Sustainability auditing and reporting in Malaysia: Strengthening transparency, accountability, and corporate responsibility

Abstract

This study examines how sustainability audit functions improve transparency and corporate accountability in Malaysian organizations, fight greenwashing, and build investor trust while meeting global regulatory ESG reporting requirements. Many studies have explored sustainability reporting in Malaysia, but few have critically examined the role and effectiveness of sustainability audits in maintaining report credibility. Decision-makers and environmental auditors from 200 regional and national governmental entities participated in the study. Positive correlations were found between organizations with independent sustainability and superior ESG disclosure using statistical methods (PLS). Additionally, sustainability audit frequency enhances environmental sustainability and institutional transparency. Larger companies conduct more sustainability audits. This study contributed to standardizing sustainability certification frameworks, which will create uniformity and comparable measures across industries. The paper suggests that large firms should conduct sustainability audits by legislation, financially reward institutions, and use AI and blockchain technology to optimize audit procedures and reduce costs. The research promotes Malaysian emerging market sustainability, regulatory, and financial transparency knowledge. Additionally, the findings shed light on how frequent sustainability audits in Malaysian public institutions improve environmental sustainability and institutional openness.