Corporate Social Responsibility Must Include Environmental Responsibility: Supreme Court’s Landmark Judgment in Great Indian Bustard Case

Introduction

The Supreme Court of India delivered a transformative judgment on December 19, 2025, establishing that corporate social responsibility cannot be separated from environmental responsibility. This ruling came in the case concerning the protection of the critically endangered Great Indian Bustard, wherein Justices P.S. Narasimha and Atul S. Chandurkar held that companies claiming to be socially responsible cannot disregard their obligations toward wildlife and fragile ecosystems affected by their operations. The judgment represents a fundamental shift in how corporate governance intersects with environmental protection under Indian law.

The case arose from a public interest litigation filed in 2019 by environmentalist M.K. Ranjitsinh, seeking urgent conservation measures for the Great Indian Bustard, whose population has declined alarmingly due to infrastructure associated with renewable and non-renewable energy projects, particularly overhead transmission lines in Rajasthan and Gujarat [1]. The Court’s observations have far-reaching implications for corporate India, mandating that environmental spending under Corporate Social Responsibility frameworks is not voluntary charity but a constitutional obligation.

Background of the Great Indian Bustard Case

The Great Indian Bustard, locally known as Godawan, is a critically endangered bird species that once thrived across the Indian subcontinent but now survives primarily in small pockets of Rajasthan and Gujarat. The bird stands approximately one meter tall with a wingspan of around seven feet, making it one of the heaviest flying birds in the world. According to the International Union for Conservation of Nature, the species is classified as critically endangered, with its population reduced to fewer than 150 individuals [2].

The primary threat to the Great Indian Bustard’s survival has been identified as overhead power transmission lines. The Wildlife Institute of India’s 2018 Power Line Mitigation Report documented that approximately 100,000 birds die annually due to collision with power lines across India. The Great Indian Bustard lacks frontal vision, which prevents these heavy birds from detecting powerlines ahead of them, making collision mortality particularly severe. The expansion of solar and wind energy infrastructure in their habitat regions has intensified these threats considerably [3].

In April 2021, the Supreme Court issued an interim order imposing restrictions on the installation of overhead transmission lines across approximately 99,000 square kilometers of the bird’s habitat. The Court directed that future low-voltage power lines in priority areas be laid underground and mandated the installation of bird diverters on existing lines. However, this order was subsequently challenged by various stakeholders, including the Union of India and renewable energy companies, who argued that implementing these measures would adversely impact India’s renewable energy transition and international climate commitments under the Paris Agreement.

The December 2025 Judgment and Its Key Observations

Revised Conservation Zones

Accepting recommendations from a court-appointed expert committee, the Supreme Court approved revised priority conservation areas measuring 14,013 square kilometers in Rajasthan and 740 square kilometers in Gujarat. The Court cleared recommendations imposing a blanket prohibition on the installation of solar projects above 2 megawatt capacity and laying overhead transmission lines within these designated conservation zones. The judgment directed the undergrounding of 80 kilometers of critical 33 kilovolt power lines in Rajasthan and 79 kilometers of similar lines in Gujarat, along with the rerouting of several 66 kilovolt lines [4].

Corporate Social Responsibility as Constitutional Duty

The supreme Court categorically held that the corporate definition of social responsibility must inherently include environmental responsibility. Justice P.S. Narasimha observed that companies cannot assert to be socially responsible while ignoring the environment and other beings of the ecosystem. The Constitution, under Article 51A(g), imposes a fundamental duty on every citizen to protect and improve the natural environment, including forests, lakes, rivers, and wildlife. The judgment emphasized that a corporation, as a legal person and a key organ of society, shares this fundamental duty equally with individual citizens [5].

The Court further explained that Corporate Social Responsibility funds are the tangible expression of this constitutional duty. Consequently, allocating funds for the protection of the environment is not a voluntary act of charity but fulfillment of a constitutional obligation. This pronouncement fundamentally alters the traditional understanding of CSR as discretionary corporate philanthropy, recasting it as a binding legal and constitutional mandate.

