JUNE 19 — This year, Malaysia’s public listed construction firms will publish their first NSRF-aligned sustainability reports. The carbon figures inside those reports will be real, but the methodological foundation they rest on is not: There is no localised carbon accounting framework for Malaysian construction, no standardised protocol for on-site emissions, and no mandate on how those figures should be derived.

That is not an accusation. It is a structural problem, and one has not been solved. When Malaysia’s first construction-sector Illustrative Sustainability Report in October 2025, it gave the industry a model of what to disclose. What it could not give the industry was the data to put inside it. That distinction is the most important conversation Malaysian construction sector is not yet having.

The numbers tell the story. In Malaysia’s 2023 reporting cycle, only 11 per cent of publicly listed companies disclosed any Scope 3 emissions, compared with 39 per cent across Asia-Pacific. Scope 3 is where construction’s real carbon footprint sits; embodied carbon in steel, concrete, and glass; emissions from subcontractors and logistics; upstream material extraction. The other 89 per cent either did not disclose or disclosed only Scope 1 and 2, the smaller and more visible slices.

From 2027, Scope 3 disclosure becomes mandatory for Group 1 firms. The gap between current practice and that deadline is not a communications problem. It is a data infrastructure problem.

The deeper issue is that even the Scope 3 figures that do appear in Malaysian construction reports are largely modelled, possibly limitedly measured. CIDB’s Embodied Carbon Inventory stands as construction sector’s primary reference consolidates emission factors from local, regional, and international sources, including Environmental Product Declarations from Southeast Asia, Singapore’s BECC, SIRIM, and the UK’s Inventory of Carbon and Energy. Its sourcing hierarchy prioritises local data first, which is the right design principle. The problem is that approximately 600 material records, spread across a sector that uses thousands of specifications across vastly different site conditions, supply chains, and regional climates, is a foundation and not yet a mechanism. Where local data is absent, the inventory defaults to international figures calibrated to foreign manufacturing conditions and energy mixes, and the gap in local coverage means that happens more often than the hierarchy implies.

But the more significant omission is what the inventory does not attempt to cover at all: Carbon released from construction activities on site. Fuel combustion from excavators, cranes, and generators; waste disposal; temporary works globally, transport, services, machinery, and on-site activities account for 37 per cent of the construction industry’s total carbon footprint. In Malaysia, there is no standardised quantification mechanism for any of it. The NSRF mandates disclosure. It says nothing about which emission factors to use, which on-site activities to account for, or which methodology governs the number that ends up on the page. Without a structured and standardised carbon reporting mechanism, two construction firms of identical size and activity can report vastly different carbon figures and both be fully compliant. Yes, the framework tells the industry what to say. It has not told the industry what the number must actually mean.

This is not a uniquely Malaysian problem, but Malaysia is heading toward a uniquely Malaysian version of its consequences. In Australia, the Australian Securities and Investments Commission has pursued civil penalties against companies that published credible-looking sustainability disclosures without the underlying data to support them. Singapore’s Competition and Consumer Commission issued formal anti-greenwashing guidance in October 2025, putting companies on notice that plausible environmental claims are not the same as substantiated ones. The trajectory across Asia-Pacific is clear: Regulators are moving from requiring disclosure toward requiring verifiable disclosure. Malaysia’s enforcement posture has not yet arrived there, but the ACSR has already signalled it will act on non-compliance. When verification standards follow, construction firms carrying Scope 3 estimates dressed as measurements will face a credibility reckoning and so will the investors relying on their reports.

Bursa Malaysia’s CSI platform, built with the London Stock Exchange Group and already used by over 130 companies, offers Scope 3 emissions estimates through modelled supplier engagement tools. For companies with no starting point, this is useful. But the CSI FAQ is explicit: “The Scope 3 data generated is an estimate and does not absolve your organisation from your fiduciary duty to get the data audited”. The platform is a bridge, not a destination. Large listed developers and main contractors are using it as though it is the latter.

The fix requires action from two bodies, not one. SC Malaysia should move beyond the current reporting template and mandate a minimum carbon calculation standard for construction carbon data, specifying which emission factors are permissible, which on-site activity categories must be accounted for, and on what timeline firms must move from modelled estimates to primary supplier data, with assurance requirements as a stated regulatory expectation rather than an optional upgrade. CIDB, separately, must commission a Malaysia-specific embodied carbon database built on local manufacturing data, actual Malaysian grid emission factors, and domestically verified supply chain benchmarks. CIDB’s quantified construction sector emissions back in 2020. A localised emission factor dataset is the natural next publication and it is years overdue.

Standardised, localised carbon data is not merely a reporting quality issue. It is the precondition for Malaysia’s net zero ambition to mean anything. When construction firms calculate their carbon using consistent, verified, Malaysia-specific methodologies, the resulting data becomes aggregable. Regulators can track the sector’s actual emissions trajectory, identify where reductions are happening and where they are not, and design policy interventions that respond to real numbers rather than methodologically inconsistent estimates. Without that foundation, Malaysia’s construction sector can produce thousands of sustainability reports and still leave the government unable to answer the most basic question the net zero target demands: Are we actually reducing, and by how much?

Malaysia’s construction sector has spent the last twelve months learning how to write sustainability reports. The next twelve months will reveal whether those reports describe the sector as it actually is, or as it would prefer to appear. That question has consequences well beyond investor confidence and procurement eligibility. It determines whether Malaysia’s path to net zero is built on evidence or on paperwork. The carbon number in a sustainability report is either a tool for change or a placeholder for one. Right now, without standardised carbon accounting in construction, it is the latter.

* The authors are from te Faculty of Built Environment, Universiti Malaya. They can be reached at zafiranadia@um.edu.my and zshuhada@um.edu.my

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.