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INTERNSHIP RESEARCH PAPER TOPIC: CORPORATE LIABILITY FOR CLIMATE CHANGE Legal theories and cases holding corporations accountable for their environmental impact, Analysis of recent lawsuits and regulatory developments in climate change litigation.

Publications, Research paper

Abstract:

Climate change is a threat to humanity, affecting health, population in total, industries, businesses etc. India has been taking initiatives and implementing strategies on a national and international level in making the environment a safe space by using resources in a sustainable way.

This paper delves deep into the understanding of climate change, what roles do corporations, organizations and NGOs play in tackling this disaster in India and their liability for it. It also talks about legal theories and cases holding corporations and organizations accountable for their environmental impact. It analyzes the recent lawsuits and regulatory developments and how climate change litigation has changed over the years, ensuring for a better tomorrow!

Keywords: 

Climate change, Corporate liability, Environment, Social and Governance (ESG), Corporate social responsibility (CSR), Sustainability and development.

Introduction:

Climate change refers to long term shifts and alterations in temperature and weather patterns, due to human activities such as burning fossil fuels (coal, oil, natural gas etc.), deforestation and industrial processes. These activities increase the concentration of greenhouse gases like carbon dioxide, methane in the Earth’s atmosphere, leading to global warming and other climatic changes.

The climate change performance index of India ranks 8th among other 63 countries which account for 92% of all GHG emissions in the year 2021. 

Adjusting practices, processes and infrastructure to minimize the damage caused by climate change such as creating policies for sustainable development, can be very effective in ensuring a peaceful environment

India on a national and international level, adopted strategies and initiatives like National Action plan on climate change (NAPCC), which address climate change through eight national missions, including the National Solar Mission and National Water Mission, G20

Summit, the Paris agreement, United Nations Framework Convention on Climate Change (UNFCCC), with an aim to limit global warming below 2 degrees Celsius above pre industrial levels. Countries are required to set and pursue their own climate goals. Through initiatives like these, India is set to meet 50% of its energy requirements from renewable sources, reducing carbon intensity by more than 45%.

Research Methodology: 

Descriptive, qualitative and quantitative method has been used in this paper.

Review of Literature:

Corporate liability for climate change has emerged as a critical area of legal scholarship and jurisprudence, reflecting growing global concerns over environmental degradation and corporate responsibility. The literature on this topic encompasses a diverse array of perspectives, including legal, ethical, and economic analyses.

Companies, Organizations, NGOs role in tackling Climate change:

Climate change has garnered significant attention, that it poses a serious challenge to sustainable development. It is not anymore within the voluntary conduct on the part of corporations, instead it’s a financial risk that they encounter, which imposes a duty on the board of directors of companies to address climate risk.

Section 166 of Companies Act, 2013, imposes a duty on the Director of a company that in good faith, to meet the objectives of the company, he shall act, for the benefit of its members as a whole, best interests of the employees, community and for the protection of the environment. They are required to establish ESG (Environment, Social, and Governance) in order to mitigate their negative environmental impact while making a profit.

Here are some prominent companies in India that are actively involved in addressing climate change through various initiatives, including renewable energy, sustainability practices, and carbon reduction:

Renewable Energy Companies

  1. ReNew Power – One of India’s largest renewable energy companies, focused on wind and solar energy. With the purpose “to create a carbon-free world by accelerating the clean energy transition”, ReNew develops, builds, owns, and operates utility-scale wind and solar energy projects that generate energy for government, commercial and industrial customers. It ensures to reduce greenhouse gas 
  2. Suzlon Energy – A global leader in wind energy, headquartered in India. Manufactures wind turbines and provides end-to-end wind energy solutions emissions.

Sustainability and Environmental Solutions Companies

  • Infosys – A global IT services company with a strong focus on sustainability. Achieved carbon neutrality and implements energy-efficient practices in its operations.
  • Hindustan Unilever Limited (HUL) – A consumer goods company with a focus on sustainability and reducing environmental impact. The company has discontinued usage of plastic wraps in some of its products. It has made its products with 100% bio-degradable actives in composition. It implements initiatives in water conservation, waste reduction, and sustainable sourcing.

Green Technology and Innovation Companies

  1. Gensol Group – Provides renewable energy consulting and project development services, one megawatt at a time. Focuses on solar energy solutions, including project design, engineering, and maintenance.
  2. Thermax Limited – A company specializing in energy and environmental solutions. With its integrated energy and environment solutions, is helping India unlock the energy potential of Bio-CNG, Green Hydrogen, coal gasification, waste-to-energy, and waste heat recovery.
  3. CleanMax Solar – A leading provider of solar power solutions for commercial and industrial clients. Develops rooftop and ground-mounted solar projects to reduce carbon footprints.

Along with this, Government of India has taken initiatives to mitigate climate change. Some of them are:

  1. Ministry of Environment, Forest and Climate Change (MoEFCC) – Central government ministry responsible for planning, promoting, coordinating, and overseeing the implementation of environmental and forestry policies and programs. Leads national efforts on climate change and implements international agreements like the Paris Agreement.
  2. Greenpeace India – exists because “this fragile earth deserves a voice”.

