Published On: 14th May 2025
Authored By: Anukriti
MDU-CPAS, Gurugram
Introduction
Climate change, once considered a distant crisis, is now an immediate global emergency. Rising temperatures, extreme weather, and ecological disruptions have intensified the demand for legal action. While governments are often targeted in climate litigation, corporations—major contributors to greenhouse gas emissions—are increasingly being held accountable. The judicial bodies in India, particularly the Supreme Court and National Green Tribunal (NGT), have played a crucial role in enforcing corporate responsibility through principles like ‘Polluter Pays’ and ‘Sustainable Development.’ However, legal frameworks remain fragmented, raising the question: Can India’s legal system effectively regulate corporate environmental responsibility, or will loopholes continue to weaken accountability?
This article examines the changing landscape of climate change litigation in India, focusing primarily on corporate accountability. It investigates the emerging legal structures, underscores significant rulings, and critically evaluates the deficiencies in holding corporations accountable for their role in climate change. The objective is to highlight the requirement for strong legal frameworks that not only promote corporate social responsibility but also guarantee legal accountability for environmental damage.
Climate change and corporate accountability
Corporations, particularly fossil fuel firms, significantly contribute to the increase in greenhouse gas emissions. They persist in resource extraction despite cautionary advice, jeopardizing the target of achieving net-zero emissions by 2050. This conduct suggests that these corporations place profits above sustainability. Corporate emissions can be divided into upstream emissions, which occur during the extraction and processing of raw materials, and downstream emissions, which take place when consumers use and dispose of products[1]. The Carbon Majors Database, published by the Carbon Disclosure Project (an NGO), states that “Over half of global industrial emissions since human-induced climate change was officially recognized can be traced to just 25 corporate and state-producing entities.[2]”
The 2023 Emissions Gap Report from the United Nations Environment Programme (UNEP) highlights the pressing need for a worldwide response to climate change. In September 2023, temperatures were 1. 8°C higher than pre-industrial levels, with forecasts suggesting it might be the warmest year on record. Projections further imply that even if all nations meet their existing climate commitments, global temperatures could still increase by 2.9°C this century[3].
Milton Friedman famously asserted that a company’s primary obligation is to maximize profits[4], a perspective that now appears antiquated in the context of the climate emergency. Corporate Social Responsibility (CSR) has transitioned from simple philanthropy to a recognized formal concept, enshrined in laws such as India’s Companies Act, 2013[5]. India is positioned 10th in the Climate Change Performance Index (CCPI)[6], excelling in greenhouse gas emissions and energy utilization but not performing as well in renewable energy. The nation has made noteworthy advancements in achieving its Nationally Determined Contributions (NDCs) under the Paris Agreement, with a marked increase in non-fossil fuel energy sources and a 33% decrease in emission intensity from 2005 to 2019.[7]
Climate change litigation in India
Recently, retired Supreme Court judge Justice Hima Kohli has advocated for a strong national climate law, stating that existing environmental legislations are frequently fragmented and inadequate to address the complexities of climate change[8]. She additionally remarked, “A strong national climate law rooted in constitutional principles and in line with international obligations is, to my mind, the way forward,”[9]
This leads us to reflect on, why climate change litigation? Climate litigation symbolizes a pioneering solution to alter the dynamics of the struggle against climate change. According to the Global Climate Litigation Report 2023, climate change litigation offers civil society, individuals, and others a potential route to confront insufficient responses by governments and the private sector to the climate crisis.[10]
We know that India has made considerable advancements in environmental jurisprudence and will soon transition into climate jurisprudence. Article 21 of the Indian Constitution, which grants the right to life, also encompasses the right to a healthy and clean environment. Furthermore, a healthy and clean environment denotes the right to be free from the adverse effects of climate change. The term “adverse effects of climate change” has already been included in international jurisprudence and, with this court judgment, it has now been incorporated into our domestic law.
On March 21, 2024, a progressive judgement related to climate change was delivered by the Supreme Court in the case of M K Ranjitsinh & Ors. v. Union of India &Ors[11]. The SC delivered its judgment on the basis of following consideration:
C. The mission to combat climate change
- India’s commitment under international conventions
- India has made significant international commitments in its pursuit of global environmental conservation goals. India was a participant in the Kyoto Protocol, which came into force on February 16, 2005. This international agreement, linked to the UNFCCC, obligates its Parties to establish binding emission reduction targets. The protocol allows countries to meet these targets through national measures and offers additional mechanisms such as International Emissions Trading, Clean Development Mechanism, and Joint Implementation.
