Kuala lumpur: Property companies in Malaysia have increased their adoption of environmental, social, and governance (ESG) practices, driven by growing concerns over such issues and reflecting their commitment to sustainability, said MBSB Investment Bank.

According to BERNAMA News Agency, a research note from the investment bank highlighted the various benefits of ESG practices, including lower energy consumption, reduced resource waste, and lower operating costs. The note emphasized that ESG adoption serves as a risk management process that addresses risks and opportunities beyond financial metrics.

Property companies in Malaysia are incorporating sustainable design into their project planning by allocating a certain percentage of open green areas within developments and applying for green certifications, such as GreenRE or the Green Building Index (GBI). The investment bank stated that most developers are leveraging renewable energy by installing solar panels, incorporating rainwater harvesting systems, installing LED lighting, and providing electric vehicle charging stations.

MBSB Investment Bank pointed out that beyond profit-maximization incentives, developers also have the crucial mission of building quality homes to improve living standards. The report indicated that developers are adopting more robust ESG practices to align with stakeholder expectations, with the FTSE4Good Bursa Malaysia Index serving as a significant benchmark for ESG ratings. It anticipates deeper ESG integration principles in investment decisions and operations among property companies.

Leading the charge in ESG adoption through sustainable design and renewable energy usage are Mah Sing Group, Sunway Bhd, Eco World Development Group Bhd, and IOI Properties Group Bhd.