Achieving Environmental Social Governance (ESG) Compliance by Implementing ISO 14001 Environmental Management System (EMS) in Malaysia

Chiang, Xin Yu (2025) Achieving Environmental Social Governance (ESG) Compliance by Implementing ISO 14001 Environmental Management System (EMS) in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

The increasing global warming is primarily due to rising greenhouse gas emissions, where air pollution is linked to adverse human health effects that worsen the quality of life. In Malaysia, air quality issues prompted growing pressure from stakeholders for companies to integrate sustainability into their operations to struggle with climate change. Malaysian companies have started emphasising participating in the ISO 14001 Environmental Management System (EMS) certification for Environmental, Social and Governance (ESG). Therefore, the purpose of this research is to explore the achievement of ESG from implementing ISO 14001 EMS in Malaysia based on the benefits of implementing ISO 14001 EMS on ESG compliance, key factors for successful implementation of ISO 14001 EMS in Malaysia as well as the ESG initiatives implemented by Malaysian companies to achieve ESG compliance. The research methodology involved distributing the online questionnaire method by Google Forms via emails to targeted respondents on Architect, Engineering and Construction (AEC) industry in Malaysia, hence a total of 84 respondents has provided their comprehensive understanding on ISO 14001 EMS and ESG. IBM SPSS Statistics 26 from Statistical Package for the Social Sciences (SPSS) was employed in descriptive and inferential statistics such as independent sample t-test to examine the collected data. A comparative analysis was conducted between certified and non-certified ISO 14001 EMS companies. The research findings revealed that most respondents’ companies are certified with ISO 14001 EMS. The respondents have substantial knowledge of sustainability and environmental performance within the industry based on their high level of agreement on implementing ISO 14001 EMS on ESG compliance, key factors for successful implementation of ISO 14001 EMS and the high level of awareness of the ESG initiatives implemented by Malaysian companies. The results show the majority have no significant differences among the respondents’ companies with certified and non-certified ISO 14001 EMS, highlighting both groups have similar perspectives on the ESG framework. However, the research limitations include time constraints, response accuracy and lack of prior studies on this topic in Malaysia. Therefore, further studies, including exploring alternative data collection methods, explore the influences of ISO 14001 EMS certification on ESG compliance in Malaysia and a broader range of ESG initiatives. In conclusion, companies are strongly recommended to implement ISO 14001 EMS as a tool to enhance their ESG performance