Environmental, Social, And Governance (ESG) Metrics And Nigeria’s Energy Transition: Towards Legal Integration In The Oil And Gas Sector

Abstract

The growing influence of global Environmental, Social, and Governance (ESG) frameworks and judicial interventions in shaping binding corporate obligations has raised questions about ESG compliance in Nigeria’s oil and gas sector. As environmental concerns intensify, investors and regulators are placing greater emphasis on ESG metrics to influence operational practices. In the energy sector, ESG considerations increasingly shape investment trends, regulatory reforms, and corporate sustainability strategies. As Africa’s largest oil producer, Nigeria’s integration of ESG standards is vital for achieving a balanced energy transition that promotes environmental sustainability, economic growth, and social equity. This paper explores how global ESG metrics influence Nigeria’s shift toward sustainable energy, with a focus on legal frameworks guiding ESG adoption in the oil and gas industry. It employs a doctrinal methodology, combining comparative analysis of global ESG practices with the legal, policy, and regulatory landscape in Nigeria. The paper finds that ESG implementation in Nigeria is limited by weak enforcement mechanisms and gaps in the legal and institutional framework. It identifies key challenges and opportunities in ESG integration and proffers actionable recommendations. These include legal reforms such as amending the Climate Change Act 2021 and the Petroleum Industry Act 2021, establishing specialized courts to adjudicate ESG-related disputes, and balancing energy security with ESG compliance to support efficient, low-carbon fossil fuel production without compromising energy supply.