Corporate Social Responsibility Must Include Environmental Responsibility, Says Supreme Court In Great Indian Bustard Case

In a significant pronouncement expanding the scope of corporate accountability, the Supreme Court has held that Corporate Social Responsibility cannot be divorced from Corporate Environmental Responsibility, observing that companies cannot claim to be socially responsible while disregarding the protection of wildlife and fragile ecosystems affected by their operations.Delivering a detailed judgment in the long-running litigation concerning the conservation of the critically endangered Great Indian Bustard, the Court underlined that corporations, as legal persons and key organs of society, share the constitutional duty under Article 51A(g) to protect and improve the natural environment and to show compassion for living creatures.A Bench of Justice PS Narasimha and Justice Atul S. Chandurkar held that the statutory CSR framework under the Companies Act, 2013 reflects a shift from voluntary charity to enforceable obligation and that environmental protection lies at the heart of this mandate. The Court stressed that CSR funds are not acts of philanthropy but instruments to discharge constitutional and fiduciary duties, particularly where corporate activities threaten endangered species and their habitats.CSR includes duty to protect endangered speciesThe Court traced the evolution of CSR law in India, noting that Section 135 of the Companies Act institutionalised the idea that corporate profits are not solely private entitlements but are partly owed to society. Referring to Section 166(2), the Court emphasised that directors are legally bound to act in good faith not only in the interests of shareholders but also of the community and the environment.The Bench observed that Schedule VII of the Companies Act explicitly treats environmental sustainability, ecological balance, and protection of flora and fauna as components of social responsibility, thereby blurring the artificial divide between social welfare and environmental protection.In strong terms, the Court held that where corporate activity contributes to habitat degradation or poses a risk to endangered species, the obligation to fund conservation flows from the Polluter Pays principle and the Species Best Interest standard recognised in earlier judgments."Therefore, the corporate definition of "Social Responsibility" must inherently include "Environmental Responsibility." Companies cannot assert to be socially responsible while ignoring equal claims of the environment and other beings of the ecosystem. The Constitution of India, under Article 51A(g), 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." A corporation, as a legal person and a key organ of society, shares this fundamental duty. CSR funds are the tangible expression of this duty. Consequently, allocating funds for the protection of environment is not a voluntary act of charity but a fulfilment of a constitutional obligation. The obligation to protect endangered species is paramount. CSR funds must, therefore, be directed towards ex-situ and in-situ conservation efforts to prevent extinction. 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, the Great Indian Bustard and must undertake their activities as if they are guests in its abode."Background of the litigationThe case arose from a writ petition filed in 2019 by environmentalist M.K. Ranjitsinh seeking urgent measures to prevent the extinction of the Great Indian Bustard and the Lesser Florican, whose populations have declined sharply due to habitat loss and collisions with overhead power lines.In April 2021, the Supreme Court had imposed a sweeping restriction on overhead transmission lines across nearly 99,000 sq km in Rajasthan and Gujarat. That order was later modified in March 2024 after the Union Government flagged serious implications for India's renewable energy transition. The Court then constituted a high-level Expert Committee to recommend scientifically grounded and balanced measures.Revised priority areas approvedAccepting the Committee's recommendations, the Court approved revised priority conservation areas of 14,013 sq km in Rajasthan and 740 sq km in Gujarat, rationalising earlier demarcations to focus protection on the last remaining strongholds of the species.The Court declined the petitioners' request to further expand the Rajasthan priority area by adding 657 sq km in the Rasla–Degrai Oran region, holding that the Expert Committee had taken a holistic view based on field studies and stakeholder consultations.Restrictions on renewable energy and power infrastructureThe Court approved strict restrictions within the revised priority areas, directing that no new wind turbines and no new solar parks or solar plants exceeding 2 MW capacity shall be permitted....

Corporate Social Responsibility Must Include Environmental Responsibility, Says Supreme Court In Great Indian Bustard Case

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The Court recalibrated earlier restrictions on power generators in the regions where the Great Indian Bustard birds fly.

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