The future of ESG in an uncertain regulatory landscape
- 21 February 2025
- Posted by: Greg Coleman
- Category: energy transition
Transparency and good governance remain critical concerns in the regions where Future Energy Partners (FEP) operates. Countries such as Namibia, Ghana and parts of East Africa occupy mid to lower rankings in Transparency International’s Corruption Perceptions Index reflecting persistent governance challenges. In Oman and the Caribbean, rankings are generally stronger, but vulnerabilities remain. These realities shape the way businesses must approach Environmental, Social and Governance (ESG) standards, especially as the regulatory environment shifts in the U.S. and beyond.
FCPA enforcement – origins and purpose
The Foreign Corrupt Practices Act (FCPA) was introduced in 1977 under President Jimmy Carter to combat bribery by U.S. companies abroad. The act prohibits offering bribes to foreign officials and mandates accurate financial record-keeping. Enforced by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC), the FCPA has historically held companies to account, particularly in high-risk sectors like energy and extractives.
Notable examples include:
- Halliburton (2009): $579 million settlement over bribery in Nigeria.
- TotalEnergies (2013): $398 million fine for corrupt payments in Iran.
- Petrobras (2018): $1.78 billion settlement following a bribery scandal in Brazil.
Implications of an FCPA enforcement pause
- Increased corruption risk in energy markets: suspending FCPA enforcement could normalise bribery in project negotiations, creating an uneven playing field. Ethical companies could lose contracts to less scrupulous competitors, amplifying corruption risks in resource-rich regions where we operate.
- Reputational and legal uncertainty: even with enforcement on hold, future legal risks persist if the policy is reversed. Companies seen as complicit in corruption could face reputational damage and strained relationships with international clients and investors.
- Geopolitical and market dynamics: a weakened anti-corruption stance could embolden authoritarian regimes and state-owned enterprises, reducing market transparency. China’s Belt and Road Initiative may further capitalise on this shift, controlling strategic energy assets in regions where Western firms falter.
- Private sector hesitation on large-scale energy investments: energy majors and renewables developers may delay projects in high-risk jurisdictions due to regulatory uncertainty. Investors could perceive developing markets as increasingly unstable, slowing capital flows critical to sustainable energy transitions.
- Reduced ESG alignment: weakening anti-corruption measures undermines ESG progress. Transparency is essential for sustainable energy projects that rely on robust government partnerships. Without it, social and environmental objectives risk being compromised.
ESG under scrutiny – what’s next?
Following the rapid rollback of Diversity, Equity and Inclusion (DEI) initiatives by major corporates, questions arise over the future of ESG. Will companies similarly retreat from ESG commitments under pressure?
We believe the answer must be no. ESG, when properly focused, delivers a better bottom line with less risk:
- Health and Safety (H&S) measures reduce workforce injuries and costs
- waste management controls prevent regulatory fines and environmental damage
- flare reduction and emission control initiatives not only cut pollution but improve operational efficiency and air quality
- replacing coal with natural gas is cost-effective, reducing emissions by 60%, improving worker health, and lowering healthcare costs.
Regional relevance – ESG matters more than ever
In Namibia, Ghana and East Africa, developing skills remains a priority. These countries still seek growth while facing governance gaps and environmental pressures. ESG frameworks offer tools to manage these risks, support development and attract responsible investors.
Our work at FEP underscores this. We deliver ESG and HSE training and conduct energy audits to help clients operate safely, efficiently and sustainably. In regions with weak enforcement, such practices become even more vital to safeguard business continuity and community wellbeing.
Can Europe hold the ESG line?
As the U.S. deregulates, Europe’s commitment to ESG appears robust. The EU’s Corporate Sustainability Reporting Directive (CSRD) and other initiatives suggest that European businesses will maintain higher standards. . Economic pressures and political shifts could erode consensus. The EU is under pressure to simplify, delay and simplify the various regulations that have been developed. ie the Corporate Sustainability Reporting Directive( CSRD) and other regulations under the EU ‘Green Deal’ banner.
Resilient training solutions
The pause in FCPA enforcement and retreat from DEI raises concerns about corporate commitment to ESG. However, in the regions where we work, Namibia, Ghana, East Africa, Oman and the Caribbean, ESG is more critical than ever. It mitigates corruption risk, improves safety and environmental performance and ultimately strengthens business resilience.
Properly applied, ESG drives profitability and reduces operational risk. The message is clear: good governance and sustainable practices are not optional—they are the foundation of long-term success.
FEP’s training offer remains robust. Our ESG and HSE programmes are evolving to balance global best practices with local realities. We emphasise pragmatic solutions, helping clients reduce emissions, cut costs, and enhance worker safety regardless of regulatory uncertainty.
Supporting your energy transition every step of the way
The transition from conventional hydrocarbons to cleaner energy is a transformative journey that requires careful planning, innovative solutions and strategic support. At Future Energy Partners, we recognise that this transition takes time, and we are here to assist at every stage – from enhancing the efficiency of existing operations to achieving full energy transformation.
Future Energy Partners is dedicated to helping clients navigate the complexities of this transition while maximising opportunities.