ESG adoption within the local real estate market

Contributed To The Star

ESG adoption in Malaysia has become a norm instead of gimmick or "white-washing" ...

1.  Are you seeing a pick-up in ESG adoption within the local real estate market in 2025? Is it within expectations?

Yes.  It is within expectation.

2.  What are some of the benefits of ESG adoption in real estate, in your opinion? Do you believe properties with more ESG adoption will continue to be relevant and be more attractive to buyers and investors?

To recap, ESG stands for environment, sustainability and governance.  It is a framework used to assess the sustainability and ethical impact of a company or investment.  Essentially, it's a set of criteria used to evaluate how well a company manages its environmental footprint, social responsibility and corporate governance practices.

ESG adoption in real estate development ensures long-term compliance of environmental integrity and conformity of ethical practice.  Such practice will definitely become more prevalent moving forth in view of the challenges such as global warming and extreme temperature changes, rapid building obsolescence due to lousy construction method and sloppy maintenance, lack of ethical and proper governance control in the whole development cycle.  All the malpractices if not curtailed in the initial stage of the development cycle, the adverse impact will eventually manifest itself subsequently.  The risk to the buyers and investors will be very high and likely a costly one.

3.  How do you see the outlook for ESG adoption in the property market, going forward?

In view of the articulation above, adoption of ESG in the property market will be increasingly common and become a norm rather than a mere white-washing or marketing gimmick.  Another likely trend after a simple ESG adoption in the construction and development stage, there will be further integration of ESG practice right from the acquisition and planning phase to the eventual stages of building completion, maintenance, leasing and asset management.

Contributed by

Sr Tan Wee Tiam

Executive Director

Olive Tree Property Consultants