Part of the global Greenpeace network (NGO), focused on environmental campaigns such as protests against thermal power, nuclear power, coal and aluminium mining across India.

Over the years, due to the negative impact of the industrial practices of companies, situation of climate change in India has worsened. The Indian Judiciary System, keeping public health and safety, wildlife, and protection of environment in mind, laid down legal theories and frameworks making sure they are implemented.

  1. Public Trust Doctrine: is a legal principle, which establishes that natural resources are preserved for public use. Natural resources held in trust can include waters, wildlife, or land. The public is considered the owner of the resources, and the government protects and maintains these resources for the public’s use.

In M.C.Mehta vs Kamalnath 1996, also known as the SPAN Motel case, a PIL challenged the minister of environment, Mr Kamalnath [respondent] who allowed SPAN Motel Company to construct a hotel near the mouth of river Beas in Himachal Pradesh and also allowed the company to change the course of the river for the construction by blasting the river bed. The Supreme Court held that “the public trust is more like an order for the state to use the public property for public purposes”. It is the duty of the state to protect the environment, lakes and public heritage and it can be only abdicated in a rare case when it is inconsistent with the public trust. The court observed that the earth’s natural resources are the gift of nature; they should be protected and the values and laws must adhere to the environment. 

  1. The Precautionary Principle: Advocates for preventive action in the face of uncertainty to avoid serious or irreversible damage to the environment. In A.P. Pollution Control Board v. Prof. M.V. Nayudu (Retd.) 2001, the court held that widespread of toxic chemicals was a threat to ecological processes, therefore, ordering corporations to take necessary proactive steps towards the environment. To ensure these were implemented by corporations, the court held to establish experts and councils related to environment. 

Lafarge Umiam Mining Case (2011): The Supreme Court addressed the environmental clearance and compliance with forest laws for limestone mining by Lafarge in Meghalaya.

The case highlighted the need for stringent environmental clearances and adherence to this principle

  1. The Polluter Pays Principle: Establishes that the polluting party should bear the cost of managing pollution to prevent damage to human health or the environment. Defined in the 1996 case of Indian Council of Enviro-Legal Action vs Union of India, where a writ petition was filed by an environmentalist organization brings to light the woes of people living in the vicinity of chemical industrial plants in India. It highlights the disregard of entrepreneurs, taking advantage of the country’s need for industrialization and export earnings. 
  2. Environment Protection Act, 1986 – Provides a framework for the protection and improvement of the environment and empowers the government to regulate industrial activities to prevent and control pollution.
  3. National Green Tribunal (NGT) Act, 2010 – Establishes the NGT to handle cases related to environmental protection and conservation of forests and natural resources. – Empowers the tribunal to provide relief and compensation for environmental damage.

Analysis of recent lawsuits and regulatory developments:

Vedanta Resources Case (2013):- The Supreme Court ruled against Vedanta Resources’ bauxite mining project in Niyamgiri Hills, Odisha, citing environmental and tribal rights concerns. It reinforced the importance of environmental impact assessments and community consent.

Sterlite Copper Plant Case (2018): The Tamil Nadu Pollution Control Board ordered the closure of the Sterlite Copper plant in Thoothukudi due to violations of environmental regulations and public protests. The NGT initially allowed the reopening, but the Supreme Court stayed the NGT order, emphasizing compliance with environmental laws.

Indian courts are increasingly recognizing the importance of environmental protection, prevention of climate change and holding corporations accountable for their actions. The use of PILs (Public Interest Litigation) has enabled people to voice for environment concerns, health safety, and against industrial practices.

There has been a growing emphasis on corporate responsibility and sustainability, with integration of environmental risk management into corporate governance frameworks. To bring into light, CleanMa Solar’s CSR programme is enhancing environmental and natural capital; supporting rural development; promoting education including skill development; providing preventive healthcare, providing sanitation and drinking water; creating livelihoods for people. It also establishes ESG by becoming carbon neutral and to maximise efficient, sustainable resource use, building trust in the communities and robust governance through 100% transparency, accountability, diversity and safety.

Suggestions/ Conclusion: 

As climate change poses global challenges, the legal landscape is adapting through landmark cases, regulatory advancements, and interdisciplinary research. The literature highlights the significance of frameworks like the “polluter pays” principle and the precautionary principle, alongside the growing role of Environmental, Social, and Governance (ESG) criteria in corporate governance.

In India, while the work on this subject is still developing, there is significant potential for public interest litigation and judicial activism to shape the country’s approach to corporate climate accountability, for a safe and better future.

REFERENCES:

Cases:

  • M.C. Mehta v. Kamal Nath, AIR 1997 1 SCC 388
  • A.P. Pollution Control Board v. Prof. M.V. Nayudu (Retd.), AIR 1999 SCC 812
  • Indian Council of Enviro-Legal Action vs Union of India, AIR  1996 SCC (3) 212

Statutes:

  • Companies Act, 2013, § 166, Acts of Parliament, 2013 (India)

Online sources:

LAKSHMI ANAGHA,

3rd Year (SEMESTER 6),

PADALA RAMA REDDI LAW COLLEGE, HYD.