The Role of Contract in Advancing ESG in Construction: A Proposed Framework of ‘Green’ Standard Form of Contract for Use in Green Building Projects in Malaysia

Abstract

The Malaysian construction industry is working to create a more sustainable built environment in response to the worldwide agendas for ‘Sustainable Development’ (SD) and ‘Sustainable Development Goals’ (SDGs). In tandem with SDG 17—Partnerships for the Goals, a mechanism or an instrument must be in place to bring industry participants together to cultivate a sustainable construction ecosystem in both processes and the end result, i.e., ‘green’ or sustainable buildings. This paper focuses on the role of contracts in meeting these objectives; particularly the construction industry’s prevalently used standard contract forms. This study aims to determine how Malaysia’s most used standard contract forms could be improved to meet the specific needs, approaches, and risks of green building construction. In Malaysia, no standard form has yet been developed specifically for green building projects. This study employed doctrinal legal research methodology to highlight the gaps in the standard contract instruments and recommend a solution using descriptive analysis, content analysis, and analytical analysis approaches. The relevant Malaysian rating tools were examined and critically evaluated within the common structure of the standard contract forms. These analyses developed a model framework of a ‘green’ standard form of contract for use in green building construction in Malaysia. The model framework allows green-specific terms and conditions to be added to the standard forms as the governing contract. It recommends areas and strategies for a well-drafted green standard form of contract for green building projects in Malaysia.