Corporate Governance and ESG Compliance: A Legal Framework

Abstract

The integration of Environmental, Social, and Governance (ESG) principles into corporate governance frameworks has emerged as a critical legal and business imperative in the 21st century. This paper examines the evolving legal framework governing ESG compliance within corporate governance structures, analyzing the intersection of regulatory requirements, fiduciary duties, and stakeholder capitalism. Through a comprehensive review of recent legislative developments, judicial precedents, and regulatory guidance across major jurisdictions, this study identifies key legal mechanisms driving ESG integration and compliance. The research reveals a paradigm shift from voluntary ESG adoption toward mandatory disclosure and accountability frameworks, with significant implications for corporate directors, executives, and legal practitioners. Findings indicate that while legal frameworks are rapidly evolving, substantial gaps remain in enforcement mechanisms and standardization across jurisdictions. The paper concludes that effective ESG compliance requires a holistic approach integrating legal requirements, risk management, and stakeholder engagement within corporate governance structures.