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Configure solarSolar: A Practical Path to ESG Compliance in Malaysia
Bursa Malaysia now requires listed companies to report GHG emissions, energy intensity, and renewable energy usage. A rooftop solar system is the single most impactful action your company can take to move the needle on all three — fast, measurable, and auditable.
Based on Bursa Sustainability Reporting Framework 2.0 (2025)
0.740
tCO2e/MWh
Grid emission factor (Peninsular Malaysia; Suruhanjaya Tenaga, 2024 (provisional))
FY 2024
effective
Bursa mandatory GHG reporting
EN1–EN5
indicators
Bursa indicators solar addresses
I-REC
certified
Third-party proof of renewable use
Mandatory from FY 2024: Main Market listed companies must disclose GHG emissions (Scope 1 and 2), energy intensity, and renewable energy usage in annual reports.
ACE Market companies follow on a comply-or-explain basis. Non-compliance risks investor scrutiny, ESG rating downgrades, and exclusion from sustainability-linked financing.
Bursa Malaysia ESG Framework: What Is Required
What your company must disclose — and the penalties for non-compliance
Bursa Malaysia's Sustainability Reporting Framework 2.0 (effective on Bursa's phased timeline; check the current Bursa guidance) mandates that all Main Market listed companies report a core set of environmental, social, and governance indicators in their annual reports. The framework aligns with the Global Reporting Initiative (GRI) Standards and the Task Force on Climate-related Financial Disclosures (TCFD).
For CFOs and CSR Managers, this creates a clear obligation: measure, manage, and report GHG emissions and energy data. Companies that install solar have a significant advantage — their renewable energy use and Scope 2 reduction are automatically quantifiable, auditable metrics.
Bursa ESG Reporting Timeline & Requirements
| Effective Date | Market | Requirement |
|---|---|---|
| FY 2024 onwards | Main Market | Mandatory: Energy, GHG (Scope 1 & 2), waste, water, workforce safety |
| FY 2025 onwards | Main Market | Mandatory: GHG intensity, renewable energy %, Board oversight of sustainability |
| FY 2026 onwards | Main Market (large cap) | TCFD-aligned climate risk disclosures, Scope 3 (encouraged) |
| FY 2025 onwards | ACE Market | Comply-or-explain: core EN and SO indicators |
Penalty exposure for non-disclosure
Bursa Malaysia may issue public reprimands, fines, or require corrective disclosures. Beyond regulatory action, ESG rating agencies (MSCI, Refinitiv, Bloomberg) can downgrade companies with missing or unverifiable sustainability data — which directly affects access to sustainability-linked financing and institutional investor mandates.
How Solar Reduces Scope 2 Emissions
Grid emission factor, calculation method, and reporting methodology
The GHG Protocol classifies electricity purchased from the national grid as Scope 2 emissions (indirect emissions from energy use). In Malaysia, the Peninsular grid is powered predominantly by natural gas and coal, making grid electricity a significant source of corporate carbon emissions.
Solar PV reduces the Scope 2 emissions of the electricity you generate and use on site, by generating electricity from sunlight — a zero-emission source. Each unit of solar energy consumed means one fewer unit drawn from the grid, and therefore one fewer unit of associated Scope 2 emissions.
Malaysia Grid Emission Factor (Official)
0.740
tCO2e per MWh
Peninsular Malaysia, 2024 (provisional)
0.00074
tCO2e per kWh
Use this in calculations
Suruhanjaya Tenaga
Source authority
Published annually
Note: Sabah (0.539 tCO2e/MWh) and Sarawak (0.199 tCO2e/MWh) have their own 2024 provisional factors from Suruhanjaya Tenaga. Always use the factor for your grid region.
