19BBL102

PUNIT KARAMCHANDANI

Evaluating the Contribution of CSR in Achieving UN’s Sustainable

Development Goals

Introduction

What is and/or should be the role of

corporate law in contributing to
sustainable development? This
question was not addressed in the
principles of company law when
they were first created. Due to the
increasing number of demands for
changes in the status quo, many
countries have introduced varying
changes in their company laws. Although these changes have been widely welcomed, the status
quo still remains in most jurisdictions.i

Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. This definition
highlights two key components: the satisfaction of basic or essential needs, and the limitations on
the ability to meet such needs. Although the global community and states are expected to play a
leading role in addressing the basic needs of society, what companies do and how they operate
should also have a bearing on these responsibilities.

As a result, for the purposes of this blog, the phrase "sustainable development" is interpreted in
terms of corporate obligations. Looking through the lenses of human rights and environmental
law, which are both important to the concept of sustainable development, could be one method to
discover business duties in this area. So, it is proposed that, as part of the sustainable
development goal, businesses should have a responsibility to protect and promote human/labor
rights and the environment, and that this obligation should be considered when conducting
business and making business decisions.ii

What are the 17 Sustainable Development Goals (SDGs)?

The 17 Sustainable Development Goals (SDGs) are the most comprehensive blueprint for a
better future ever devised by humanity: At the United Nations General Assembly in September
2015, 193 countries endorsed 17 goals and 169 sub-goals. The 2030 Agenda is named after the
fact that the goals must be accomplished by 2030.
The Sustainable Development Goals (SDGs) provide global guidelines for solving the world's
difficulties. It's about better safeguarding life's natural underpinnings and our planet for
everyone, everywhere, and for all generations, as well as preserving people's opportunities to live
in dignity and wealth. The 17 aims are divided into three categories: ecological, economic, and
social development.iii

Constructive response from the private sector

The commercial sector appears to

have eagerly embraced the SDGs:
many large corporations support the
objectives and incorporate them
into their sustainability plans, for
example, by identifying which
goals they (want) to contribute to
the most significantlyiv.
Organizations like the United
Nations Global Compact and the
World Business Council on
Sustainable Development
(WBCSD) focus on the SDGs by
hosting conferences and producing guide sheets. New information platforms and other efforts,
such as the Dutch SDG Charter and the American Business for 2030 project, have also been
established.

Involvement of companies to the SDGs

However, it is unclear exactly how businesses

should contribute to the SDGs. Simply considering
the role of businesses in supporting economic
growth and job creation is too simplistic an
approach, as it is widely known that commercial
activities can have negative consequences,
particularly for those in the world's most perilous
situations. It is so critical to analyze how business
is conducted in order to attain the SDGs.
Companies create jobs, but the working conditions of those jobs decide whether they contribute
to the SDGs in any meaningful way. Child labor and other types of exploitation, it goes without
saying, do not contribute to the SDGs in any way.v

Corporate Social Responsibility and Sustainable Development

CSR is an old notion that has been around for a long time. Section 135 of the Companies Act of
2013 gave CSR legal status in India. From the 2014 financial year onwards, Section 135 of the
Companies Act appliesvi. With reference to Section 135 of the Companies Act, this essay will
analyze the importance of CSR in achieving sustainable development.

Meaning Of Corporate Social Development

The term "corporate social responsibility" is broad and ambiguous, with many distinct
interpretations. In general, corporate social responsibility refers to the actions made by
businesses to benefit society. According to UNIDO, "corporate social responsibility (CSR) is a
management concept in which companies integrate social and environmental concerns into their
business operations and interactions with stakeholders." CSR is commonly understood as the
means by which a company achieves a balance of economic, environmental, and social
imperatives. From the criteria above, it is evident that CSR must consider the interests of all
stakeholders, not only the company's shareholders.vii

Concept of long-term development:

The Brundtland Commission defined sustainable development as “development that meets

current demands without jeopardizing future generations' ability to meet their own needs.”

In Vellore Citizen's Welfare Forum V Union of India and Others, the Supreme Court stated
that sustainable development is the principle of balancing ecological and development.
The court stressed sustainable development and held that development and the environment must
go hand in hand in the Indian council enviro. – Legal Action V Union of India case.
The Supreme Court of India ruled in N.D. Jayal and others v Union of India that the concept of
sustainable development should be recognized as an intrinsic aspect of "life" under Article 21.
By assuring long-term development, the public trust theory and precautionary principle can
flourish.

When looking at the various CSR initiatives listed in Schedule VII of the 2013 Act, it is evident
how each one can help the country accomplish the various Sustainable Development Goals
(SDGs).

