Implementing Environmental, Social, and Governance (ESG) Reporting (IFRS S1 and S2) for VEB in the Malaysian Main Market Energy Services Sector

Bayin, Enzelia Angelina (2026) Implementing Environmental, Social, and Governance (ESG) Reporting (IFRS S1 and S2) for VEB in the Malaysian Main Market Energy Services Sector. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

Due to the sensitivity of the information about the company visited, the study team has been required not to disclose the company’s name. As such, the company is named V Energy Berhad or in short “VEB” in the report. This study examines VEB's readiness to transition from optional sustainability reporting to compliance with the mandatory standards set by the International Sustainability Standards Board (ISSB), particularly IFRS S1 and S2. With a growing global and Malaysian focus on the need for transparent and trustworthy reporting, especially following the introduction of Malaysia's National Sustainability Reporting Framework (NSRF), energy service companies are under pressure to demonstrate their financial stability and ability to withstand climate risks. The research employs a mixed-methods "triangulation" approach, combining a technical document analysis of VEB’s FY2025 Annual Report against IFRS standards, semistructured interviews with senior leadership, and a quantitative materiality assessment survey. The study adopts a "Climate-First" scope, prioritising immediate regulatory requirements for climate-related financial disclosures (IFRS S2). The gap analysis reveals that VEB is currently at an early stage of readiness, fully meeting only 12% of relevant IFRS S1 and S2 requirements, while 82% of IFRS S2 indicators remain undisclosed. Critical gaps have been identified in governance, strategy, risk management, and metrics & targets, revealing siloed climate oversight in HSE functions, a lack of quantitative climate scenario analysis for business resilience, the absence of formal recognition of climate risk in the ERM framework, and significant data gaps in reporting Scope 3 emissions and tracking "Green CapEx. The study highlights the need for VEB to make a critical change in its corporate culture, moving away from a "Safety-First" mindset to a focus on "Sustainability-First." It outlines a plan for rolling out this transition between 2025 and 2028. The recommendations include leveraging regulatory support during the transition, introducing "shadow KPIs" to monitor emissions in preparation for future performance-based rewards, and prioritising climate risk discussions at the Board Risk Committee level. By addressing these issues, VEB could improve its chances of securing green financing, safeguard its asset values from potential stranding risks, and position itself as a leader in the emerging decarbonised energy services market