Scope 2 Reduction Calculation (Reporting Method)
Get your solar system's annual generation (from inverter data)
Example: 200kWp system → ~252,000 kWh/year in Malaysia
Apply location-based method (or market-based with I-RECs)
Location-based: kWh × 0.00074 tCO2e/kWh = tonnes avoided
Report as Scope 2 reduction in sustainability report
252,000 kWh × 0.00074 = 186 tCO2e/year avoided
ESG Impact Calculator
Estimate your solar system's ESG impact for annual report disclosure
Solar ESG Impact Calculator
Based on Malaysia grid emission factor 0.740 tCO2e/MWh
Estimate: Annual kWh from TNB bill × 0.00074 = your baseline tCO2e
186
tCO2e avoided/year
Scope 2 reduction
252
MWh generated/year
Renewable energy produced
8,370
Trees equivalent/year
For CSR communications
16%
Scope 2 reduction
vs your baseline
I-REC Certificates Available
252 I-RECs/year
1 I-REC = 1 MWh of verified renewable electricity. Used for market-based Scope 2 reporting and greenwashing prevention.
Calculations use Malaysia grid emission factor 0.740 tCO2e/MWh (Peninsular Malaysia; Suruhanjaya Tenaga, 2024 (provisional)) and average yield of 1,260 kWh/kWp/year. Actual results vary by location, system design, and shading.
Annual Report Template: Solar ESG Disclosure
Copy-paste this section into your Bursa sustainability report. Edit figures in brackets.
Annual Report — Sustainability Section
Renewable Energy Initiatives
In [YEAR], [COMPANY NAME] commissioned a [SYSTEM_SIZE] kWp rooftop solar photovoltaic system at our [FACILITY NAME] in [LOCATION], Malaysia. The system was installed and commissioned by Trexon Energy (Thither Global (M) Sdn Bhd), a SEDA-registered PV Service Provider (RPVSP).
Environmental Impact
The solar installation generated approximately [ANNUAL_GENERATION] MWh of renewable electricity during the reporting period, equivalent to [CO2_AVOIDED] metric tonnes of CO2 equivalent (tCO2e) avoided based on the Peninsular Malaysia grid emission factor of 0.740 tCO2e/MWh (Suruhanjaya Tenaga, [YEAR]).
This represents a [SCOPE2_PCT]% reduction in our Scope 2 GHG emissions compared to [BASE_YEAR] baseline, contributing directly to our Science Based Targets / Net Zero 2050 commitments.
Renewable Energy Certificates
[COMPANY NAME] procured [IREC_COUNT] International Renewable Energy Certificates (I-RECs) corresponding to our solar generation during [YEAR]. These certificates are registered under the I-REC Standard and provide independent, auditable verification of our renewable electricity claim under the GHG Protocol Scope 2 market-based accounting method.
Bursa Malaysia Sustainability Indicators
| Indicator | Unit | [YEAR] Reported Value |
|---|---|---|
| EN1 — Total energy consumption | kWh | [TOTAL_KWH] |
| EN5 — Renewable energy consumption | kWh / % | [SOLAR_KWH] / [PCT]% |
| EN3 — Scope 2 GHG emissions | tCO2e | [SCOPE2_TCO2E] |
This template aligns with GRI 302-1 (Energy within organisation), GRI 305-2 (Scope 2 GHG emissions), and Bursa Malaysia Sustainability Reporting Guide 3rd Edition. Consult your sustainability consultant for finalisation.
How Solar Addresses E, S, and G Simultaneously
Solar is not just an Environmental play — it contributes across all three pillars
E — Environmental
Scope 2 GHG Reduction
Every MWh of solar generation avoids 0.740 tonnes of CO2 equivalent that would have come from the national grid (Peninsular Malaysia grid emission factor; Suruhanjaya Tenaga, 2024 (provisional)).
Reduced Air Pollution
Coal and gas-fired power stations emit NOx, SOx, and particulate matter. Solar displaces these at source.
SDG 7 & 13 Alignment
Solar directly contributes to UN Sustainable Development Goal 7 (Clean Energy) and SDG 13 (Climate Action) — both frequently requested by ESG rating agencies.
Carbon Neutrality Pathway
Combined with I-RECs, solar allows companies to claim zero Scope 2 emissions for the renewable portion, supporting net-zero targets.
S — Social
Community Energy Programs
Companies that extend solar to nearby schools, surau, or community centres can report this as community investment under Bursa SO2 indicator.
Employee Well-being
Solar-powered facilities with better air quality and energy reliability demonstrate commitment to workplace safety and comfort.
Energy Access Contribution
Excess solar exported to the grid under Solar ATAP reduces pressure on national generation capacity and indirectly supports energy affordability.