Legal Framework Governing Corporate Social Responsibility

Section 135 of the Companies Act, 2013

The statutory foundation for Corporate Social Responsibility in India is laid down in Section 135 of the Companies Act, 2013. This provision mandates that every company having a net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more, or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, including at least one independent director [6].

The Board of every such company must ensure that the company spends, in every financial year, at least two percent of the average net profits of the company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. The CSR Committee is responsible for formulating and recommending to the Board a Corporate Social Responsibility Policy indicating activities to be undertaken by the company as specified in Schedule VII of the Act, recommending the amount of expenditure to be incurred on such activities, and monitoring the implementation of the CSR Policy from time to time.

Schedule VII of the Companies Act specifically includes environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources, and maintaining quality of soil, air, and water as eligible CSR activities. The Supreme Court’s recent judgment has now elevated these activities from being optional choices within a broader CSR framework to mandatory components that every socially responsible corporation must address.

Section 166 of the Companies Act, 2013

Section 166 of the Companies Act, 2013, outlines the duties of directors and provides another crucial legal foundation for environmental responsibility. Section 166(2) specifically states that a director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community, and for the protection of environment [7].

This provision marked a significant departure from the traditional shareholder-centric model of corporate governance. The Supreme Court, in its December 2025 judgment, emphasized that Section 166(2) has dismantled the narrow shareholder-centric approach to corporate management. Directors are now legally bound to act in good faith not only for members and shareholders but also for employees, the community, and specifically for the protection of the environment. The inclusion of environmental protection as a distinct stakeholder interest represents a progressive legislative approach that recognizes the interdependence between business operations and ecological sustainability.

Constitutional Foundations of Environmental Responsibility

Article 51A(g) of the Constitution

Article 51A of the Constitution, inserted through the Forty-second Amendment Act of 1976, enumerates the Fundamental Duties of citizens. Article 51A(g) specifically imposes a duty on every citizen of India to protect and improve the natural environment including forests, lakes, rivers, and wildlife, and to have compassion for living creatures. While these duties are not directly enforceable through courts, they provide valuable interpretative guidance for understanding other constitutional and statutory provisions [8].

The Supreme Court’s recent judgment draws heavily on Article 51A(g) to establish that corporations, being legal persons and integral components of civil society, share the fundamental environmental duties imposed on all citizens. The Court rejected the notion that corporations occupy a privileged position exempt from constitutional duties that bind natural persons. This interpretative approach represents a significant expansion of corporate accountability under constitutional law.

Article 48A and Environmental Protection

Article 48A of the Constitution, also inserted by the Forty-second Amendment Act of 1976, contains a Directive Principle of State Policy requiring the State to endeavor to protect and improve the environment and to safeguard the forests and wildlife of the country. While Directive Principles are not directly enforceable, they have been interpreted by courts as fundamental to governance and must be read in conjunction with Fundamental Rights, particularly the Right to Life under Article 21.

The Supreme Court has consistently held that the right to a clean and healthy environment forms an integral part of the right to life guaranteed under Article 21. In the recent Great Indian Bustard judgment, the Court reaffirmed that environmental protection is not merely aspirational but represents a justiciable right that can be enforced against both state and non-state actors, including private corporations.

The Polluter Pays Principle and Corporate Accountability

The Supreme Court’s judgment invokes the well-established environmental law principle of “Polluter Pays,” which holds that entities responsible for environmental degradation must bear the cost of remediation and prevention. The Court observed that corporate entities operating in ecologically sensitive areas must conduct their activities with heightened awareness of their environmental impact and behave as guests in the habitat of endangered species.

The judgment specifically directed non-renewable and renewable power generators operating in priority and non-priority conservation areas of Rajasthan and Gujarat to conduct their business recognizing that they share the environment with the Great Indian Bustard and must operate with appropriate ecological sensitivity. This represents a practical application of the polluter pays principle, requiring industries whose infrastructure directly threatens wildlife to contribute toward conservation efforts through their CSR allocations.

Corporate Governance and the Stakeholder Model

The Supreme Court’s judgment reinforces a stakeholder-centric model of corporate governance, departing from the traditional shareholder primacy doctrine. The Supreme Court observed that the statutory mandate of Corporate Social Responsibility under Section 135 reflects the principle that corporate profits are not solely the private property of shareholders but are partly owed to the society that enables their generation. The judgment stated that the magic of legitimacy lies in the perspective that private property is a trust, not an absolute entitlement.

