The Supreme Court, in a landmark ruling, has asked corporate India to prioritize environmental preservation. It ruled that Corporate Social Responsibility (CSR) must explicitly encompassthe environment and ecology.
This decision integrates these imperatives into CSR mandates and issues comprehensive directives to safeguard the critically endangered Great Indian Bustard (GIB). The species faces existential threats from overhead power lines associated with non-renewable energy operations in Rajasthan and Gujarat.
The judgment from the bench of Justices P S Narasimha and Atul S Chandurkar underscores the judiciary’s push for businesses to align operations with biodiversity conservation. This will potentially reshape CSR spending, risk mitigation strategies, and compliance under frameworks like SEBI’s BRSR. Corporates in the energy sector, in particular, will need to reassess infrastructure projects against environmental impact assessments to avert legal and reputational risks.
Green funds
Elaborating on the role of the private sector in the issue of environment, the bench said the corporate definition of social responsibility must inherently include environmental responsibility. “Companies cannot assert to be socially responsible while ignoring equal claims of the environment and other beings of the ecosystem. The Constitution, under Article 51A(g), imposes a fundamental duty on every citizen to protect and improve the natural environment…. A corporation, as a legal person and a key organ of society, shares this fundamental duty. CSR funds are the tangible expression of this duty. Consequently, allocating funds for the protection of environment is not a voluntary act of charity but a fulfilment of a constitutional obligation,” Justice Narasimha, who penned the judgment for the bench, said.
SC said CSR provision codifies the principle that corporate profit is not solely the private property of shareholders, but is partly owed to society that enables its generation. The bench accepted the recommendation of a court-appointed committee for preservation of GIB despite opposition from power generators. It approved revised priority conservation areas of 14,013 sq km in Rajasthan and 740 sq km in Gujarat. It also approved panel recommendation on blanket ban on the installation of solar projects over 2MW capacity or the laying of overhead transmission lines. The court said survival of GIB is a shared cultural responsibility, as the bird represents not just a species but the unique natural heritage and resilience of the arid landscapes.
