Why in News?
The Supreme Court of India held that corporates have a fundamental duty to protect the environment, interpreting Corporate Social Responsibility (CSR) to inherently include environmental responsibility.
Description:
| Great Indian Bustard: Judgment arose from petitions regarding risks to the Great Indian Bustard (GIB).One of the heaviest flying birds in the world. Conservation Status: IUCN Red List: Critically Endangered, Wildlife (Protection)Act, 1972: Schedule 1, CITES: Appendix 1.Habitat: Arid and semi-arid grasslands, mainly in Rajasthan and Gujarat. Distribution: The species has a current viable population of 100- 150 individuals in India and mainly survives in the Thar Desert of Rajasthan that holds about 100 individuals. Key Constitutional Provisions: Article 51A(g) (Fundamental Duty): Duty of every citizen “to protect and improve the natural environment including forests, lakes, rivers and wildlife, and to have compassion for living creatures.”SC extended this duty to corporate entities (legal persons). |
About Corporate Social Responsibility (CSR):
Definition: CSR involves corporate initiatives focused on societal, environmental, and economic development, enabling companies to positively impact communities.
CSR Framework in India:
- Legal Basis: Governed by Section 135 and Schedule VII of the Companies Act, 2013, and Companies (CSR Policy) Rules, 2014, which outline eligibility criteria, implementation, and reporting requirements for CSR activities.
- Criteria for CSR: Mandatory for companies meeting any of the following:
- Net worth of ₹500 crore or more,
- Annual turnover of ₹1,000 crore or more,
- Net profit of ₹5 crore or more.
- Such companies are required to allocate 2% of their average net profits from the past three years toward CSR.
Penal Provisions: If a company fails to meet CSR obligations, it faces fines ranging from ₹50,000 to ₹25 lakh.
- Responsible officers may face imprisonment (up to three years), fines between ₹50,000-₹5 lakh, or both.
2019 Amendment: Prior to 2019, unspent CSR funds could be carried forward to the next fiscal.
- Post-amendment, unspent funds must be transferred to a specified Schedule VII fund by the end of the fiscal year and utilized within three years, failing which, they must be deposited in a government-specified fund.
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