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What is Environmental, Social and Governance (ESG) Disclosure?



By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), Winner of Kenya’s ADR Practitioner of the Year 2021, ADR Publication of the Year 2021 and CIArb (Kenya) Lifetime Achievement Award 2021*

The term Environmental, Social and Governance (ESG) Disclosure or Reporting refers to the disclosure of data relating to an organization’s environmental, social and governance performance. ESG reporting is also called purpose-led reporting, sustainability reporting, or corporate social responsibility (CSR) reporting. In 2019, a Harvard Business Review Survey of 70 senior executives in the investors community found that ESG issues were almost universally top of mind among them.[1] It is this surge in interest by investors and other stakeholders in Environmental, Social and Governance (“ESG”) matters that has necessitated ESG reporting to meet the needs of the modern investor in the capital markets who is now more discerning and demanding more disclosure from companies.

At the same time, stakeholders are seeking more comprehensive information from companies beyond financial performance indicators including how the companies’ activities impact on environment, how they are governed and how they relate with society and address the societal issues of the day. The NSE CEO notes that the “COVID-19 pandemic, global environmental and social crises, the transition to renewables and the renewed focus on human rights has intensified the need and drive for ESG integration by corporates.”[2]

The rising prominence of ESG issues in the global economy has necessitated the increased uptake of ESG reporting by corporates to match the demands of their investors and stakeholders. The key objective of ESG reporting is to disclose to stakeholders how the respective organization manages or commits to manage ESG issues relevant to the organization.[3]  As such, ESG reporting helps to provide transparency to stakeholders on a company’s actions on governance, sustainability and social equity impact the world. ESG reporting also allows companies to take credit and gain reputation for building a safer, cleaner, more just world. ESG reporting helps companies achieve the goal of producing a public-facing document conveying the strategic objectives, highlights and targets of their ESG efforts. [4]

ESG Reporting has moved from the historical approach where it was mainly viewed as risk mitigation and compliance issue reporting on environmental issues such as pollution or corporate governance issues like board changes. As consumers become more discerning and demand more sustainable and ethically sourced or produced products, ESG reporting shifted to become a matter of market positioning and branding. However, in recent days more and more stakeholders are pushing for more robust ESG reporting addressing ESG topics that affect financial condition, business operations and brand position and value. In turn, ESG topics are now considered “material” to businesses and as such ESG disclosure is now a key avenue for generating enterprise value and maintaining a competitive edge.[5]

ESG Reporting now stands out as a supplement to corporate reporting as a means of providing stakeholders non-financial information that can help them assess the risks and opportunities of their business. The ESG information to be useful has to be complete, high quality and comparable to help in decision making and useful for stakeholders seeking to invest in, purchase from or have a business relationship with the company. The key stakeholders that benefit from ESG reporting include the Board of the Company, the Financiers, Business Partners and regulatory entities.[6]  ESG reporting is as important for larger corporations as it is for smaller companies who may need to maintain ESG disclosure best practices for the sake of their reputation, growth and future capital raising or as part of requirement to provide ESG data to meet their customers’ ESG objectives and criteria where ESG goals and management have been cascade down the supply chain.[7]

ESG reporting is also acknowledged as useful in that development of ESG reports can be useful in helping companies and management engage in reflection and analysis beneficial to the general performance of the company. According to the London Stock Exchange Group, “The process of reflecting on, analyzing and reporting ESG issues provides important insights into the positive and negative implications for financial and operational performance. This also applies to decisions about strategy and capital expenditure. Further, having a clear view on ESG issues and strategy positions businesses at the forefront of opportunities presented by the unfolding sustainable and green economy.”[8]

The Nairobi Securities Exchange (NSE) believes that ESG reporting provides a framework through which investors, owners of capital and the public at large can have a more comprehensive view of the company’s activities and performance, beyond its financial numbers. Hence, NSE issued the ESG Disclosures Guidelines to improve and standardize ESG reporting by listed companies in Kenya for uniformity of information. The NSE ESG Disclosure Guidelines provide a framework for ESG reporting that meets international standards for use by Kenya’s listed companies. It essentially provides guidance for the listed companies on how to integrate ESG considerations into their organizations to capture relevant opportunities for stakeholders and managing critical business risks.[9] It is a self-regulatory measure by NSE to ensure the companies in the bourse comply with established global standards on ESG reporting to be able to attract and retain international investors.

*This article is part of article series on ESG (Environmental, Social and Governance) in Kenya by Dr. Kariuki Muigua, PhD, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Publisher of the Year 2021 and ADR Lifetime Achievement Award 2021 (CIArb Kenya). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Africa Trustee of the Chartered Institute of Arbitrators and the Managing Partner of Kariuki Muigua & Co. Advocates. Dr. Muigua is recognized as one of the leading lawyers and dispute resolution experts by the Chambers Global Guide 2022.  


[1] Eccles, R.G. and Klimenko, S., “Investor Revolution: Shareholders are Getting Serious about Sustainability”, Harvard Business Review Magazine, May-June 2019, available at: (accessed on 04/06/2022).

