LAW MANTRA

THINK BEYOND OTHERS

(National Monthly Journal, I.S.S.N 23216417)

Corporate Social Responsibility (CSR) to Corporate Environmental Responsibility (CER):An India Perspective

Abstract Corporate Social Responsibility (CSR), so to say a very complex, diversified and misunderstood concept these days.However, many cradle concepts have got their inception from CSR. These are corporate citizenship, corporate responsibility, corporate culture, corporate stewardship, corporate sustainability, corporate environmental responsibility (CER) and many more related terms. The contention of this paper is to study the evolutionary leap of CSR to CER over the years most specifically in Indian context. CER though has international link, is still on the verge of evolution. After reviewing an extensive body of literature it has been understood that CER has been perceived differently by the developing and developed countries. However the reason of difference is attributed to the challenge and inadequacy in the development and the living standard of the populace. The research paper is both doctrinal and non-doctrinal. The finding of the study suggests that the changing perspective of law and stakeholder pressure have mooted a strategic development for corporate responsibility. The mandatory provision of two percent CSR to address the ensuing challenges on health, sanitation, poverty and environment may bring a structural change on corporate accountability. This will help reduce the environmental challenges owing to corporate action. As the study deals with issues in Indian context, there is little scope to address global perspectivethrough comparative analysis. Besides the impact of mandatory provision of two percent CSR can only be judged in the coming days. Acknowledging these things as the limitation of the study, the authors leave the unresolved issues for the future research. CER in the course of evolution from CSR is emerging as a constructive instrument to attain corporate strategy to achieve responsible business. It also embraces stakeholders cravings, improves environmental health and accomplishes business sustainability. Key Words: CSR, CER, Corporate, Responsibility, Environment

1. Introduction Corporate Social Responsibility (CSR), so to say a very complex, diversified and misunderstood concept these days.1 However, many cradle concepts have got their inception from CSR. These are corporate citizenship, corporate responsibility, corporate culture, corporate stewardship, corporate sustainability, corporate environmental responsibility (CER) and many morerelated terms. The voluntary guidelines on Corporate Social Responsibility (CSR) and Sustainability issued for Central Public Sector Enterprises (CPSEs) in April 2013 speaks about the socio-economic growth of backward region, environmental safety, conservation of energy and green-technoly.2Over the years the recurring issues like inclusive growth, sustainable development, responsiveness of business and commitment to stakeholder interest with an aim to meet the overall good of business and society have been highlighted in the Corporate Social Responsibility Voluntary Guidelines 2009, the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 and the Companies Act, 2013. The contention of this paper is to study the evolutionary leap of CSR to CER over the years most specifically in Indian context. Corporate Environmental Responsibility (CER) is an inevitable role of corporate function and part of their duty for the restoration of environment, adoption of eco-friendly technology and green management of resources and welfare of the community3 who are directly or indirectly affected by the corporate action since its inception. Even though sustainable development is the purpose of business and it is strongly recommended at national and international spheres, still the desired goal has not been attained fully to make life sustainable and business responsive. Corporate Environmental Responsibility can be looked into as a tool of business commitment, diligence and remedial action in deep earnestness.This can be addressed within the purview of Corporate Social responsibility (CSR). 3. CSR in India India has a rich culture of charity for the social welfare and in this regard parting wealth for a noble cause of public good is as old as the foundation of the civilization. Thus in old time the merchants were revered with high esteem and this has been delineated in the Mahabharata and

BFM%3A978-3-642-28036-8%2F1.PDF, http://download.springer.com/static/pdf/347/bfm%253A978-3-64228036-8%252F1.pdf?auth66=1385714356_96c4bdd2d5256eec27d09088a02ca43f&ext=.pdf (last visited Nov 27, 2013) 2 REVISED_CSR_GUIDELINES.PDF, http://www.dpemou.nic.in/MOUFiles/Revised_CSR_Guidelines.pdf (last visited Jan 16, 2014) 3 MICROSOFT WORD - CER FINAL PAPER - FINAL VERSION.DOC - CERREPORT.PDF, http://www.pollutionprobe.org/old_files/Reports/cerreport.pdf (last visited Jul 17, 2013

the Arthashastra.4 During the pre-independence period the merchants used to give away certain portion of their wealth out of charity to the poverty- ridden people at the time of crisis. It was Mahatma Gandhi who in the early 20th century addressed the rich business community to be generous to the poor and be gracious to be trustees of their wealth. 5 After independence the CSR activity was monitored and controlled by the state. This approach was conceived by Jawaharlal Nehru. The debate on CSR has got two groups of critics i.e. the shareholders interest and stakeholders interest. When meeting the interest of shareholders gives the restricted meaning of CSR, the stakeholders interest on the other hand widens the scope of CSR. The history of CSR in India has been replete with an undulated path which we may segregate into four models
6

