CSR and Environmental Responsibility in Indian Law

Supreme Court ruling on CSR scope

CSR and Environmental Responsibility in Indian Law: The Supreme Court of India clarified that Corporate Social Responsibility (CSR) is not limited to social welfare alone but inherently includes environmental responsibility.
This interpretation was laid down in the MK Ranjitsinh & Others v Union of India case, decided in December 2025.

The Court linked CSR obligations with constitutional duties, expanding the understanding of corporate accountability in environmental governance.
This ruling strengthens the legal foundation for corporate participation in biodiversity conservation.

Corporations as constitutional actors

The Court recognised corporations as legal persons and important organs of society.
As constitutional actors, corporations are bound by Fundamental Duties under Article 51A(g) of the Constitution.

Article 51A(g) mandates the duty to protect and improve the natural environment, including forests, lakes, rivers, and wildlife.
It also requires compassion for living creatures, extending ethical responsibility beyond human interests.

Static GK fact: Article 51A listing Fundamental Duties was added to the Constitution by the 42nd Constitutional Amendment Act, 1976.

CSR as a constitutional obligation

The Court rejected the idea that CSR is merely a form of corporate charity.
It ruled that CSR spending on environmental protection is a constitutional obligation, not a voluntary philanthropic activity.

Environmental sustainability, therefore, becomes a mandatory component of corporate governance.
This interpretation aligns CSR with long-term national interests rather than short-term image-building exercises.

Static GK Tip: Fundamental Duties are non-justiciable, but courts frequently use them to interpret statutory and constitutional responsibilities.

Polluter pays principle and species protection

A significant aspect of the ruling was the application of the polluter pays principle to biodiversity conservation.
Where corporate activities threaten or damage endangered species, companies must bear the cost of restoration.

The Court emphasised both in-situ conservation (protecting species in their natural habitats) and ex-situ conservation (such as breeding programmes and wildlife reserves).
CSR funds can be lawfully directed towards these conservation measures.

This approach integrates environmental liability with CSR compliance, strengthening accountability for ecological harm.

Legal framework of CSR in India

CSR is a statutory requirement under Section 135 of the Companies Act, 2013.
It applies to companies meeting specified thresholds of net worth, turnover, or net profit.

Eligible companies must spend at least 2% of their average net profits of the preceding three years on CSR activities.
Unspent amounts related to ongoing projects must be transferred to designated funds.

Static GK fact: India became the first country in the world to mandate CSR spending through legislation.

Environmental sustainability under CSR activities

The Companies Act explicitly includes environmental sustainability within permissible CSR activities.
This covers conservation of natural resources, maintaining ecological balance, and protection of flora and fauna.

By linking CSR with Article 51A(g), the Supreme Court reinforced the constitutional legitimacy of environmental CSR spending.
This ruling is expected to influence future corporate policies and environmental litigation.

Implications for corporate governance

The judgment marks a shift from voluntary environmental responsibility to constitution-backed corporate duty.
Boards of companies must now integrate environmental protection into CSR planning and compliance frameworks.

It also strengthens India’s broader environmental jurisprudence by aligning corporate law with constitutional values.

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CSR and Environmental Responsibility in Indian Law: