Myanmar

A. ESG Reporting

1. Are there legal or regulatory requirements for companies to make ESG disclosures in your jurisdiction?

Yes.

2. What are the key legislative and regulatory sources for ESG disclosure requirements and to whom do they apply?

ESG disclosure requirements primarily apply to companies (i) which possess investment permits / endorsements issued by the Myanmar Investment Commission and are considered to have “a large potential impact on the environment and the local community”; and/or (ii) whose business activities are subject to environmental impact assessments / initial environmental examinations (together, the In-Scope Companies). The requirements include:

(a) The Myanmar Investment Law and the Myanmar Investment Rules (Investment Laws), which require companies subject to environmental and social impact assessments to report their compliance status on a regular basis. Furthermore, such companies are required to submit a compliance report within 3 months after the end of each financial year in the prescribed form to the Myanmar Investment Commission to report on the impact of the approved investments on the environment and local community.

(b) The Environmental Conservation Law and its subordinate legislation, being the Environmental Conservation Rules and the Environment Impact Assessment Procedures (Environmental Conservation Laws), which prescribe the types of business activities subject to prior environmental assessments and set out disclosure requirements for such businesses, including the disclosure of the initial environmental reports and continuous reporting obligations.

Companies listed on the Yangon Stock Exchange (YSX) and public companies having more than 100 shareholders are required to submit a directors’ report annually to the Securities and Exchange Commission (SEC) and the Directorate of Investment and Company Administration (DICA). The directors’ report shall disclose all risks and uncertainties faced by the company, although no specific references to environmental related matters are mentioned under the law for making such disclosures. Furthermore, such companies are subject to continuous disclosure requirements to report to the SEC and DICA on any material changes in a timely manner.

As part of Myanmar’s response to the Extractive Industries Transparency Initiative, all companies incorporated in Myanmar are required to disclose beneficial owners and whether they are related to any politically exposed person.

3. Are the requirements mandatory or do they apply on a comply-or-explain basis?

The disclosure requirements specified in section A.2 above are mandatory.

4. Which aspects of ESG do the requirements focus upon?

For In-scope Companies, the focus is on environmental and social aspects.

For financial institutions, the additional focus is on anti-money laundering and anti-bribery.

5. Are the disclosure requirements based on international standards? If so, which one(s)?

The disclosure requirements for In-Scope Companies are not generally based on international standards.

The disclosure requirements relating to beneficial ownership and politically exposed person replicate the corresponding concepts in the Extractive Industries Transparency Initiative Standard 2019.

6. How do the disclosure requirements approach materiality (e.g. single or double materiality)?

The disclosure requirements for In-Scope Companies adopt a double materiality approach whereas a single materiality approach applies to YSX-listed companies and financial institutions.

7. Are there requirements for the disclosure of GHG emissions? If so, please specify the scope (e.g. Scope 1, Scope 2 and/or Scope 3), to whom they apply and whether there are requirements on the measurement methodology.

No.

8. Are there requirements to obtain independent assurance of any ESG disclosures? If so, what is the scope of such requirements?

No. Though on a related point, where the Ministry of Natural Resources and Environmental Conservation identifies non-compliance with environmental rules by an investor, it has the authority to engage a third-party expert to assess the investor’s compliance status. 

9. For companies not subject to mandatory or comply-or-explain ESG reporting, are voluntary ESG disclosures customary?

No, but a YSX-listed company has been making voluntary disclosure of their sustainability practices and initiatives.

10. Has your jurisdiction issued or adopted a taxonomy on sustainable activities? Is it mandatory and what is its scope of application?

No.

11. Are there plans to adopt or incorporate the ISSB’s IFRS S1 and/or S2 standards? If so, please indicate the extent of alignment, to what extent the standards will be mandatory, to whom they will apply and the timeline.

No.

12. Other upcoming developments / direction of travel

We are not aware of any recent development in ESG reporting requirements