Purpose This study aims to address the persistent fragmentation in sustainability reporting within the insurance and takaful sector, resulting from the coexistence of multiple frameworks, including the International Sustainability Standards Board (ISSB), European Sustainability Reporting Standards (ESRS) and Global Reporting Initiative (GRI). The research develops and empirically applies the Unified Sustainability Harmonisation Score for Insurance/Takaful (USHS-I/T), providing a structured tool to benchmark disclosure quality and align global standards with industry-specific requirements. Design/methodology/approach The study adopts a conceptual and comparative framework-building approach supported by Delphi validation with regulators, academics and practitioners. A crosswalk of ISSB, ESRS, and GRI indicators was classified into four dimensions: Environmental, Social, Governance, and Finance-specific, and scored using a weighted three-point system. The framework was empirically applied to Malaysian insurers and takaful operators (2021–2023 reports), and reliability was confirmed through Cronbach’s α (0.90), split-half and inter-coder tests. The framework also differentiates between narrative and measurable disclosures, recognising that qualitative explanations are important for contextual interpretation while quantitative indicators are essential for comparability and assurance. Findings The results demonstrate strong convergence in climate-related and governance disclosures, while significant gaps remain in biodiversity, claims fairness and finance-specific indicators such as environmental, social and governance (ESG)-adjusted solvency ratios. Conventional insurers outperform takaful operators in governance and finance-specific metrics, whereas takaful operators show strengths in community engagement and ethical governance structures associated with Shariah oversight rather than theological compliance. The study explicitly clarifies that these governance structures are treated solely as institutional mechanisms and are excluded from ESG scoring to preserve universality and comparability. Research limitations/implications The study is based on secondary disclosure data from a Malaysia-specific sample, which limits generalisability across regions. Nevertheless, it opens pathways for cross-country comparisons, longitudinal studies and further integration of impact assessment into harmonisation models. The reframing of Shariah governance as an ethical construct enhances the transferability of the framework across diverse institutional settings. Practical implications The USHS-I/T framework provides regulators with a benchmarking tool to enhance disclosure comparability, supports insurers and takaful operators in identifying reporting blind spots, and offers investors a transparent metric for evaluating ESG credibility. Social implications By emphasising universal ethical principles reflected in Shariah governance rather than religious conformity, the framework encourages takaful operators to strengthen financial inclusion, community support and responsible conduct while aligning with global sustainability standards. This supports greater stakeholder trust and positions insurance and takaful institutions as contributors to sustainable finance ecosystems. Originality/value To the best of the authors’ knowledge, this study is among the first to operationalise a harmonised ESG and finance scoring model for insurance and takaful by integrating ISSB, ESRS and GRI into a unified, decision-useful framework. The study offers a secular, universally applicable harmonisation model that accommodates industry-specific governance structures without embedding theological content into ESG measurement. It advances theoretical discourse by linking legitimacy, stakeholder and institutional perspectives to a validated scoring protocol, providing a practical tool for accelerating disclosure harmonisation in emerging markets.
Zain et al. (Fri,) studied this question.