While climate litigation in India has largely concentrated on holding the government accountable, an emerging trend indicates a shift—corporations are now being held responsible for their environmental impact. With increasing awareness and judicial intervention, companies can no longer operate in a legal void regarding climate accountability. Another notable development in the field of climate change litigation is the case of Hindustan Zinc Limited v. Rajasthan Electricity Regulatory Commission[12], the court stressed the duty to acquire energy from renewable sources, indirectly highlighting corporate accountability in relation to climate change mitigation.[13]
Emerging legal frameworks for corporate accountability
The corporate sector is the fundamental driving force behind the economy. This indicates that it has been a significant contributor to environmental damage, but it is less recognized that it also has the ability to adopt and promote sustainable practices. A well-known adage states that prevention is preferable to remedy, which applies perfectly in this context. If corporations, rather than solely pursuing profit, should aim to prioritize sustainability. It pertains to the principle of environmental law; the Precautionary Principle and the Polluter Pays Principle. This principle permits measures to be taken to safeguard the environment early on, and those who pollute are required to bear the costs of control to prevent harm to human health or the environment. Concerning climate change, there isn’t a specific climate law in India as such, but they are currently governed by existing environmental laws, such as:
- The Environment (Protection) Act, 1986: Corporations are required to adhere to this Act, which grants the central government the power to supervise potentially damaging activities. Approvals are required for projects that may have negative environmental effects.[14]
- The Water (Prevention and Control of Pollution) Act, 1974: Corporations are expected to comply with stringent effluent standards and obtain permits for both water usage and discharge. Noncompliance may lead to penalties, suspensions of operations, and liabilities for ecological damage.[15]
- The Air (Prevention and Control of Pollution) Act, 1981: Corporations are required to reduce air pollution by managing emissions from industrial activities and vehicles. Compliance necessitates investments in pollution control technologies, monitoring air quality, and reporting to pollution control authorities.[16]
Within the Indian Constitution, provisions for environmental protection are detailed in the sections regarding Directive Principles of State Policy and Fundamental Duties. Although the Constitution does not directly address protection against the adverse impacts of climate change or a fundamental right to a clean and healthy environment, recent years have seen judicial activism bridging this gap.
Corporate Environmental Liability under Companies Act 2013
The Companies Act 2013 has highlighted Corporate Social Responsibility (CSR), stressing corporate environmental accountability. Section 135 of the Act, in conjunction with Companies (Corporate Social Responsibility Policy) Rules, 2014, requires companies that meet certain conditions to form a CSR committee that oversees CSR policies and initiatives. These corporations must dedicate at least 2% of their average net profits from the last three financial years to CSR activities, with the board’s report detailing the relevant CSR efforts.
Role of NGT in Corporate Climate Accountability
The National Green Tribunal (NGT) was established under the NGT Act, 2010, to ensure the efficient and swift resolution of environmental cases. It plays an essential role in climate change litigation and corporate responsibility by adjudicating environmental disputes, punishing polluters, and enforcing environmental regulations.
The NGT has issued directions multiple times by suo moto cognizance. In the case of the Gas Leak at LG Polymers Chemical Plant in RR Venkatapuram Village, Visakhapatnam in Andhra Pradesh[17], the NGT provided directions:
The sum of Rs. 50 to be deposited by LG Polymers with the DM, Visakhapatnam, will be allocated toward partial liability and interim compensation to be utilized for environmental restoration and compensation for victims based on the restoration plan to be formulated.
The NGT said:
“Safety of citizens and environment are of prime concern. Any economic or industrial activity, however necessary, has to be consistent with the safety of human beings and the environment. The damage to human life, human health and environment has to be restored by applying the ‘Sustainable Development’ principle, of which ‘Precautionary’ and ‘Polluter Pays’ principles are part. In this regard, a significant role has to be played by the statutory authorities constituted under the Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and the Environment (Protection) Act, 1986.”
Recent policy development and stricter climate laws
Extended Producer Responsibility (EPR) is becoming essential for corporate reporting, especially in industries subject to strict environmental regulations. Extended Producer Responsibility (EPR) is a policy approach where producers take on the responsibility for managing the end-of-life stage of their products[18]. EPR compliance not only meets legal requirements but also attracts investors focused on ESG (Environmental, Social, and Governance) standards, making it an important factor in sustainability reporting. In May 2021, the Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Report (BRSR), replacing the earlier Business Responsibility Report (BRR). Starting FY 2023, SEBI mandates the top 1000 listed entities in India by market capitalization to incorporate BRSR filings in their Annual Reports. In July 2023, SEBI expanded ESG metrics for mandatory disclosure under ‘BRSR Core’ for specific listed companies in India.[19]
Challenges and gaps in legal framework
Despite the growing role of courts and tribunals in climate related cases, several legal, institutional and enforcement challenges hinder the effectiveness of climate change litigation in India.
One such issue is Greenwashing. It is the act of the corporations of exaggerating or making false claims about the environmental friendliness or sustainability of a product, service or company. It is a dangerous practice as it can deceive consumers into buying products that undermine the environment sustainability[20].
