluntary guidance | Capital-market participants assessing environmental, social and sustainability activities. It complements product frameworks. |
| ASEAN Taxonomy, Version 4 | Published 6 November 2025; latest edition located in this check | Readers needing a regional classification reference. Ask which sector criteria and assessment approach the financier uses. |
| Malaysia Taxonomy for Sustainable Finance | The March 2026 consultation is historical. The 13 August 2026 JC3 statement records agreement to use ASEAN Taxonomy as the national basis, with local tools and a pilot before full adoption for reporting in 2028. | Check the operative local guidance for your institution/activity. This decision does not establish completed local criteria, a CCPT withdrawal date or a reporting duty for every SME. |
Bring the relevant version to your financing discussion. Ask which activity is being assessed, what evidence is needed and how the classification relates to that product's criteria.
Match the document to the commitments
A project-purpose facility needs eligible spending, selection, tracking and reporting. A linked facility needs meaningful measures, targets, verification and an agreed effect on terms. Use green loans and sustainability-linked financing for those details.
For sukuk, the current unlisted SC rules and retail rules distinguish investor routes and project-purpose/linked structures. The SRI framework guide explains requirements and review differences. An ASEAN label adds the applicable ACMF standard; it is separate from taxonomy classification.
Check reporting and assurance separately
The NSRF uses the IFRS Foundation's sustainability standards, issued by the International Sustainability Standards Board (ISSB). IFRS stands for International Financial Reporting Standards. IFRS S1 covers sustainability-related financial information; IFRS S2 covers climate-related disclosures.
The NSRF FAQ identifies Main Market and ACE Market listed issuers and qualifying large non-listed companies. Other entities may adopt voluntarily unless their regulator mandates otherwise. For listed issuers, check the applicable Bursa Malaysia listing requirements, including the relevant market's transitional provisions. For large non-listed companies, also confirm the implementing law and directions from the Companies Commission of Malaysia (SSM): its May 2026 update concerns proposed amendments, and does not establish enactment. A customer's reporting duties do not automatically become your SME's duties.
Assurance is an independent engagement checking specified reported information. The 17 September 2026 assurance update sets mandatory reasonable assurance on Scope 1 and Scope 2 greenhouse-gas emissions for annual reporting periods beginning on or after 1 January 2028 for Group 1, 2029 for Group 2 and 2030 for Group 3. Scope 1 concerns direct emissions; Scope 2 concerns purchased energy. This assurance change does not establish a postponement of reporting.
Use the detailed reporting guide to identify your group, dates, relief and assurance requirements. A financing-framework opinion, target verification and company-reporting assurance can cover different subjects; check each engagement's scope.
Use transition guidance to test the plan behind the investment
The published ASEAN Transition Finance Guidance Version 2, October 2024, replaces Version 1. It helps assess transition credibility. ICMA's Climate Transition Finance Handbook, November 2025 provides voluntary recommendations for debt-market issuers.
For Malaysian bank assessment, read JC3's published Sustainable and Transition Finance Guidance, launched on 2 December 2025 following consultation. It considers the investment and the company behind it.
A credible plan connects significant emissions sources, science-based targets, near-term actions, funding, responsibilities and progress checks. Examine carbon lock-in: whether today's investment keeps you dependent on high-emitting assets for years. Our transition-finance guide helps you prepare that discussion.
The loan-market associations' October 2025 Guide to Transition Loans contains exposure-draft Transition Loan Principles in the current directory checked. That means proposed principles, rather than a verified final standard. Check for a published successor before relying on them.
