Corporate Social Responsibility for UPSC: Supreme Court and Wildlife Conservation

Introduction

The Supreme Court of India made an important ruling concerning environmental issues, broadening the definition of Corporate Social Responsibility to include a corporation’s obligation to protect ecosystems. The Court stated that it is impossible to separate a corporation’s economic activity from its environmental responsibilities.

The Supreme Court identified several aspects of corporate responsibility for protecting ecosystems:

• Corporate protection of all ecosystems is not an option
• One of the primary responsibilities of corporations is to prevent the extinction of species
• Corporations should expand their view of Corporate Social Responsibility from only serving the interests of their shareholders to fulfilling a larger societal role.

Background of the Supreme Court Ruling

The SC comment referred to the Great Indian Bustard (GIB) case concerning the conservation of a critically endangered species, Tetrao urogallus (GIB). The Supreme Court found that there were numerous infrastructure and energy projects that were having a damaging effect on the Great Indian Bustard population.

The Supreme Court made several very strong symbolic statements in order to establish corporate accountability for being a responsible steward for the environment.

Corporations as Guests in Wildlife Habitats:

The Supreme Court ruled that any corporation that engages in business practices in areas that are considered ecologically sensitive must be treated as a “guest” in the home of the wildlife that inhabit the area.

This means that companies operating in those areas must be good citizens and honor the ecological rights of those species.

Directions to Power Generators with Respect to the GIBs- For all projects that impact the GIBs, the Court has established that the projects must:

1. Provide financial support for conservation;
2. Support both in-situ and ex-situ conservation efforts.
3. The Court issued a strong message and made it clear that all types of development may not result in irreversible harm to the ecology; thus, all options for economic growth must incorporate ecological sustainability.

Corporate Social Responsibility

What Corporate Responsibility Was in the Past: Historically, corporate responsibility was viewed as:

1. The maximization of profits for shareholders;
2. The provision of efficient resource strategies and revenue generation opportunities.

Expansion to Corporate Responsibility by the U.S. Supreme Court: In a recent ruling by the United States Supreme Court, corporate responsibility has taken on additional meaning, as corporate duty now includes all stakeholders, including society and nature, and should include the internalization of any environmental harm resulting from the actions of corporations as a component of the operating costs of doing business, noting that corporate profits may not be regarded as more important than the existence of the ecosystem.

What Businesses Should Expect of Themselves in The Future: Companies are now expected to align their businesses with the following:

1. The protection of biodiversity;
2. Achieving sustainable development goals;
3. Ensuring intergenerational equity.

Constitutional & Statutory Support for environment protection

The constitutional basis for corporate duty for the environment is as follows:

1. Under Article 48A of the Constitution (Directive Principles of State Policy), the State is mandated to protect and enhance the environment through the conservation of forests and wildlife; and
2. Article 51A(g) of the Constitution (Fundamental Duties) provides a duty for all citizens to protect and improve the environment.

Statutory Framework that Supports the Judgment

• The Environment Protection Act, 1986 provides an overall legal framework in India that covers many facets of environmental protection and thus the management of waste materials.
• The Wildlife Protection Act, 1972 provides a framework of legal protection to protect endangered or threatened species and wildlife from poaching and/or extinction.
• The Companies Act of 2013 has provided a framework to institutionalise CSR through the establishment of Section 135 of the Companies Act, 2013.

Section 135 of the Companies Act, 2013

India is one of the few countries in the world to have made CSR legally mandatory.

Applicability of CSR: The CSR guidelines of Section 135 apply to all companies that meet at least one of the following criteria:

• Net Worth of a Company greater than or equal to Rs. 500 crore
• Annual Turnover of a Company greater than or equal to Rs. 1000 crore
• Annual Net Profit of a Company greater than or equal to Rs. 5 crore

Under the CSR guidelines, all companies must spend at least 2% of their average annual net profits over the last 3 financial years on CSR activities.

Schedule VII of the Companies Act, 2013

CSR funding can be used for:

• Protection of Flora and Fauna
• Wildlife Conservation
• Biodiversity Conservation
• The Conservation of Natural Resources
• Restoring the Ecological Balance
• Environmental Sustainability Initiatives

This aligns with the view of the Supreme Court of India that companies must fund the conservation of flora and fauna (including wildlife) and biodiversity.

