Data-Driven ESG: Why ESG Data Quality Matters for Malaysian Companies
Updated · By SustenyX
Data-driven ESG means managing environmental, social and governance performance with the same reliable, traceable data a company uses to run its finances. In practice it is a two-way relationship: ESG reporting forces a company to collect and control data it never tracked before, and that better data then improves operations, risk management and decisions.
ESG principles are more than just a compliance requirement; they’re a catalyst for businesses to become truly data-driven. By integrating ESG factors into their core operations, organisations can unlock the full potential of their data, driving efficiency, managing risks, and seizing growth opportunities.
How ESG makes a business more data-driven
Optimise operations
Businesses can identify inefficiencies across the value chain, leading to cost reductions and resource optimization. For example, Walmart pairs machine learning with simulation tools to analyse weather forecasts alongside logistics data, so teams can reposition inventory and adjust routes before severe weather disrupts its supply chain (Walmart Global Tech). In Southeast Asia, AirAsia has worked with GE for over a decade on using flight data to cut fuel burn; GE reported in 2018 that the airline expected these data-informed decisions to reduce its fuel costs by 1 percent (GE), and in August 2025 AirAsia adopted GE Aerospace’s Fuel Insight analytics to extend that work (GE Aerospace).
Manage risks proactively
Businesses can better anticipate and mitigate ESG-related risks. The financial sector, for example, is increasingly reliant on data to assess climate-related financial risks. In Malaysia, Bank Negara Malaysia’s Policy Document on Climate Risk Management and Scenario Analysis (issued 2 December 2022, revised 17 March 2025) sets requirements for financial institutions to integrate climate-related risks into their risk management. Meeting it depends on data about borrowers’ and investees’ climate exposure, which is one reason banks increasingly ask their corporate customers for that data.
Drive sustainable growth
Businesses may tap into the growing demand for sustainable products and services. For example, as energy consumption for data centres escalates, there’s a growing impetus for renewable energy solutions. In August 2025, Gentari, a Petronas subsidiary, and Gamuda agreed to develop about 1.5 gigawatts of renewable energy capacity to meet power demand from hyperscale data centres in Malaysia, citing a projection that those data centres will need more than 5 gigawatts of reliable power by 2035 (Gamuda). This link between data centres and solar energy matters for Malaysia’s sustainability goals and for its digital economy.
Elevating data management for ESG success
Effective data management and ESG progress creates a virtuous cycle. As organisations improve their data management practices, they can gather higher quality ESG data, leading to deeper insights and more informed decision-making. In turn, these insights drive further improvements in data management, creating a positive feedback loop. Improved data management can:
- Optimise Data Utilisation: Maximise the value of data through effective analytics and reporting.
- Enhance Data Reliability: Ensure data accuracy, consistency, and completeness to support informed decision-making.
- Improve Data Accessibility: Break down data silos and provide easy access to relevant information across the organisation.
- Strengthen Data Governance: Establish clear data ownership, stewardship, and security protocols.
By embracing ESG and harnessing the power of data, businesses can:
- Leverage Advanced Analytics: Uncover hidden insights and patterns within ESG data to discover opportunities, drive innovation and efficiency.
- Build ESG Talent: Develop a skilled workforce to harness the power of data and ESG.
- Foster Collaboration: Engage with stakeholders, including governments, NGOs, and industry peers, to drive collective impact.
Why ESG data quality matters in Malaysia now
For Malaysian listed companies, ESG data is moving from a voluntary story to a regulated, checkable number. Under the National Sustainability Reporting Framework, Main Market issuers with a market capitalisation of RM2 billion or more began reporting under IFRS S1 and IFRS S2 in 2025, other Main Market issuers follow in 2026, and ACE Market issuers in 2027. Our Malaysia ESG reporting timeline sets out each group’s dates.
Assurance raises the bar further. Mandatory reasonable assurance over Scope 1 and Scope 2 greenhouse gas emissions starts with annual reporting periods beginning on or after 1 January 2028 for the largest listed companies (Securities Commission Malaysia). A figure that will be assured has to be traceable to source records, methods and review decisions, which is a data management problem before it is a reporting one.
Reporting is also becoming centralised. Since March 2025, Bursa Malaysia’s Centralised Sustainability Intelligence (CSI) Platform has been the official sustainability reporting channel for all listed companies, with a Scope 1 and 2 emissions calculator available at no charge (Bursa Malaysia).
The challenge is not unique to Malaysia. In a 2024 global survey, data availability and quality was the obstacle executives cited most often, and most companies were still managing sustainability data in spreadsheets:
Obstacles to sustainability reporting cited by executives
Tools companies use for sustainability data
Where to start
- Name an owner for each data point. Every emissions, energy or workforce figure should have one person responsible for it.
- Document how each number is produced. Record sources, emission factors, assumptions and boundaries, so someone else can reproduce the figure.
- Move key data out of scattered spreadsheets. Keep one controlled version with a change history.
- Check disclosures against the standard. Map what you report against IFRS S1 and S2 to find missing data before an assurer or rating agency does.
Conclusion
ESG is not merely a compliance issue; it’s a strategic imperative that accelerates the transition to a data-driven enterprise. By integrating ESG into data strategies and fostering a virtuous cycle between data management and ESG, businesses can create long-term value, mitigate risks, and contribute to a sustainable future.
Frequently asked questions
What is data-driven ESG?
It is the practice of managing ESG performance with reliable, traceable data rather than estimates and narrative. The same controls a company applies to financial data, such as clear ownership, documented methods and review, are applied to emissions, energy, workforce and governance data.
Why does ESG data quality matter for Malaysian listed companies?
Listed companies are moving to IFRS S1 and S2 reporting between 2025 and 2027, and mandatory reasonable assurance over Scope 1 and Scope 2 emissions starts from 2028 for the largest companies. Data that cannot be traced to its source will not stand up to assurance. See the full timeline.
Where should a company start improving its ESG data?
Start with the figures that will be assured first, usually Scope 1 and Scope 2 emissions. Give each one an owner, document how it is calculated, and keep a single controlled version instead of scattered spreadsheets.
See where your disclosures fall short
Gap Analysis InsightX assesses sustainability and annual reports against IFRS S1 and S2 requirements, indicator by indicator, and ranks the gaps by compliance impact. Our AI-Sustainability Rating Analyser is listed by Bursa Malaysia as a value-added service on its CSI platform.
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