Increasing ESG adoption among local property developers a strong move towards sustainable living

Focus Malaysia

a day ago

PROPERTY companies in Malaysia saw higher adoption of Environment, Social and Governance (ESG) practices as a commitment to sustainability.
Adoption of ESG practices bring economic benefit to the companies such as lower energy consumption, lower resource waste and reduction in operating costs.
ESG adoption is also a risk management process that looks beyond financial risks, managing the risks and opportunities from changing conditions of environment, social systems and governance.
Meanwhile, developers that have investment properties namely Sunway Berhad and IOI Properties introduced green lease for tenants in achieving sustainability goal.
Green lease is a leasing agreement with additional clauses which tenants gain incentives by participating in water and energy conservation as well as waste reduction.
Besides the profit-maximization incentives, we believe that developers also have an important mission of building quality homes for better living of people.
In this context, developers use QLASSIC scores to assess the quality of their newly completed buildings and to evaluate the performance of contractors.
As Malaysia is facing housing affordability issues due to supply-demand mismatch, property developers are playing an important role to increase supply of affordable home in Malaysia.
Under 13th Malaysia Plan (13MP), the government aims to build one million affordable homes between 2026-2035 to enhance housing affordability and accessibility for low and middle-income Malaysians.
Mah Sing Group is participating in several federal and state government housing programs such as Residensi Madani and Rumah Selangorku (RSKU).
In August 2024, Mah Sing launched Residensi Suria Madani in Taman Desa which offers 800 units, each with a built-up of 800sf and priced from RM200k.
Meanwhile, IOI Properties Group contributed to affordable housing development by launching 1,170 units of homes in FY24 priced within the affordability levels stipulated by the respective state governments.
As property companies involved in construction projects, most of the property companies set annual target of zero work-related fatalities for both employees and contractors.
Property companies enhance occupational health & safety (OSH) procedures, aiming to reduce incident risks, minimize injury rates and achieve zero fatality at project site.
Some common practices under OSH are conducting monthly safety meetings and step-by-step protocol on how safety and health at project sites are managed.
In conclusion, we observed that property companies under our coverage saw higher adoption of ESG practices due to growing concerns about environmental impacts, social and governance issues.
It shows property companies are adopting more robust ESG practices to align with stakeholder expectations.
In short, we believe that embracing ESG principles is a pathway to long-term value creation, enhancing brand reputation and support long-term financial performance.
Going forward, we anticipate deeper integration of ESG principles into investment decisions and operations of property companies as we believe ESG can help property companies make sound decisions and achieve better long-term returns. —Aug 15, 2025
Main image: Propertyguru