G — Governance
Board-Level Climate Risk Management
A solar investment approved at board level demonstrates that climate-related financial risks (rising energy costs, carbon taxes) are being actively managed.
Transparent Reporting
I-REC certificates provide auditable, third-party verified proof of renewable energy use — reducing greenwashing risk in annual sustainability disclosures.
Long-Term Value Creation
25-year solar assets with measurable ROI demonstrate disciplined capital allocation and long-term thinking — both valued by institutional ESG investors.
Bursa Sustainability Framework: Solar Indicator Mapping
Which specific Bursa indicators your solar installation directly supports
| Code | Indicator | Unit | Solar's Impact | Priority |
|---|---|---|---|---|
| EN1 | Energy consumption | kWh | Reduces grid consumption; solar generation reported as renewable | Direct |
| EN2 | Energy intensity | kWh per RM revenue | Lowers intensity ratio — same revenue, less grid energy drawn | Direct |
| EN3 | GHG emissions (Scope 1 & 2) | tCO2e | Directly reduces Scope 2; solar displaces grid at 0.740 tCO2e/MWh | Direct |
| EN4 | GHG emissions intensity | tCO2e per RM revenue | Intensity ratio improves year-on-year as solar generates more | Direct |
| EN5 | Renewable energy usage | kWh & % of total | Solar generation = renewable energy; I-REC provides proof | Direct |
| SO2 | Community investment | RM value | Solar at schools, mosques, or community centres qualifies as CSR spend | Supporting |
| GO1 | Board sustainability oversight | Yes/No | Board-approved solar capex demonstrates governance commitment | Supporting |
Solar can contribute to several of the core environmental indicators (EN1–EN5) in Bursa Malaysia sustainability reporting; confirm which apply to your listing. See our ESG & RECs solutions page for more on I-RECs.
I-RECs: Your Greenwashing Prevention Tool
Why auditors, investors, and ESG raters increasingly require I-RECs
An I-REC (International Renewable Energy Certificate) is a standardised, tradeable certificate that proves 1 MWh of electricity was generated from a renewable source — in this case, your solar panels. Each I-REC is recorded on the I-REC Standard registry, issued by an accredited body, and can only be claimed once.
Without I-RECs, your solar renewable energy claim is self-reported — auditors, investors, and ESG rating agencies treat this as unverified. With I-RECs, your renewable claim is independently auditable, which rating bodies and lenders may ask for as supporting evidence; check their current criteria.
Without I-RECs
- ✗ Self-reported renewable claim
- ✗ Greenwashing risk flagged by auditors
- ✗ Cannot use market-based Scope 2 method
- ✗ ESG raters may discount or query data
- ✗ Sustainability-linked loan covenants may not accept
With I-RECs
- ✓ Third-party verified renewable claim
- ✓ Lower greenwashing risk
- ✓ Market-based Scope 2 = near zero for solar portion
- ✓ Check your rating body's published criteria (CDP, MSCI, Sustainalytics)
- ✓ Check SBTi renewable electricity procurement criteria
How I-REC Issuance Works
Solar system registered on I-REC registry
A registrant registers your installed system as an eligible renewable energy asset on the I-REC Standard registry.
Generation data verified monthly
Inverter generation data is aggregated and verified. 1 I-REC is issued per MWh of verified generation.
Certificates issued to your account
I-RECs are issued to your company's registry account annually, matching your reporting period.
You retire certificates for reporting
Retire (cancel) the I-RECs in the registry when you publish your sustainability report. This prevents double-counting.
Frequently Asked Questions
Common questions from CFOs and CSR Managers about solar and ESG compliance
Get Your ESG Solar Quote
Send us your TNB bills for a free quote. Your solar proposal can show estimated annual generation and the CO2 avoided, which you can use in your sustainability report.
Ask us to include estimated annual generation and CO2 avoided in your solar proposal. No commitment required.
Related Pages
Sustainability and ESG Reporting
Sustainability and ESG reporting support for Malaysian companies.
Renewable Energy Certificates (REC) Malaysia
How renewable energy certificates work in Malaysia.
Net Zero Roadmap for Malaysian Businesses
A net zero roadmap for Malaysian businesses.
Net Zero Buildings Malaysia 2026
Solar and green building certification for net zero buildings.
