Supreme Court Judgment on Corporate Environmental Responsibility and CSR

The Supreme Court's judgment on December 19 has redefined the role of corporate environmental responsibility within the framework of Corporate Social Responsibility (CSR) in Indian company law, specifically in the context of protecting the great Indian bustards from power infrastructure.

Key Aspects of the Judgment

• The judgment positions CSR as an enforceable obligation, not just a discretionary undertaking for companies.
• Environmental and wildlife protection is included in the CSR obligations under the Companies Act.
• Spending on environmental measures is framed as fulfilling constitutional duties under Article 51A(g), rather than being considered charity.

Implications for Conservation

• Strengthens the legal basis for conservationists to demand corporate financing for projects aimed at species recovery endangered by corporate activities.
• The 2021 interim order restricted overhead transmission lines and mandated a committee-led approach for feasibility and undergrounding.
• In 2024, an expert committee was constituted to balance species protection with climate commitments, operationalized by the new order.

Operational Challenges and Considerations

• The Court's order does not specify details such as which companies must pay, the amount, timing, and audit procedures, leaving penalties for non-compliance according to existing provisions.
• Shift from a large-area approach to revised priority areas to reduce conflict with renewable energy deployments.
• The success of the judgment depends on accurate habitat mapping and whether governments and utilities can implement undergrounding and rerouting effectively.

This judgment enhances the legal framework for corporate funding in environmental conservation, although its effectiveness will depend on implementation and outcomes at the ground level.