Africa's ESG Story: Environmental Regulations in Kenya and Nigeria

Africa is known to contribute only about 4% of the world's total carbon emissions. Even on a per capita basis, its carbon emissions are the lowest compared to other continents. Although most African countries face urgent challenges such as expanding basic infrastructure facilities like education, transportation, and hospitals, making it realistically difficult to devote significant efforts to climate change response, some countries share the international commitment to strengthening ESG environmental regulations by introducing institutional regulations focused on imposing corporate environmental taxes and enhancing companies' environmental protection obligations.

[Image source=Beomryul Newspaper]

Kenya and Nigeria, representing economic growth countries in East and West Africa respectively, are among those participating in the strengthening of ESG environmental regulations. This article briefly examines the ESG environmental protection systems of these two countries.

■ Kenya

Kenya demonstrates a strong commitment to environmental conservation through Article 42 of the Constitution of Kenya, 2010 (hereinafter "Kenya Constitution"). It states that "every person in Kenya has the right to a clean and healthy environment." Additionally, Article 69 of the Kenya Constitution emphasizes the government's duty to conserve the environment. Based on the spirit of the Kenya Constitution, The Climate Change Act, 2016 was enacted to achieve carbon reduction and respond to the climate crisis. Accordingly, the Kenyan government has announced the National Climate Change Action Plan and revises it every five years. As a signatory to the Paris Agreement, Kenya's National Climate Change Action Plan contains detailed national-level plans and achievement targets to comply with the treaty. Alongside this action plan, the government's economic growth plan Vision2030 also shares this spirit through carbon reduction, pollution improvement, and waste management. In 2017, the Ministry of Environment banned the use, production, and import of plastic bags for household and commercial use, and from 2020, single-use items such as plastic containers and straws were banned in public places like national parks and protected areas.

Furthermore, corporate policies are also being promoted. Eco-friendly companies receive incentives such as value-added tax exemptions and corporate tax reductions, while punitive regulations at the Corporate Governance level have been introduced. One such punitive regulation is the Environmental Management and Co-ordination Act, which imposes environmental protection responsibilities and civil and criminal liabilities on corporate directors. The National Environment Management Authority (NEMA) is responsible for filing criminal lawsuits against corporate executives who violate these regulations.

■ Nigeria

Nigeria is also a signatory to the Paris Agreement and is strengthening regulations for environmental conservation. According to research by the International Rescue Committee and the World Resources Institute, Nigeria experiences increased frequency and intensity of natural disasters due to climate change and ranks within the top 10 countries on the World Climate Change Vulnerability Index. The floods at the end of 2022 affected 2.5 million Nigerians and caused severe damage to farmland, leading to widespread food shortages in 2023.

There are three major laws related to environmental conservation regulations. First, The Companies and Allied Matters Act 2020 is the primary law governing companies operating in Nigeria, imposing a duty on senior management to carefully review potential environmental impacts caused by company operations. The Climate Change Act 2021 (CCA), enacted after signing the Paris Agreement, commits to contributing to keeping global temperature rise below 1.5 degrees Celsius by achieving carbon neutrality by 2050. To achieve this, the CCA imposes detailed obligations on government ministries, public enterprises, and private companies. For example, the National Council on Climate Change establishes the National Climate Change Action Plan, and companies with more than 50 employees are required to develop and implement detailed annual carbon reduction plans. Lastly, Nigeria's Petroleum Industry Act 2021 applies to the upstream, midstream, and downstream sectors of the oil industry, requiring petroleum license holders to submit and implement environmental protection plans and pay environmental funds. Additionally, the Energy Transition Plan (ETP) 2022 sets strategies and schedules to achieve Net Zero by 2060 in sectors such as oil, gas, power, transportation, food, and certain manufacturing industries (cement, ammonia).

This article has examined Kenya and Nigeria, representative countries in Africa, but most other African countries also participate in the Paris Agreement and implement ESG environmental protection regulations to varying degrees. Considering Africa's vast continent, abundance of natural resources, and favorable natural conditions for renewable energy, its role and significance in responding to global climate change and protecting and managing the environment appear substantial. Although Africa's total carbon emissions are currently relatively low, rapid population growth and increasing infrastructure construction and resource development are spreading environmental pollution and ecosystem destruction. If national protection and management are neglected, this could lead to an increase in total carbon emissions. It is hoped that Africa's active efforts and participation will contribute to global climate change response and environmental protection.

Junggyu Shin, Foreign Attorney (SK E&S)

※This article is based on content supplied by Law Times.

This content was produced with the assistance of AI translation services.