Utilizing Alternative Dispute Resolution Mechanisms to Resolve Environmental, Social and Governance Disputes in Kenya: Challenges and Prospects

Abstract

As more and more corporate outfits grapple with the need to demonstrate greater value to the society in addition to profit making, environmental, social and governance (ESG) components are progressively becoming crucial for good corporate practice. In Kenya, efforts at promotion of corporate sustainability nationally are embodied in our elaborate ESG legislative, policy and institutional framework. the increased importance of ESG across sectors as well as the general incremental awareness of stakeholder groups of their entitlements when it comes to responsible business practices, has also meant the increased prevalence of ESG related disputes and claims such as human rights violations, and environmental mismanagement in the course of business operations. While courtroom litigation has traditionally been the preferred forum, a shift can be seen in how ESG related claims are being resolved through alternative dispute resolution (ADR). This research proceeds on the assumptions: that ADR is an effective tool for resolution of ESG claims and proposes that ADR is best placed to resolve ESG related claims due to its adaptability, flexibility and cost and time effectiveness. The research will primarily rely on secondary data relevant to the subject of investigation and is based on an analysis of recent scholarly literature on ESG and ADR. It will look into areas where ADR has been successfully applied to resolve ESG disputes and also draw important lessons for Kenya. In so doing, this research aims at outlining the crucial gaps that have yet to be addressed with regards to the part played by ADR in resolving disputes arising out of ESG obligations and further outlines a potential agenda for an ESG specific ADR policy framework in Kenya.