Judicial Push for Environmental CSR

Why in News?

The Supreme Court has now linked the right to conduct business with the duty to restore ecosystems, making environmental responsibility a constitutional obligation rather than voluntary charity.

What is Corporate Social Responsibility (CSR)?

• CSR – It refers to the responsibility of enterprises to integrate social and environmental concerns in their business operations and interactions with their stakeholders and the public.
• It involves practices and policies intended to have a positive influence beyond legal obligations and profit maximization.
• 4 key dimensions –
  • Economic responsibilities,
  • Legal responsibilities,
  • Ethical responsibilities, and
  • Discretionary (philanthropic) responsibilities.
• Legal mandate – Under the Companies Act, 2013, requires eligible firms to spend at least 2% of their average net profit from the previous three years on CSR.
• Applicability – It applies to companies with a net worth of Rs.500+ crore, turnover of Rs.1,000+ crore, or net profit of Rs.5+ crore.
• Proposed 2026 Changes – The Corporate Laws (Amendment) Bill, 2026, aims to increase the net profit threshold from Rs.5 crore to Rs.10 crore.
• Top beneficiaries – Maharashtra, Rajasthan, and Tamil Nadu (based on 2024-25).

What about the recent SC’s ruling?

• M.K. Ranjitsinh & Others v. Union of India, 2025 – The Supreme Court of India declared that Corporate Social Responsibility (CSR) inherently includes environmental responsibility, making it a constitutional obligation rather than mere discretionary charity.
• Corporations are considered as “legal persons” and key organs of society, sharing responsibility for ecological protection.
• Bound by Article 51A(g) – By invoking Article 51A (g), the judiciary underscored that the right to conduct business is inseparably linked to the responsibility to restore our planet.
• SC’s view on Great Indian Bustard Conservation – The judgment, centered on the near‑extinct Great Indian Bustard, requires companies to fund both in‑situ (habitat protection) and ex‑situ (breeding and recovery outside natural habitats) conservation under the polluter pays principle.
  • Polluter Pays Principle – Companies whose activities (mining, power generation, infrastructure) threaten habitats must bear the cost of species recovery.

India emerged as a pioneer for mandating profit-sharing for social good, a visionary move to channel corporate earnings for crucial societal objectives.

How are CSR funds currently allocated & what are the key environmental initiatives?

• CSR Funding Trends (past 7 years) – Funds have been overwhelmingly allocated to human-centric development (social sectors) –
  • Education (38%),
  • Healthcare (22%), and
  • Rural development (10%), whereas to
  • Environment between 7%-9%.
• This imbalance shows that ecological needs are consistently underfunded compared to immediate social priorities.
• Reason for less attention to environment – Corporations view environmental crises as distant threats compared to immediate social needs.
• As a result, sustainability projects receive minimal investment despite their long‑term importance.
• Notable Environmental CSR Initiatives
  • Mahindra’s Project Hariyali – Planted almost 25 million trees, focusing on survival rates rather than just sapling counts.
  • ITC Forestry Program – 1.3 million acres restored, integrating livelihoods with conservation.
  • Tata Group – Leads large‑scale watershed management for water security.
  • Coca‑Cola & Hindustan Unilever – Undertaken circular waste management initiatives.
  • JSW – Mangrove restoration projects.
• These initiatives demonstrate that prioritising the environment yields significant, and measurable impact.

What are the challenges for restoration?

• Neglect of Environmental Restoration – Much needed environmental restoration, including afforestation, has been neglected in India as is evidenced in the country’s report on the Bonn Challenge.
  • Bonn Challenge – A global, voluntary effort to restore 350 million hectares of degraded and deforested land by 2030.
• India’s Target & Status – While the nation aims to restore 26 million hectares by 2030, private companies have contributed a negligible 2% to the 9.8 million hectares restored so far, reveals a gap under the Bonn Challenge.
• Massive Restoration Gap – Between the damage caused by industrial activity which causes large‑scale ecological damage and the investment made to fix it, creating a serious imbalance.
• Common Corporate Approach – Most companies still pursue ‘quick wins’ such as one-off awareness drives, and sidestep the difficult processes of forest restoration and natural resource recovery.
• Preference for Quick Visibility Projects – Companies prefer social projects such as environmental awareness campaigns, renewable energy, or basic green initiatives.
• These give quick visibility, clear results, and facilitate easy reporting.
• Challenges in Land-Based Projects – Forest restoration with tree planting, habitat recovery, water conservation, and waste management take a long time.
• In addition, they also require expert skills in tree-growing, soil health, and biodiversity checks — skills that most CSR partners don’t have.
• Drawbacks of Popular Approaches – Corporations often support initiatives such as the recently popular
  • Miyawaki plantations - Offers rapid growth and visually appealing, but often harm native ecology and biodiversity.
  • Urban bias - CSR projects tend to focus on cities, neglecting degraded rural lands.
  • Weak collaboration - Limited coordination with forest departments, NGOs, and scientific institutions and a lack of practical policies for degraded lands.

What are the reimagining strategy need to be done?

• Need for Ecosystem Recovery Strategy – The current judicial push demands an urgent transition to a ‘ecosystem recovery’ strategy.
• This requires reimagining corporate accountability, and replacing conventional auditing with time-bound restoration initiatives backed by ecological assessments.
• Indicators of success – Progress should be tangible ecological services such as soil carbon sequestration, water retention, and biodiversity recovery.
• Focus on Degraded Lands – India must prioritise degraded and remote forest lands lacking resources through appropriate restoration initiatives.
• Building Alliances – The country needs to build alliances between forest departments, universities, conservation NGOs and joint forest management committees.
• Establish dedicated restoration – These collaborations can establish dedicated restoration units under scientific supervision, with emphasis on native species and ecological integrity.
• Ensuring Long-Term Financing – Landscape-scale projects and restoration challenges can be solved by establishing a restoration trust or an escrow fund.
• This would guarantee continuity and provide the long-term security necessary for real ecological impact.

What lies ahead?

• Corporate governance in India must evolve from being shareholder-centric to ecosystem-centric, with directors acting as fiduciaries for the environment and moving past the ease of basic compliance.
• When the health of our planet is treated as a mandatory, non-negotiable part of business strategy, the country moves toward a future where sustainable development becomes a lived reality.

References

1. The Hindu | Judicial push for environmental CSR
2. The Hindu | SC’s ruling about the CSR