1. Goal 1 of the SDGs, "No Poverty," Goal 2 of the SDGs, "Zero Hunger," and Goal 3 of
the SDGs, "Good Health and Well-Being," are all closely tied to CSR action aimed at
ending hunger, poverty, and malnutrition.
2. Similarly, CSR activities promoting education, particularly special education, will assist
the country in achieving SDG 4: Quality Education. Goal 8, which is about decent job
and economic prosperity, may be attained with adequate education. Goal 9 (Innovation in
Industry and Infrastructure) is also linked to education. Goal 11, i.e., sustainable cities
and communities, can be realized through creative infrastructure ideas and technologies.
3. Another key CSR action is supporting gender equality and women's empowerment,
which will assist the SDGs achieve Goal 5: Gender Equality.
4. Environmental sustainability, ecological balance, protection of flora and wildlife, animal
welfare, conservation of natural resources, and maintaining the quality of soil, air, and
water are all factors to consider. Goal 6, i.e., clean water and sanitation, Goal 7, i.e.,
affordable and clean energy, Goal 12, i.e., responsible consumption and production, and
Goal 13, i.e., minimize air pollution, can all be achieved through this activity, lowering
the need for climate action. Goal 14, which is to protect life below water, and Goal 15,
which is to protect life above land, would both benefit from the activity.

The inclusion of Goal 14 of the SDGs, which deals with ocean conservation and marine life,
as part of CSR is due to the fact that the definition of the term "environment" under Section
2(a) of the 1986 Environment (Protection) Act also includes "water."viii
Applicability of CSR:

The corporate social responsibility provision is applicable to companies with:

•Annual turnover of 1000 Crores or more or
•Net worth of 500 Crores or more or
• Net profit of 5 Crores or more

To devote 2% of their average profits over the past three years to corporate social responsibility.

India's Corporate Social Responsibility Reporting

The new statute mandates that the company's board of directors, after considering the CSR
committee's recommendations,
approve the company's CSR
policy and reveal its content in
their annual report, as well as
publish the contents on the
company's official websites, if
any. If the company fails to
spend the required amount, the
board should explain why in the
report.

Penal provision for not reporting the reasons:

Section 134(8) of the Act states that if the company

does not disclose the reasons in the Board's report,
the company will be fined a minimum of fifty
thousand rupees but up to twenty-five lakhs rupees,
and any officer of the company who is in default
will be sentenced to three years in prison or both. As
a result, CSR reporting is now required. The
Companies Act deals with voluntary spending as
part of corporate social responsibility. Reporting is
obligatory.
The role of corporate social responsibility (CSR) in achieving long-term sustainability

CSR is critical for achieving long-term sustainability.

Environmental protection is a social and moral duty that the company bears. Recently, rules and
regulations have been implemented to support this social and moral obligation. For their CSR
initiatives, several businesses are focused on environmental concerns ix. Environmental
challenges such as hazardous gases, waste generation, and water contamination are all being
addressed by Sony, Panasonic, and orchard hotels.

Merits

 Section 135x of the Companies Act 2013 deals with Corporate Social Responsibility in a
systematic or organized manner in India. 
 Section 135 of the Companies Act 2013 is enacted to give effect to numerous
commitments.
 Corporate social responsibility (CSR) promotes private sector involvement in societal
development.
 CSR benefits both the firm and society; it helps the company build its brand image while
also benefiting society, resulting in holistic growth.
 The Companies Act of 2013 encourages voluntary compliance through Section 135 of the
Act.
 There are no repercussions if the money isn't spent.

Demerits

 There is no penalty for not using the CSR funds. Only non-reporting of CSR expenditure
is punishable. As a result, the law lacks teeth.
 The CSR's object clause is not clearly defined.
 The Act makes no reference of a maximum restriction on CSR spending.
 Under the Income Tax Act, CSR expenses are not deductible.
 Corporate social responsibility (CSR) imposes significant costs on businesses.xi

Conclusion:

Section 135 of the Companies Act, which provides legal support for corporate social
responsibility, is a positive step toward holistic growth. Corporate social responsibility is critical
to achieving the objective of long-term development. It has some advantages, but it also has
some drawbacks. If the following proposals are implemented, corporate social responsibility will
be better implemented.
i
United nation. (2021). World Commission on Environment and Development, Our common Future. UN GA.
ii
Deva, S. (2010). Sustainable Development: What Role for the Company Law?. University Of Oslo Faculty Of
Law Legal Studies Research Paper Series, No. 2010(04), 25.
iii
https://www.17goalsmagazin.de/en/the-relevance-of-the-sustainable-development-goals-sdgs-for-companies/
iv
World Business Council for Sustainable Development (WBCSD). (2017). Exploring business communication on
the global goals. World Business Council for Sustainable Development (WBCSD).
v
https://media.business-humanrights.org/media/documents/files/Companies-contribution-to-the-SDGs.pdf
vi
Singh, A. (2014). Company Law.
vii
Krishna, N. (2008). Environmental Law in India. Butter worth Publication.
viii
https://www.latestlaws.com/articles/can-undertaking-corporate-social-responsibility-csr-in-india-help-achieve-the-
various-sustainable-development-goals-sdgs/
ix
Oxford University. (2003). “Sustainable developments a statistical analysis”,.
x
http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=17518
xi
http://www.legalservicesindia.com/article/1766/Corporate-Social-Responsibility-And-Sustainable-Development.html