[Answered] Examine the role of Corporate Social Responsibility (CSR) as a mandatory obligation for environmental restoration in India. Critically analyze how directing CSR funds toward grassland conservation can balance ecological health with corporate accountability under the ‘Polluter Pays’ principle.

Introduction

India’s environmental governance is evolving as the Supreme Court increasingly interprets Corporate Social Responsibility under the Companies Act, 2013, as a binding obligation, aligning corporate conduct with constitutional duties and ecological restoration imperatives.

CSR: From Voluntary Philanthropy to Legal Obligation

1. Statutory Basis: Section 135, Companies Act, 2013 mandates CSR spending for eligible firms.
2. Judicial Reinterpretation: Supreme Court (2024) read CSR as enforceable responsibility, not charity.
3. Constitutional Linkage: Article 51A(g): duty to protect environment extended to corporations as “legal persons”.
4. Paradigm Shift: CSR framed as compliance-based obligation, not discretionary benevolence.

Environmental Restoration through CSR

1. Expanded CSR Scope: Schedule VII includes environmental sustainability, biodiversity, ecological balance.
2. Judicial Precedent: Great Indian Bustard (GIB) cases (2021–2024) linked corporate activity to wildlife harm.
3. Restoration Logic: CSR funds can support: Grassland restoration, Species recovery programmes and Habitat maintenance and monitoring.
4. Global Parallel: OECD guidelines endorse corporate contribution to ecosystem services.

Grasslands: The Ecological Rationale

1. Neglected Ecosystems: Grasslands cover ~10% of India but receive minimal conservation funding.
2. Biodiversity Value: Home to GIB, blackbuck, florican.
3. Climate Co-benefits: Carbon sequestration, drought resilience, soil conservation.
4. Policy Gap: Forest-centric conservation ignores open natural ecosystems.

CSR and the ‘Polluter Pays’ Principle

1. Doctrinal Origin: Recognised in Vellore Citizens’ Welfare Forum v. Union of India (1996).
2. Operationalisation via CSR: Corporate financing for mitigation and restoration.
3. Judicial Reinforcement: SC linked corporate infrastructure (power lines) to ecological harm.
4. Accountability Mechanism: CSR becomes a tool for cost internalisation.

Balancing Ecology and Corporate Accountability

1. Positive Outcomes: Predictable funding for long-term restoration. Aligns ESG goals with legal compliance. Reduces burden on public exchequer.
2. Administrative Flexibility: Expert committees (2024) balance renewable energy goals with biodiversity.
3. Case Study: Undergrounding transmission lines in priority GIB habitats.

Critical Challenges and Limitations

1. Implementation Ambiguity: No clarity on: Which firms pay, Quantum of contribution and Geographic targeting.
2. Audit and Outcome Gap: CSR compliance ≠ ecological success.
3. Federal Concerns: Centralised judicial mandates may bypass state conservation priorities.
4. Risk of Greenwashing: Spending without measurable ecological outcomes.

Way Forward

1. Clear Regulatory Framework: Linking CSR to Environmental Impact Assessment (EIA) outcomes.
2. Outcome-based Metrics: Biodiversity indicators, habitat recovery indices.
3. Institutional Coordination: MoEFCC, State governments, utilities, corporates.
4. Strengthened Monitoring: Independent ecological audits of CSR-funded projects.

Conclusion (30 words)

As Justice P.N. Bhagwati envisioned in environmental jurisprudence, law must serve ecology. Judicially enforced CSR can advance restoration, but only robust governance can translate corporate accountability into living grasslands.