[2] Odundo, G.O., “Forward to the ESG Disclosures Guidance Manual,” November 2021, p. 3; Available at: on 04/06/2022).

[3] Ibid.

[4] Inogen Alliance, “What Is ESG and Sustainability Reporting and Why Is It Important?”, Yahoo Finance, November 2021, Available at: (accessed on 04/06/2022).

[5] Ibid.

[6] Sorter, S., “The High States (and Critical Stakeholders) of ESG,” Workiva, May 2021; Available at: https://www. on 04/06/2022).

[7] Chabon, G.M, “Supply Chains & ESG: How to Use Your Supply Chain to Accomplish Your ESG Goals,” Womble, Bond and Dickinson, June 2021; Available at: on 04/06/2022).

[8] London Stock Exchange Group, “Revealing the Full Picture: Your Guide to ESG Reporting,” 2020, available at: on 04/06/2022).

[9] Odundo, G.O., Op. Cit.

News & Analysis

The Roles of the Three Parts of the Permanent Court of Arbitration




H.E. Amb. Marcin Czepelak, the Fourteenth Secretary-General of the Permanent Court of Arbitration (PCA)

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Brief History of the Permanent Court of Arbitration (PCA)




By Dr. Kariuki Muigua, PhD, C.Arb, Current Member of Permanent Court of Arbitration (PCA) Representing the Republic of Kenya.

The Permanent Court of Arbitration (PCA) is a 124 Years Old Intergovernmental Organization currently with 122 contracting states. It was established at the turn of 20th Century during the first Hague Peace Conference held between 18th May and 29th July 1899. The conference was an initiative of then Russian Czar Nicholas II to discuss peace and disarmament and specifically with the object of “seeking the most effective means of ensuring to all peoples the benefits of a real and lasting peace, and, above all, of limiting the progressive development of existing armaments.” The culmination of the conference was the adoption of a Convention on the Pacific Settlement of International Disputes, which dealt not only with arbitration but also with other methods of pacific settlement, such as good offices and mediation.

The aim of the conference was to “strengthen systems of international dispute resolution” especially international arbitration which in the last century had proven effective for the purpose with number of successful international arbitrations being concluded among Nations. The Alabama arbitration of 1871-1872 between the United Kingdom (UK) and the United States (US) under the Treaty of Washington of 1871 culminating in the arbitral tribunal’s award that the UK pay the US compensation for breach of neutrality during American Civil War which it did had demonstrated the effectiveness of arbitration in settling of international disputes and piqued interest of many practitioners in it as a mode of dispute resolution during the latter years of the nineteenth century.

The Institut de Droit International adopted a code of procedure for arbitration in 1875 to answer the need for a general law of arbitration governing for countries and parties wishing to have recourse to international arbitration. The growth of arbitration as a mode of international dispute resolution formed the background of the 1899 conference and informed its most enduring achievement, namely, the establishment of the PCA as the first global mechanism for the settlement of disputes between states. Article 16 of the 1899 Convention recognized that “in questions of a legal nature, and especially in the interpretation or application of International Conventions” arbitration is the “most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle.”

In turn, the 1899 Convention provided for the creation of permanent machinery to enable the setting up of arbitral tribunals as necessary and to facilitate their work under the auspices of the institution it named as the Permanent Court of Arbitration (PCA). In particular, Article 20 of the 1899 Convention stated that “[w]ith the object of facilitating an immediate recourse to arbitration for international differences which it has not been possible to settle by diplomacy, the signatory Powers undertake to organize a Permanent Court of Arbitration, accessible at all times and operating, unless otherwise stipulated by the parties, in accordance with the rules of procedure inserted in the present Convention.” In effect, the Convention set up a permanent system of international arbitration and institutionalized the law and practice of arbitration in a definite and acceptable way.

As a result, the Permanent Court of Arbitration (PCA) was established in 1900 and began operating in 1902. The PCA as established consisted of a panel of jurists designated by each country acceding to the Convention with each country being entitled to designate up to four from among whom the members of each arbitral tribunal might be chosen. In addition, the Convention created a permanent Bureau, located in The Hague, with functions similar to those of a court registry or secretariat. The 1899 Convention also laid down a set of rules of procedure to govern the conduct of arbitrations under the PCA framework.

The second Hague Peace Conference in 1907 saw a revision of the 1899 Convention and improvement of the rules governing arbitral proceedings. Today, the PCA has developed into a modern, multi-faceted arbitral institution perfectly situated to meet the evolving dispute resolution needs of the international community. The Permanent Court of Arbitration has also diversified its service offering alongside those contemplated by the Conventions. For instance, today the International Bureau of the Permanent Court of Arbitration serves as a registry in important international arbitrations. In 1993, the Permanent Court of Arbitration adopted new “Optional Rules for Arbitrating Disputes between Two Parties of Which Only One Is a State” and, in 2001, “Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment”.


PCA Website: (accessed on 25th May 2023).

