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Informist, Friday, Dec. 19, 2025

 

NEW DELHI – The Supreme Court Friday said corporate social responsibility must include environmental responsibility and companies cannot claim to be socially responsible while ignoring the claims of the environment and other beings in the ecosystem. Article 51A(G) of the Constitution imposes a fundamental duty on every citizen "to protect and improve the natural environment, including forests, lakes, rivers, and wildlife, and to have compassion for living creatures", the court said.

 

A corporation, as a legal person and a key organ of society, shares the fundamental duty to protect the environment, the court said, adding that corporate social responsibility funds are a tangible expression of this duty. Consequently, allocating funds for the protection of the environment is not a voluntary act of charity but a fulfilment of a constitutional obligation, said a bench of Justice P.S. Narasimha and Justice Atul S. Chandurkar.

 

Where corporate activities such as mining, power generation, or infrastructure threaten the habitat of endangered species, the "polluter pays" principle mandates that the company bears the cost of species recovery, the court said. Corporate social responsibility funds must, therefore, be directed towards ex-situ, or offsite, and in-situ, or onsite, conservation efforts to prevent extinction, it said.

 

The court said the legal framework for corporate social responsibility in India was intended to mark a paradigm shift from voluntary philanthropy to statutory obligation. Under Section 135 of The Companies Act, 2013, Parliament institutionalised this duty by mandating that companies must meet specific financial thresholds espousing social responsibility, it said. This provision effectively codifies the principle that corporate profit is not solely the private property of shareholders but is partly owed to the society that enables its generation, the court said. The magic of legitimacy is in the perspective that private property is a trust, it added.

 

The Supreme Court said the non-renewable power generators operating in the priority as well as non-priority areas in Rajasthan and Gujarat must always remember that they share the environment with the "godawan", or the Great Indian Bustard, and must undertake their activities as if they are guests in its abode. The court approved revised priority conservation areas of 14,013 square kilometres in Rajasthan and 740 sq km in Gujarat and rationalised earlier demarcations to focus protection on the last remaining strongholds of the bird.

 

The top court said no new wind turbines and no new solar parks or solar plants exceeding 2 megawatt capacity shall be permitted in the revised priority areas. Further, no new overhead power lines, except those of 11 kilowatt and below, shall be allowed in these areas, except through dedicated power corridors. It was hearing a case regarding the protection of the Great Indian Bustard, a once widespread low-flying species that is now on the verge of extinction.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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