Environmental, social and governance (ESG) compliance on construction projects

Wong, Yau Yii (2025) Environmental, social and governance (ESG) compliance on construction projects. Master dissertation/thesis, UTAR.

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Abstract

In Malaysia, the construction industry is a key driver of economic growth but also contributes significantly to environmental degradation, social inequalities, and governance-related challenges. Although Environmental, Social, and Governance (ESG) principles are gaining attention globally, the Malaysian construction sector still faces inconsistencies in ESG compliance due to varying levels of regulatory enforcement, limited stakeholder awareness, and the absence of a structured framework for implementation and reporting. This gap underscores the need for a systematic investigation into ESG practices within local construction projects. This study aims to examine the ESG criteria relevant to Malaysian construction projects, evaluate the extent of compliance, and propose practical strategies to improve ESG integration in future developments. A quantitative research approach was employed through the use of a structured questionnaire survey distributed to professionals across the construction industry. A total of 101 valid responses were collected from respondents comprising project managers, engineers, architects, quantity surveyors, contractors, and consultants, predominantly based in the Klang Valley region. The diversity in professional roles allowed for a comprehensive assessment of stakeholder perceptions and ESG awareness levels. Statistical analyses were conducted using Cronbach’s Alpha reliability test, Shapiro-Wilk test for normality, arithmetic mean ranking, Spearman’s rank-order correlation, and the Kruskal-Wallis H test to identify key compliance levels and inter-group differences. The findings reveal that Occupational Health and Safety, Standards and Regulations, Socio-Economic Development, Board Composition, and Workplace Well-Being are among the most prioritised ESG compliance criteria. The study also identifies actionable strategies for improving ESG compliance, such as the popularisation of Building Information Modelling, enhancement of ethical leadership, and adoption of advanced technologies. These findings contribute to the broader understanding of ESG implementation in Malaysian construction projects and provide valuable recommendations for policymakers, regulatory bodies, and industry practitioners. Ultimately, this study supports national sustainability objectives and serves as a foundation for further studies on ESG integration in the built environment.

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