This philosophical foundation aligns with contemporary developments in corporate governance worldwide, where there is increasing recognition that corporations must serve broader societal interests beyond profit maximization for shareholders. The judgment places India at the forefront of jurisdictions that have constitutionalized corporate environmental responsibility, treating it not as discretionary corporate social investment but as a fundamental legal obligation.

Implications for Corporate India

Mandatory Environmental CSR Allocation

The immediate implication of the Supreme Court’s judgment is that companies covered under Section 135 can no longer treat environmental protection as one among many optional CSR activities. The judgment establishes that a meaningful portion of the mandatory two percent CSR spending must be allocated to environmental protection, conservation of endangered species, and ecological restoration. Companies that have historically focused their CSR spending exclusively on education, healthcare, or other social welfare activities must now reassess their policies to incorporate environmental components.

Current data indicates that environmental sustainability activities accounted for approximately twelve to fourteen percent of total CSR spending in recent financial years, with total CSR expenditure exceeding rupees twenty-nine thousand crore annually. The Supreme Court’s judgment suggests that this proportion must increase significantly, with environmental protection being treated as a core rather than peripheral CSR concern [9].

Enhanced Director Liability

The judgment strengthens the liability framework for directors who fail to ensure adequate environmental protection measures. By explicitly linking CSR environmental spending to the constitutional duty under Article 51A(g) and the statutory duty under Section 166(2), the Court has created multiple avenues for holding directors accountable. Directors who approve CSR policies that inadequately address environmental concerns may now face challenges on grounds of breach of statutory duties, potentially exposing them to penalties under Section 166(6) of the Companies Act, which provides for fines ranging from one lakh to five lakh rupees for violations.

Balancing Development and Conservation

The judgment acknowledges the tension between environmental conservation and developmental imperatives, particularly India’s commitment to renewable energy transition under international climate agreements. However, the Court firmly held that environmental safeguards are not adversaries to development but preconditions to it in ecologically fragile landscapes. The judgment stated that conservation of endangered species cannot be sacrificed at the altar of development, while simultaneously recognizing that both objectives must be pursued together without sacrificing one for the other.

This balanced approach requires companies to adopt more sophisticated project planning that integrates environmental considerations from the outset rather than treating them as afterthoughts or compliance burdens. The judgment essentially mandates that the cost of environmental protection must be internalized in business models rather than externalized onto society and future generations.

Comparative Analysis with Previous Judgments

The December 2025 judgment builds upon the Supreme Court’s earlier order in April 2021, which had imposed sweeping restrictions on overhead transmission lines across nearly 99,000 square kilometers. That order was subsequently modified in March 2024 after the Union government raised concerns about its impact on renewable energy projects and India’s international climate commitments. The March 2024 order had constituted a high-level expert committee to recommend balanced solutions.

The recent judgment represents the culmination of this process, incorporating the expert committee’s recommendations while firmly establishing the constitutional and statutory foundations of corporate environmental responsibility. Unlike the earlier orders that focused primarily on infrastructure restrictions, the December 2025 judgment addresses the broader question of corporate accountability and establishes CSR as a vehicle for fulfilling constitutional environmental duties.

Challenges in Implementation

Measuring Environmental Impact

One significant challenge in implementing the Supreme court judgment lies in measuring and verifying the environmental impact of Corporate Social Responsibility spending. Unlike traditional CSR activities in education or healthcare where outcomes can be relatively easily quantified, environmental conservation projects often yield results over longer timeframes and involve complex ecological assessments. Companies will need to develop robust monitoring and evaluation frameworks to demonstrate that their environmental CSR spending produces tangible conservation outcomes.

Allocation Between Competing Environmental Priorities

Companies operating across multiple geographical regions with diverse environmental challenges may face difficulties in allocating limited CSR resources between competing environmental priorities. For instance, a company with operations spanning coastal areas, forest regions, and arid zones must decide how to distribute environmental CSR spending across marine conservation, afforestation, and desert ecosystem protection. The judgment does not provide specific guidance on prioritization, leaving companies to make these determinations in consultation with environmental experts and affected communities.

