The judicial push for environmental CSR

India emerged as a pioneer for mandating profit-sharing for social good through the Companies Act, 2013 — a visionary move to channel corporate earnings for crucial societal objectives. However, the environment remains largely neglected, often sidelined by prevailing corporate priorities. Despite India’s commitment to net-zero emissions by 2070 at COP26, and escalating climate challenges from air pollution, water scarcity, and poor waste management, ecological needs continue to be underrepresented in Corporate Social Responsibility (CSR) funding.

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However, recent Supreme Court observations have reframed environmental spending — not as mere discretionary charity, but as a constitutional mandate. By invoking Article 51A (g), the judiciary underscored that the right to conduct business is inseparably linked to the responsibility to restore our planet. The neglect of the habitats of the Great Indian Bustard by energy firms catalysed the Court to issue this mandate.

Skewed funding

An analysis of CSR data exposes a lopsided spending pattern that favours human-centric development at the expense of the environment. Over the past seven years, funds have been overwhelmingly allocated to social sectors, with education receiving approximately 38%, healthcare 22%, and rural development 10%. Conversely, the environment averaged between 7%-9%, creating an unbalanced ledger that critically underfunds vital sustainability projects. This disparity suggests that corporations view environmental crises as distant threats compared to immediate social needs. Yet, there are commendable exceptions that prove large-scale restoration is possible.

Mahindra’s ‘Project Hariyali’ has planted almost 25 million trees, focusing on survival rates rather than just sapling counts; ITC’s forestry program spans 1.3 million acres, integrating livelihoods with conservation; the Tata Group leads water conservation through massive watershed management; Coca-Cola and Hindustan Unilever have undertaken circular waste management projects; and JSW has advanced mangrove restoration. These initiatives demonstrate that prioritising the environment yields significant, and measurable impact. Nevertheless, most companies still pursue ‘quick wins’ such as one-off awareness drives, and sidestep the arduous processes of forest restoration and natural resource recovery.

Challenges of restoration

Much needed environmental restoration, including afforestation, has been neglected in India as is evidenced in the country’s report on the Bonn Challenge (a global, voluntary effort to restore 350 million hectares of degraded and deforested land by 2030). While the nation aims to restore 26 million hectares by 2030, private companies have contributed a negligible 2% to the 9.8 million hectares restored so far.

There is a massive ‘restoration gap’ between the damage caused by industrial activity and the investment made to fix it. Companies prefer social projects such as environmental awareness campaigns, renewable energy, or basic green initiatives. These give quick visibility, clear results, and facilitate easy reporting. In contrast, land-based projects such as forest restoration with tree planting, habitat recovery, water conservation, and waste management take a long time. In addition, they also require expert skills in tree-growing, soil health, and biodiversity checks — skills that most CSR partners don’t have. Corporations often support initiatives such as the recently popular Miyawaki plantations, which offer rapid growth and look excellent in annual reports, but often compromise native ecology and biodiversity. The situation is worsened by an urban bias in the selection of the target area; a lack of practical policies for degraded lands; and poor collaboration with forest departments and other organisations.

Need for reimagining strategy

The current judicial push demands an urgent transition to a ‘ecosystem recovery’ strategy. This requires reimagining corporate accountability, and replacing conventional auditing with time-bound restoration initiatives and their ecological assessments.

Indicators of success should be tangible ecological services such as soil carbon sequestration, water retention, and biodiversity recovery. To achieve this, India must prioritise degraded and remote forest lands lacking resources through appropriate restoration initiatives. Further, the country needs to build alliances between forest departments, universities, conservation NGOs and joint forest management committees. These partnerships can establish dedicated restoration units under scientific supervision, giving due regard to native species and ecology. Furthermore, the challenge of long-term financing for landscape-scale projects and restoration challenges can be solved by establishing a restoration trust or an escrow fund. This would guarantee continuity and provide the long-term security necessary for real ecological impact.

Corporate governance in India must evolve from being shareholder-centric to ecosystem-centric, with directors acting as fiduciaries for the environment and moving past the ease of basic compliance. When the health of our planet is treated as a mandatory, non-negotiable part of business strategy, the country moves toward a future where sustainable development becomes a lived reality.

Mohan Chandra Pargaien is Former Principal Chief Conservator of Forests, Telangana and adviser to SCCL