Friday 24 May 2024
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PETALING JAYA (Dec 7): While environmental, social and governance (ESG) is the buzzword now, many consumers may not understand its meaning and what ESG entails, according to the experts during a panel discussion at the CEO Series 2023 Economy & Business Forum, organised by Rehda Institute on Thursday at the Le Meridien Hotel Petaling Jaya.

The panel for the forum’s third session, titled “Regional Real Estate and Development Trends”, saw panelists CBRE | WTW Malaysia group managing director Tan Ka Leong, FAR Capital chief executive officer (CEO) Faizul Ridzuan and Knight Frank Singapore head of Singapore research Leonard Tay discuss the ESG issue, along with moderator Sime Darby Property Bhd group managing director Datuk Azmir Merican.

Tay noted that in Singapore, industrial and commercial properties are the ones that involve the most in ESG-related requirements. However, he questioned consumers’ understanding of the term.

“Do they really know what ESG is? There is not enough transparent data on it. Everyone is confused but [just keep saying it],” he said.

Tan concurred and added on how the pendulum swings the other way of more ESG compliance, particularly in the corporate sector, where he has seen instances in which multinational corporations’ (MNCs) insist on getting an office space in a building that is complying with, or has the intention to comply with more ESG requirements.

“In Malaysia, ESG is more for commercial buildings (such as offices)... when MNCs come in, ESG is a requirement. [It requires] landlords to tell them their plans to transform the building into [becoming] ESG-compliant. It takes time for landlords [to plan it] because they need to strike a balance between the cost and return. At the same time, we have seen tenants moving out of a building because it is not ESG-compliant,” he said.

Faizul, meanwhile, noted that the implementation of ESG would be more efficient with the use of data, to know consumers’ preference in that perspective.

Tan added, “The cost to maintain a green building is not high, but it can attract higher-value tenants at a higher rate. It can be 10% higher”.

Edited ByWong King Wai
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