Kasikorn Research says Malaysia's adoption of ASEAN Taxonomy will affect 4 Thai industries
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Bank Negara Malaysia and the Securities Commission Malaysia have announced a revision of the Malaysia Taxonomy framework, fully adopting the ASEAN Taxonomy for Sustainable Finance as its primary foundation. It will first be piloted with selected participants, with the goal of mandatory use for official reporting by 2028. An analysis by Kasikorn Securities indicates that this change will create pressure and new opportunities for Thai operators in Malaysia's supply chain, particularly in four industries: natural rubber and primary rubber products; petrochemicals and chemicals; agriculture and processed food; and automotive parts and metal components. These will be required to deliver factory- or product-level in-depth data, including greenhouse gas emissions, greenhouse gas emission intensity, energy use, water, waste, and land use, instead of responding to general ESG questionnaires. The analysis notes that Thai businesses already operating under the Thailand Taxonomy have an edge, but the two systems cannot be directly compared across all criteria due to differences in technical screening criteria and the classification of Green versus Transition, such as in the steel industry where Thai and ASEAN criteria set different conditions. Operators should therefore build environmental data architecture ready to be linked through six steps, in order to reduce compliance costs and maintain competitive advantage.