Other Examples of Important CSR Activities

• Education
• The Protection and Maintenance of Health and Sanitation
• Poverty Alleviation
• Rural Development
• Disaster Response and Management
• Gender Equality
• Protecting the Nation’s Heritage, Culture and Traditions

Examples of Activities that Are Not Considered as Part of the CSR Mandate

• Political Contributions
• Normal Day-to-Day Business Activities
• Activities of Companies that Are Limited to Their Own Employees

Purpose of including in-situ and ex-situ Conservation by Supreme Court

The intention of the Supreme Court in mentioning both forms of conservation (in-situ and ex-situ) was to illustrate that the responsibility of corporations (to protect species) must be more than a symbolic gesture, and be a comprehensive commitment to protecting wildlife.

In-Situ Conservation

Refers to the conservation of wild species within their natural habitat. It is centred on maintaining the following elements of a species’ habitat:

• The protection of the habitat itself
• Minimising the impact of human activity on the habitat
• Maintaining the ecological balance in the habitat
• With respect to the GIB case specifically:
• Preserving natural grassland habitats
• Reducing the loss of habitat due to the development of overhead power transmission lines, buildings and roads

Ex: Preserving the habitat of the Great Indian Bustard in Rajasthan and Gujarat.

Ex-Situ Conservation

Refers to the conservation of species outside of their natural habitat. Occurs when:

• Species populations fall below critical levels
• Species are at risk of immediate extinction
• Includes the following elements:
• Captive breeding programmes
• Conservation breeding centres
• Wildlife research facilities

Ex: Conservation breeding centres for the GIB.

Importance of both by Supreme Court

• In-situ ensures the long term survival of the species.
• Ex-situ ensures the immediate protection of the species.
• Corporations causing ecological harm are required to fund both methods of conservation.

What Makes GIB Case Significant

The GIB case has emerged as a significant illustration of the conflict between development and conservation. Current Status of GIB-

• The GIB is currently listed as Critically Endangered by the IUCN Red List.
• The GIB is one of the heaviest species of flying birds.
• The GIB is an indicator of the health of grassland ecosystems.

Main Threats to GIB

Overhead power transmission line and renewable energy projects are immediate threats to the GIB.

Major Threats

• Overhead power transmission lines
• Renewable energy infrastructure (wind & solar)
• Non-renewable energy projects
• Habitat fragmentation and collision mortality

Why the Judgment Is Important

Corporates were made financially accountable, not merely advisory stakeholders. Court acknowledged that:

• Infrastructure projects can cause species extinction
• Economic activity must bear ecological costs

Corporate Role in Wildlife Conservation: Existing Resources & Example Firms

The ruling addressed examples of corporates currently involved in conservation-related activities. Examples of Corporate Involvement-

• TATA Group– Protect forests, Protect biodiversity efforts.
• Reliance Foundation– Restore mangroves, Provide wildlife conservation efforts.
• ITC- Ecosystems based forestry, Expand green cover.
• Mahindra Group-Restore habitat for species, Support for Conservation non-governmental Organisations.

PYQ’s on CSR in UPSC

The UPSC has asked CSR questions through several multi-choice questions with statements. Topics That Have Been Asked:

1.) Mandatory or voluntary CSR.
2.) Types of Activities Involved Under Schedule VII.
3.) Treatment of Unspent CSR funds.
4.) Inclusion of Environmental and Wildlife Activities Under CSR.

Patterns To Take Into Account: Each question consisted of multiple statements with either 1 or 2 subtly false statements; therefore, the interpretation must be based upon law vs perception.

For the Mains Level, the Following Concepts May Be Used:

• Polluter Pays Principle
• Role of Private Sector in Biodiversity Conservation
• Judicial Activism in Environmental Governance
• CSR as Tool for Sustainable Development

Ethics GS Paper IV Angle

The judgment has strong ethical underpinnings.

Key Ethical Dimensions

• Profit vs Planet dilemma
• Corporate moral responsibility
• Stewardship of natural resources
• Duty towards future generations

Conclusion

The Supreme Court has fundamentally reshaped the idea of corporate responsibility by:

• Reframing CSR as an ecological and constitutional duty
• Making corporates accountable partners in conservation
• Reinforcing that development must coexist with species survival

Economic growth loses legitimacy if it leads to irreversible ecological loss.
Corporations must now act not just as profit-makers, but as stewards of nature.

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