With fast-paced development being the order of the day, balancing it with environmental protection and sustainability has become a challenge more than ever. Habitat loss, fragmentation and overexploitation of resources being the consequences of the process, it has become necessary to step in and act. Along these lines, the judgement passed by the Supreme Court Bench comprising of Justice P.S. Narasimha and Justice A.S. Chandurkar on December 19, 2025 placed corporate environmental responsibility inside the legal meaning of Corporate Social Responsibility (CSR).
WHAT IS CORPORATE SOCIAL RESPONSIBILITY (CSR)?
Corporate Social Responsibility is a modern business idea that insists on conducting the business in a way that is ethical, sustainable and beneficial to the community. Companies foster a philanthropic approach through CSR. The intent behind CSR expenses is to ensure that companies deriving their revenue from the communities in which they operate, return the same to the community for its betterment and welfare. CSR promotes inclusive and sustainable development. It recognises the role of companies in the society and ensures that they fulfil their responsibilities towards the environment and society, thereby playing an active role in contributing to development.
Section 135 of the Companies Act, 2013 provides for Corporate Social Responsibility by constitution of a CSR Committee of the Board by companies having a net worth of Rs. 500 crore or more, turnover of Rs. 1000 crore or more, or a net profit of Rs. 5 crore or more during the immediately preceding financial year. Such Committee shall formulate CSR Policy, recommend the amount of expenditure and monitor the policy from time to time. It also states that the Board of every such company shall ensure that the company spends, in every financial year, at least 2% of the average net profits made during the three immediately preceding financial years in pursuance of its CSR.
As per Schedule VII of the Act, companies shall carry out CSR under any of the following areas:
Eradication of hunger, poverty and malnutrition;
promotion of education and employment related skills;
promotion of gender equality, women empowerment and care facilities for senior citizens;
ensuring environmental sustainability, ecological balance and protection;
protection of national heritage, art and culture;
measures for the benefit of armed forces veterans, war widows and their dependants;
contribution to Prime Minister’s National Relief Fund or such other funds;
contribution to incubators or research and development projects in science, technology, engineering and medicine and contributions to public funded university;
rural development projects;
slum area development;
disaster management, relief, rehabilitation and reconstruction.
In M.K. Ranjitsinh v. Union of India (2025), the Supreme Court significantly expanded the scope of Corporate Social Responsibility by recognising environmental protection as an integral component of social responsibility.
The petitioner approached the Supreme Court under Article 32 in 2019 to seek protection for the Great Indian Bustard (GIB). The GIB, Rajasthan’s state bird, is India’s most critically endangered bird. It is one of the heaviest flying birds in the world, mainly found in Rajasthan’s Thar Desert, with small populations in Gujarat, Maharashtra, Karnataka and Andhra Pradesh. GIB acts as an indicator species, reflecting the health of grassland ecosystems. Their decline signals degradation of native grasslands. Expansion of power infrastructure in the states of Rajasthan and Gujarat led to an increase in the death of GIB and hence, protection of these endangered species was sought. The court, subsequently connected proceedings seeking the deployment of bird flight diverters along the GIB’s migration path.
By an interim order in 2021, the Court restricted the installation of overhead transmission lines on the migration path, across 99,000 sq.km. and established a committee to consider the feasibility of high-voltage underground power lines. Responding to an Interlocutory Application from the Ministry of Environment, Forests and Climate Change, the Ministry of Power and the Ministry of New and Renewable Energy, the Court stated that there was no basis to impose a total prohibition on the installation of transmission lines. The Court appointed an expert committee in 2024 for recommendations to strike a balance between conservation and development. This committee submitted reports for Rajasthan and Gujarat, identifying priority and non-priority areas where the states would implement in-situ and ex-situ conservation measures.
JUDGEMENT: KEY TAKEAWAYS
The Court held that entities engaged in power generation and transmission in both priority and non-priority areas in Rajasthan and Gujarat must remember that they share the environment with the GIB and must undertake their activities as if they are guests in its abode. Accepting the committee’s report, the Court issued directions to Gujarat and Rajasthan for their implementation. It reiterated the “species best interest” standard, placing the survival of the species as the top priority. Further, the Court held that the “polluter pays” principle mandates that those responsible should bear the cost of the species’ recovery.
The Court explained that the legal formation of Corporate Social Responsibility (CSR) in India intends to mark a paradigm shift from voluntary philanthropy to statutory obligation. With the introduction of Companies Act, 2013, the focus has shifted from protection of shareholder’s interests to protection of stakeholder’s interests including the environment and community. The definition of ‘Community’ under CSR framework has been expanded to include ‘Natural world.’ Therefore, the corporate definition of “Social Responsibility” must inherently include “Environmental Responsibility.” Companies cannot assert to be socially responsible while ignoring environment and other beings of the ecosystem.
The Court further added that 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, shares this fundamental duty. CSR funds are the tangible expression of this duty. Consequently, allocating funds for the protection of environment is not considered a voluntary act of charity but a fulfilment of a constitutional obligation. As mandated by the polluter pays principle, companies responsible must pay for the costs of species recovery. The CSR funds shall, therefore, be directed towards ex-situ and in-situ conservation to prevent extinction.
CONCLUSION
The Supreme Court by repeatedly emphasising on the practice of CSR as a mandatorily enforceable statutory obligation has interpreted social responsibility to include environmental responsibility and wildlife protection. The judgement, thus, improves the legal position for making companies accountable to protect environment, prevent loss of endangered species and pay for recovery of their habitats. The Court emphasises on the need for balancing development and conservation. While the judgement has provided detailed guidelines and recommendations clarifying obligations of corporates, what remains to be seen is the implementation of these measures and whether corporate funding in such cases translate to outcomes on the ground.
