Malaysia's Property Companies Embrace Environmental, Social and Governance Practices

Strategic Insights -

Malaysia's property companies have significantly increased their adoption of environmental, social and governance (ESG) practices in recent years, driven by growing concerns over the environment and a commitment to sustainability. This shift towards ESG is fueled by the recognition of its numerous benefits, including reduced energy consumption, waste reduction, and lower operating costs. Property developers are incorporating sustainable design into their project planning, allocating green areas, and obtaining green certifications, such as GreenRE or the Green Building Index (GBI). Many developers are also leveraging renewable energy by installing solar panels and implementing rainwater harvesting systems.

Key Takeaways:

  • MBSB Investment Bank reported that property companies in Malaysia have increased their adoption of ESG practices, driven by concerns over the environment and a commitment to sustainability.
  • ESG practices offer benefits such as lower energy consumption, reduced resource waste, and lower operating costs.
  • Property companies are incorporating sustainable design into their project planning by allocating green areas and obtaining green certifications.
  • Most developers are leveraging renewable energy by installing solar panels and implementing rainwater harvesting systems.
  • Beyond profit-maximisation incentives, developers also have a mission to build quality homes and improve living standards.
  • The FTSE4Good Bursa Malaysia Index is a key benchmark for ESG ratings, with property companies adopting more robust ESG practices to align with stakeholder expectations.
  • Mah Sing Group, Sunway Bhd, Eco World Development Group Bhd, and IOI Properties Group Bhd are leading in ESG adoption through sustainable design and the use of renewable energy.
  • Sustainable design and renewable energy adoption are expected to become deeper integration principles in investment decisions and operations among property companies.

Statistics:

  • Property companies in Malaysia have increased their adoption of ESG practices.
  • 100% of the surveyed property companies in Malaysia have incorporated sustainable design into their project planning.
  • 74% of property companies have allocated a certain percentage of open green areas within developments.
  • 85% of property companies have obtained green certifications, such as GreenRE or the Green Building Index (GBI).
  • 90% of property companies have installed solar panels to reduce greenhouse gas emissions.
  • 80% of property companies have implemented rainwater harvesting systems.

Sources:

  • BERNAMA News Agency (14 Aug 2025)
  • MBSB Investment Bank (Research note)