Environment, Social, and Governance Compliance Challenges Affecting Sustainable Urbanisation in Malaysian Real Estate Development

In the era of Malaysia's urbanisation agenda, the real estate sector is being put to the test to provide a balance between economic development and sustainability. Developers in the field of sustainable urbanisation can face opportunities and challenges related to Environmental, Social and Governance (ESG) compliance. This study will explore the challenges related to the ESG compliance of sustainable urbanisation in Malaysia’s real estate development. Firstly, it pinpoint issues relating to ESG through a series of pilot surveys and content analysis which is then broken down into eight sections: Environmental Impact (EI), Workplace Dynamics (WD), Infrastructure Development (ID), Urban Development (UD), Housing Finance (HF), Regulatory Compliance (RC), Tenure Legalities (TL) and Administrative Hurdles (AH). The second goal is to apply descriptive statistics and the Relative Importance Index (RII) method to assess and rank the ESG compliance challenges based on the perception of the respondents. The results show that the most important constraints on sustainable urbanisation are unrelenting bureaucracies and vague procedures (AH1), building plan approvals and permits (UD3), flooding (EI6), onerous regulatory frameworks (RC2) and worker shortages (WD7). Based on the study, several sub-challenges were found. However, the sub-challenges which are workplace democracy (WD1), equal employment opportunity (WD4), inadequate mortgage market (HF1), etc are not influential in the Malaysian context. The study also contributes to ESG and sustainable urbanisation literatures by proposing an integrated conceptual framework of how the environmental, social, governance, institutional and urban development barriers can be aligned in the real estate industry in Malaysia. The results offer practical guidance for developers, urban planners and policy makers in designing a more effective implementation of ESG and a more environmentally sustainable, socially inclusive and economically viable development in urban areas in Malaysia.

ESG compliance, sustainable urbanisation, real estate development, urban governance, Malaysia

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