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News & Analysis

Former KCB Company Secretary Sues Over Unlawful Dismissal




Former KCB Group Company Secretary Joseph Kamau Kania who has sued the Bank for Unlawful Dismissal

Former KCB Group Company Secretary Joseph Kamau Kania has sued the lender seeking reinstatement or be compensated for illegal sacking almost three years ago. Lawyer Kania was the KCB Group company secretary until restructuring of the lender in 2021 that saw some senior executives dropped.

Through the firm of Senior Counsel Wilfred Nderitu, Kamau wants the court to order KCB Group to unconditionally reinstate him to employment without altering any of the contractual terms until his retirement in December 2025.

In his court documents filed before Employment and Labour Relations Court, the career law banker seeks the court to declare the reorganization of the company structure a nullity and amounted to a violation of his fundamental right to fair labour practices as guaranteed in Article 41(1) of the Constitution. He further wants the court to declare that the position of Group Company Secretary did not at any time cease to exist within the KCB Group structure.

He further urged the Employment Court to declare that the recruitment and appointment of Bonnie Okumu, his former assistant, as the Group Company Secretary, in relation to the contemporaneous termination of his employment, was unprocedural, insufficient and inappropriate to infer a lawful termination of his employment.

“A declaration that the factual and legal circumstances of the Petitioner’s termination of employment were insufficient and inappropriate to infer a redundancy against him, and that any redundancy declared by the KCB Group in relation to him was therefore null, void and of no legal effect and amounted to a violation of his fundamental right to fair labour practices as guaranteed in Article 41(1) of the Constitution,” seeks lawyer Kamau.

Kamau says he was subjected to discriminatory practices by the KCB Bank Group in violation of his fundamental right to equality and freedom from discrimination as guaranteed in Article 27 of the Constitution and the termination of his employment was unfair, unjustified, illegal, null and void.

Lawyer Kamau further seeks the court to declare that the Non-Compete Clause in the 2016 Contract is unenforceable by the KCB Group as against him and is voidable by him as against the Bank ab initio, byreason of the termination of the Petitioner’s employment having been a violation of Articles 41(1) and 47(1) and (2) of the Constitution, and of the Employment Act.

He also wants the Employment Court to find that finding that KCB’s group legal representation by Messrs of Mohammed Muigai LLP Advocates law firm in respect of his claim for unlawful termination of employment resulted in a clear conflict of interest by reason of the fact that a Founding and Senior Partner at the said firm lawyer Mohammed Nyaoga is also the Chairman of the CBK’s Board of Directors.

“A Declaration that the circumstances of KCB’s legal representation by Messrs. Mohammed Muigai LLP Advocates resulted in a violation of the Petitioner’s fundamental right to have the employment dispute decided independently and impartially, as guaranteed in Article 50(1) of the Constitution,” seeks lawyer Kamau.

Kamau is seeking damages against both KCB Group and Central Bank of Kenya jointly and severally for the violation of his constitutional and fundamental right to fair labour practices.

He wants  further wants court to declare that CBK is liable to petitioner on account of its breach of statutory duty to effectively regulate KCB Group to ensure that KCB complied with the Central Bank of Kenya Prudential Guidelines and all other Laws, Rules, Codes and Standards, and that, as an issuer of securities, it complied with capital markets legislation.

Kamau through his lawyer Nderitu told the court that he was involved in Shareholder engagement in introducing the Group aide-mémoire that significantly improved the management of the Annual General Meetings, including obtaining approval without voting through the Memorandum and Articles of Association of Kenya Commercial Bank Limited among others.

He said that during his employment at KCB Bank Kenya and with the KCB Group, he initially worked well with former KCB CEO Joseph Oigara until 2016 when the CEO allegedly started sidelining him by removing the legal function from his reporting line.

He further claims he was transferred from the Group’s offices at Kencom House to its offices Upper Hill under the guise that the Petitioner was merely to support the KCB Group Board.

He adds that at that point his roles were given to Okumu for reasons that were not related to work demands.  He stated that Oigara at one time proposed that he should leave his role in the KCB Group and go and serve as the Company Secretary of the National Bank of Kenya Limited, a subsidiary of the Group, a suggestion which he disagreed with to Oigara’s utter annoyance.

Kamau stated that his work was thenceforth unfairly discredited, leading to his being taken through a disciplinary process whose intended outcome failed miserably, and the Petitioner was vindicated.

“More specifically, the Petitioner contends that the purported creation of a new organizational structure towards the end of 2020 was in fact Oigara’s orchestration targeted to remove certain individuals by requiring them to undergo interviews in the pretext that new roles were created, and amounted to a further violation of the Petitioner’s fundamental right to fair labour practices under Article 41(1) of the Constitution,” said in his court documents.

He further adds that this sham reorganization demonstrates how the role of the KCB Group Company Secretary purportedly ceased to be and was then very briefly replaced with a new role of the KCB Group General Counsel. The role of KCB Group Company Secretary then ‘resurfaced’ immediately thereafter, in total violation of legal and regulatory requirements.

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