The Judicial Push for Environmental CSR

Syllabus: GS3/Economy; Environment

Context

• By invoking Article 51A (g), the judiciary underscored that the right to conduct business is inseparably linked to the responsibility to restore the planet.

Corporate social responsibility (CSR)

• CSR is a business model that encourages companies to operate in ways that enhance society and the environment while still being accountable to their stakeholders and the public.
• CSR includes four categories: environmental impacts, ethical responsibility, philanthropic endeavors, and financial responsibilities.
• CSR in India: Section 135 of the Companies Act, 2013 provides that certain companies must mandatorily contribute a certain amount towards CSR activities.
  • The Board of Directors of every company for which the CSR provisions apply must ensure that the company spends in every financial year at least 2% of its average net profits made during the immediately preceding three financial years. 
• It plays a critical role in balancing profit-making with social accountability.
  • It ensures that businesses contribute positively to society while pursuing economic goals.

Gaps in CSR Funding in India

• Human-centric Bias in CSR: Corporate Social Responsibility spending is heavily skewed towards social sectors education (38%), healthcare (22%), and rural development (10%) while the environment receives only 7–9%.
• Perception of Environmental Issues: Corporations often treat environmental problems as long-term or distant threats, prioritising immediate social needs instead.
• Low Corporate Contribution to Restoration: Under the Bonn Challenge, private companies contributed only ~2% of India’s restored 9.8 million hectares indicating a major restoration gap.
• Preference for “Quick Wins”: Companies favour awareness campaigns, renewable energy projects.
  • These are visible, short-term, and easy to report, unlike long-term restoration.

Recommendations

• Shift to Ecosystem Recovery Approach: Judicial push calls for moving from compliance based CSR to a holistic ecosystem restoration strategy.
• Redefining Corporate Accountability: Replace conventional auditing with time-bound restoration targets and ecological impact assessments.
• Outcome-based Indicators: Success should be measured through tangible ecosystem services such as soil carbon sequestration, water retention, biodiversity recovery.
• Focus on Degraded Landscapes: Prioritise remote and degraded forest lands that lack adequate resources and attention.
• Institutional Collaboration: Build partnerships among forest departments, universities, NGOs, joint Forest Management Committees to create scientifically supervised restoration units.
• Innovative Financing Mechanisms: Establish restoration trusts or funds to ensure long-term funding continuity for large-scale projects.

Conclusion

• CSR in India reflects a short-term, visibility-driven approach, while environmental restoration which is critical for long-term sustainability remains underfunded, complex, and neglected.

Source: TH