ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) COMPLIANCE AS A COMMERCIAL LAW IMPERATIVE: IMPLICATIONS FOR CORPORATE GOVERNANCE IN NIGERIA
The global movement toward sustainable investment has repositioned Environmental, Social, and Governance (ESG) considerations from a peripheral corporate social responsibility exercise into a core commercial law concern. This article interrogates the extent to which ESG compliance has become, or ought to become, an imperative of commercial law in Nigeria, with particular attention to disclosure obligations, corporate accountability, and investor protection. Relying entirely on secondary data drawn from statutes, regulatory instruments, and published scholarship, the study adopts a doctrinal and analytical approach, situating its argument within stakeholder theory and legitimacy theory. The discussion traces the trajectory of ESG regulation in Nigeria, from the largely voluntary sustainability provisions of the Nigerian Code of Corporate Governance 2018 and the Companies and Allied Matters Act 2020, through the Securities and Exchange Commission’s Sustainable Finance Principles and the Nigerian Exchange Group’s Sustainability Disclosure Guidelines, to the Commission’s recently announced phased mandate for sustainability reporting commencing in 2027. The article argues that although Nigeria’s regulatory architecture increasingly gestures toward mandatory ESG disclosure, enforcement remains fragmented across multiple agencies, penalties are comparatively weak, and investor remedies for ESG-related misrepresentation are underdeveloped relative to jurisdictions with consolidated sustainability reporting directives. Drawing on recent Nigerian empirical literature on ownership structure, board characteristics, and ESG disclosure quality, the article contends that meaningful ESG compliance cannot be achieved through disclosure guidelines alone but requires an integrated commercial law framework linking company law, securities regulation, and investor protection mechanisms. The article concludes by recommending statutory codification of ESG disclosure duties within the Companies and Allied Matters Act, harmonisation of SEC and NGX requirements, and the creation of a dedicated enforcement and redress mechanism for ESG-related corporate misconduct.
Keywords: ESG compliance, commercial law, corporate governance, sustainability disclosure, investor protection, Nigeria