HUL Greenwash case: In 2011, the Indian government’s Ministry of Environment and Forests files a case against Hindustan Unilever Limited (HUL) for making false claims in its advertising about the environmental benefits of its Surf Excel Easy Wash Detergent. The company had claimed that the detergent was “100% natural” and “environment- friendly”, but in reality, it contained synthetic ingredients. HUL was fined Rs. 10 lakhs by the Central Pollution Control Board[21].
Apart from this, India lacks standalone climate change law, unlike UK (Climate Change Act, 2008) and Germany (Climate Protection Law, 2019) and limited jurisdiction of NGT prevents it from prosecuting corporations for criminal environmental offenses.
Conclusion
Climate change litigation in India is gaining momentum, with courts and the National Green Tribunal (NGT) reinforcing corporate accountability. However, the absence of a dedicated climate law and inconsistent enforcement of existing regulations continue to pose challenges. While legal actions against corporations are on the rise, issues like greenwashing and weak penalties hinder real progress.
To ensure effective accountability, India must introduce a comprehensive climate law, strengthen corporate emission regulations, and improve monitoring mechanisms. As climate risks intensify, a robust legal framework is essential to compel corporations to adopt sustainable practices, balancing economic growth with environmental responsibility.
Reference(s):
[1] Josh Axelrod, ‘Corporate Honesty and Climate Change: Time to own up and act’ (February 26, 2019) NRDC < https://www.nrdc.org/bio/josh-axelrod/corporate-honesty-and-climate-change-time-own-and-act> accessed 11 March 2025
[2] Carbon Disclosure Project, ‘Carbon Majors Report’ (2017)
[3] United Nations Environment Programme, Emissions Gap Report 2023: Broken Record- Temperatures hit new highs, yet world fails to cut emissions (again) https://www.unep.org/emissions-gap-report-2023 accessed 12 March, 2025
[4] Milton Friedman, ‘The Social Responsibility of Business is to increase Profits’ (1970) NYT
[5] Companies Act, 2023 s.135
[6] Jan Burck and others, CCPI 2025, ‘Results: Monitoring Climate Mitigation Efforts of 63 Countries plus the EU (Germanwatch, NewClimate Institute & Climate Action Network, November 2024) 18 https://ccpi.org/ accessed 12 March, 2025
[7] Ibid 5
[8] Aaditi Anand Sinha, ‘Holding the State Accountable, Navigating Climate Change Litigation in India’ November 11 2024 https://vidhilegalpolicy.in/blog/holding-the-state-accountable/ accessed 12 March, 2025
[9] PTI, ‘Fragmented laws not enough, says ex-SC Judge; calls for comprehensive climate law in India’ (September 28, 2024) https://m.economictimes.com/news/india/fragmented-laws-not-enough-says-ex-sc-judge-calls-for-comprehensive-climate-law-in-india/articleshow/113762329.cms accessed 12 March, 2025
[10] United Nations Environment Programme, ‘Global Climate Litigation Report:2023 Status Review’ (UNEP, 2023) 7 https://www.unep.org/resources/report/global-climate-litigation-report-2023-status-review accessed 11 March, 2025
[11] M K Ranjitsinh & Ors. v. Union of India & Ors. [2024] 3 SCR 1320
[12] Hindustan Zinc Ltd. v. Rajasthan Electricity Regulatory Commission, Civil Appeal No. 4417 of 2015; (2015) 12 SCC 611
[13] British Institute of International and Comparative Law, ‘Global Perspectives on Corporate Climate Legal Tactics- India Executive Summary’ (BIICL, 2023) 2 https://www.biicl.org accessed 12 March 2025
[14] Noor Talib, ‘Environmental Regulations and Corporate Legal Responsibilities in India’ (2024) 8 (11) International Journal of Engineering Applied Sciences and Technology 83, 84 https://www.ijeast.com accessed 12 March, 2025
[15] Ibid 14
[16] Ibid 14
[17] Gas Leak at LG Polymers Chemical Plant in Visakhapatnam, In Re, 2020 SCC OnLine NGT 129
[18] Report Yak, ‘Extended Producer Responsibility in India- Reporting & Compliance’ (15 October 2024) https://reportyak.com/blog/extended-producer-responsibility/ accessed 12 March, 2025
[19] Melissa Cyrill, ‘India’s updated Sustainability Reporting Format and Rules for ESG Ratings Providers’ (July 25, 2023) https://www.india-briefing.com/news/india-brsr-core-esg-rating-provider-regulation-29062.html/ accessed 12 March, 2024
[20] Manoj Sonawala, ‘Green Washing and Green Blushing’ (2023) 45 Chartered Secretary 45 https://www.icsi.edu/media/webmodules/CSJ/April/11ArticleManojSonawala.pdf accessed 12 March, 2025
[21] Ibid 20
