Article 3: The judicial push for environmental CSR
Why in news: The Corruption Perceptions Index 2025 highlights worsening global corruption trends and India’s stagnant performance, raising concerns about governance quality, economic efficiency, and its impact on investment and growth prospects.
Key Details
- Global corruption worsening, with CPI average falling to 42 and most countries below 50
- India scores 39 (rank 91), showing decade-long stagnation despite economic growth
- Corruption increases economic costs, uncertainty, and reduces productivity & investment
- Complex compliance system with 26,000+ legal provisions increases scope for discretion and rent-seeking
- Digital reforms (DBT, GST, digital payments) have helped reduce leakages and improve transparency
CSR Framework and Environmental Neglect
- India mandated CSR through the Companies Act, 2013, promoting profit-sharing for social good
- Despite climate commitments (net-zero by 2070), environmental concerns remain sidelined
- Issues like air pollution, water scarcity, and waste mismanagement are rising
- CSR spending prioritises social sectors over ecological sustainability
- Environment is still treated as secondary to immediate human needs
Judicial Intervention and Constitutional Duty
- The Supreme Court reframed environmental CSR as a constitutional responsibility
- Based on Article 51A(g) - duty to protect and improve the environment
- Business rights are now linked with environmental restoration obligations
- Case of Great Indian Bustard habitat destruction triggered this shift
- Marks a move from voluntary charity - mandatory accountability
Skewed CSR Spending Patterns
- CSR funds distribution:
- Education - 38%
- Healthcare - 22%
- Rural development - 10%
- Environment - only 7–9%
- Indicates imbalance and underfunding of sustainability efforts
- Corporates prefer short-term visible projects over long-term ecological work
- Some notable positive examples:
- Mahindra - 25 million trees planted
- ITC - 1.3 million acres afforestation
- Tata - water conservation initiatives
- However, most firms still focus on “quick wins” instead of deep restoration
Challenges in Environmental Restoration
- India aims to restore 26 million hectares by 2030, but progress is limited
- Private sector contribution is only ~2% of restored land
- Key barriers:
- Long gestation period of restoration projects
- Need for scientific expertise (soil, biodiversity, ecology)
- Preference for easy, report-friendly initiatives
- Practices like Miyawaki plantations may harm native ecosystems
- Additional issues:
- Urban-centric CSR focus
- Weak policy support for degraded lands
- Poor collaboration with forest authorities
Way Forward: Ecosystem-Centric CSR
- Shift from compliance-based CSR - ecosystem recovery model
- Focus on measurable outcomes:
- Soil carbon storage
- Water conservation
- Biodiversity restoration
- Promote partnerships:
- Forest departments
- Universities
- NGOs and local committees
- Create restoration funds/escrow mechanisms for long-term financing
- Transform corporate governance:
- From shareholder-centric - environment-centric approach
- Make sustainability a core business responsibility, not optional activity
Conclusion
The CPI 2025 underscores that corruption remains a critical challenge affecting governance and economic efficiency in India. While digital reforms offer promising improvements in transparency, structural issues like regulatory complexity and weak oversight persist. Sustained institutional reforms, simplification of compliance frameworks, and strengthening accountability mechanisms are essential for improving governance credibility and supporting India’s long-term economic ambitions.
Descriptive question:
“Corruption is not merely a governance issue but an economic constraint.” Examine in the context of India using insights from the Corruption Perceptions Index 2025. (250 words, 15 marks)