Navigating the New Climate Order: Sustainable Development in Malaysia's Real Estate Sector Between East and West

Abstract

This study explores the dynamics of the Malaysian real estate industry in adopting sustainable development against the changes in global climate governance and rivalry among major economies such as the United States, China/BRI, ASEAN, and BRICS. The methodology employed is an integrative systematic review adopting a PRISMA approach that combines peer-reviewed sources and selective gray literature such as government and business reports. The systematic search produced a total of 87 core publications augmented by 10 other relevant peer-reviewed empirical sources, which generated 97 studies in total. Four peer-reviewed sources and one government report on benchmarking buildings' performance data were included in order to supplement later evidence in 2025, bringing the total number of reviewed sources to 101. This study critically analyses quantitative and qualitative evaluations regarding the development of policies, green financing, corporate sustainability, and building performance from 2020 to 2025. Buildings certified by the GBI outperformed their conventional counterparts in both energy efficiency and water efficiency; Malaysia has distinguished itself in the region for its green and sustainability sukuk and is an established leader in Islamic green finance; and there is growing evidence that ESG factors are becoming important in driving business practices in premium office space and data center sectors. Yet it also reveals ongoing deficiencies, such as organizational causes of the building-energy performance gap, lack of water-performance measures, and unequal availability of green financing beyond large public firms and GLCs. The study is a demonstration of the multi-alignment policies adopted by Malaysia as it caters to Western ESG concerns, Chinese technological dependence, and regional trends in institutional governance through various climate finance channels and regulatory alignment to ensure policy independence. The study captures the following three policy objectives: enhanced performance-based building regulation, expanded access to green and sustainability-linked financing, and regional platform utilization for technology transfer and standardization as a structured template for other developing nations grappling with similar geopolitics and sustainability challenges.