The Supreme Court on Friday ruled that corporations are under a constitutional obligation to protect wildlife and the environment.
A bench of Justices Pamidighantam Sri Narasimha and Atul S. Chandurkar passed the judgment while rejecting the plea of multiple corporate establishments engaged in mining and the distribution and production of power seeking modifications to two apex court orders of 2021 and 2024 restricting their activities in ecologically sensitive zones of Rajasthan and Gujarat to preserve the great Indian bustard, which the court said was becoming extinct.
The apex court noted that Schedule VII of the Companies Act, 2013, enumerates permissible CSR (corporate social responsibility) activities, specifically listing “ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, and conservation of natural resources”.
“By categorising these ecological activities as ‘social’ responsibility, the law acknowledges that as human beings, we cannot ‘own’ or ‘use’ environment for ‘our purpose’. The corporate duty must evolve from merely protecting the shareholders to protecting the ecosystem that we all inhabit. 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 bench said.
The court noted that Article 51A(g) of the Constitution imposed 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”.
“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. CSR funds must, therefore, be directed towards ex-situ and in-situ conservation efforts to prevent extinction,” it said.
The non-renewable power generators operating in both priority and non-priority areas in Rajasthan and Gujarat must always remember that they share the environment with the great Indian bustard and must undertake their activities as if they are guests in its habitat, it added.