Integration with Existing Regulatory Frameworks

Companies must now navigate the interaction between CSR-funded environmental activities and existing regulatory requirements under environmental laws such as the Environment Protection Act, 1986, the Wildlife Protection Act, 1972, the Forest Conservation Act, 1980, and state-level environmental regulations. The judgment makes clear that CSR cannot be used to fulfill basic regulatory compliance obligations but must represent additional contributions beyond minimum legal requirements.

The Role of Civil Society and Stakeholders

The supreme court judgment empowers civil society organizations, environmental groups, and affected communities to play a more active role in ensuring corporate compliance with environmental Corporate Social Responsibility obligations. By establishing environmental protection as a constitutional duty rather than discretionary spending, the judgment provides stronger legal foundations for public interest litigation and shareholder activism focused on environmental accountability.

Shareholders can now potentially challenge CSR policies that inadequately address environmental concerns under the oppression and mismanagement provisions of Sections 241 and 242 of the Companies Act, or through class action suits under Section 245. Environmental non-compliance may also be raised in general meetings and annual general meetings, creating reputational pressures on companies to demonstrate robust environmental CSR programs.

Future Directions and Conclusion

The Supreme Court’s landmark judgment establishes India as a pioneer in constitutionalizing corporate environmental responsibility. By declaring that CSR must inherently include environmental responsibility, the Court has fundamentally reshaped the relationship between business and nature under Indian law. The judgment makes clear that the era of treating environmental protection as optional corporate philanthropy has ended, replaced by a regime where ecological stewardship is a binding legal and constitutional obligation.

For corporate India, the Supreme Court judgment necessitates a comprehensive reimagining of Corporate Social Responsibility (CSR) strategies, with environmental protection elevated from a peripheral concern to a central mandate. Companies must now integrate environmental considerations into their core business strategies, recognizing that long-term commercial viability depends on ecological sustainability. The judgment calls for a new generation of corporate leadership that views environmental protection not as a constraint on business but as a fundamental responsibility that enhances corporate legitimacy and social license to operate.

The Great Indian Bustard case demonstrates how environmental litigation can serve as a catalyst for progressive legal developments that reconcile conservation with development. As India pursues ambitious economic growth and renewable energy targets, the principles established in this judgment will guide the difficult but necessary task of ensuring that development proceeds in harmony with nature rather than at its expense. The judgment reminds us that corporations, as powerful organs of society enjoying the benefits of legal personhood, must shoulder commensurate responsibilities toward the environment that sustains all life.

References

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[2] IUCN Red List. (2025). Great Indian Bustard – Ardeotis nigriceps. Retrieved from https://www.iucnredlist.org/species/22691932/134188105

[3] Bar and Bench. (2025). Underground power lines, ban on new wind turbines: Supreme Court accepts measures to protect Great Indian Bustard. Retrieved from https://www.barandbench.com/amp/story/news/underground-power-lines-ban-on-new-wind-turbines-supreme-court-accepts-measures-to-protect-great-indian-bustard

[4] LatestLaws. (2025). Supreme Court treats Environmental spending under CSR as a Constitutional Mandate. Retrieved from https://www.latestlaws.com/latest-news/supreme-court-treats-environmental-spending-under-csr-as-a-constitutional-mandate-232448/

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[6] ClearTax. (2025). Corporate Social Responsibility Under Section 135 of Companies Act 2013. Retrieved from https://cleartax.in/s/corporate-social-responsibility

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[8] Oxford Academic – Journal of Environmental Law. (2022). Environmental Constitutionalism and Duties of Individuals in India. Retrieved from https://academic.oup.com/jel/article/34/3/399/6648946

[9] The CSR Universe. (2025). CSR must include environment & ecology, rules Supreme Court; calls green spending a constitutional duty, not charity. Retrieved from https://thecsruniverse.com/articles/csr-must-include-environment-ecology-rules-supreme-court-calls-green-spending-a-constitutional-duty-not-charity