to attribute the evolutionary process of CSR. However one may

overlap with the other cutting across time. These models are cited below: I. Ethical Model: The ethical model pioneered by Mahatma Gandhi, highlights the voluntary participation of companies extending their charitable and philanthropic service in form of public welfare and social good.7 During the pre-independence period Gandhiji was the role model of the nation and his message was reckoned as the guiding principle of top executives of old companies which they practiced with high esteem. The business community discharged their role as frontier leaders by extending their helping hand to the poor and down trodden through service and financial assistance by all possible means. The spirit of charity and public benevolence encouraged them to be loyal and faithful to the impoverished section of the society. The social reformative actions which were mostly sought those days were abolition of un-touchability, promotion of indigenous culture through development of the villages economy in implementing handicraft industry and traditional trade practice.8 The ethical model brings certain overwhelming impact in the society. These things are trusteeship of corporate, educational improvement and training to the people at the bottom-line, creation of religious and social values and concern for environmental protection. The voluntary architectural role of business leaders and compassionate involvement for the greater cause of nation building can be conceived as need driven initiative and the expectation of millions of underprivileged people. However these social goodwill by corporate was confined to certain pockets in India and it could not reach the larger sections. The CSR benefits were meant for the external stakeholders
4

ICAI GUIDE ON CSR AUDIT, http://www.scribd.com/doc/130112854/ICAI-Guide-on-CSR-Audit (last visited Aug 21, 2013) 5 Id. 6 3_ARVIND_PP.PDF, http://www.mmbgims.com/docs/full_paper/3_Arvind_pp.pdf (last visited Aug 21, 2013) 7 SEEMA G. SHARMA, Corporate Social Responsibility in India: An Overview, 43 (4) THE INTERNATIONAL LAWER, 1515-1533 (2009). 8 Id.

but it had little scope for the internal stakeholders like the employees of the companies. Thus these grey areas were the concern which probably the statist model had to reach out after Indias independence. II. Statist Model: The statist model advocated by Jawaharlal Nehru after Indias independence looks for state proprietorship and legal pre-requisites of CSR. During this time the development of the state was seen through the development of public sector undertakings (PSUs).9 The government encouraged the PSUs but restricted the private enterprises raising high tax for which these companies suffered a big setback during these days. Just after independence India faced the challenges like poverty and unemployment. India being a freed nation adopted mixed economy embracing both capitalist and socialist pattern to meet its goal as a welfare state. The basic objective it aimed at attaining its future goal was through economic growth and social advancement. Thus PSUs were preferred to meet the financial urge subjected to legal norms on meeting the labor and environmental criterions. III. Liberal Model: Even though the statist model encouraged the PSUs to cater the socioeconomic need of the nation, the desired wish was not fulfilled due to restricted provision on private sector enterprises.
10

This can be a possible reason for which corporate wish for socio-

economic advancement and creation of business value. The liberal model propounded by Milton Friedman addresses CSR to take care and bring more profit to private owners or shareholders. This model sees the benefit of the businessmen by means of profit maximization and value creation. The business critics who believed the generation of wealth, the ultimate goal of corporate function in the society suggested companies to be responsible to their owners. They could see no relevance for corporate to do anything to the society other than obeying the laws made by the state. The liberal model induced more investment and financial gain to the corporate but restricted their social obligation to the stakeholders. Thus the monopolistic approach of the liberal model was criticized and the socio-environmental impact of corporate action was acknowledged to be a remedial action in the stakeholder model. IV. Stakeholder Model: The stakeholder model coined by R. Edward Freeman expands the scope of CSR and claims for meeting the interest and expectation of all stakeholders. The stakeholders are shareholders, employees, customer, trader, community people, NGO, government and the environment. The liberal model only covers the interest of corporate but stakeholder model includes all together. It includes both groups who have interest at the

10

Id. Id.

functioning of the enterprise. A stakeholder also means one who is either benefited or affected by the corporate action. The critics who support the stakeholder model argue that CSR is contracted by the liberal model, but it can be expanded by the stakeholder model. It is also argued that the shareholders contribute financial value but the stakeholders like employees, community people, government and educational institutions contribute intellectual, good will, development and knowledge values respectively. 11 By its nature and scope the stakeholder model is quite enlarged and it meets the varied interest of the society. These days it is widely accepted and researchers see corporate benefit in stakeholder engagement. In the above cited four models though nothing explicitly has been mentioned on corporate environmental responsibility still it can be construed that environmental responsibility has been more or less cemented in the stakeholder model. The environmental issue lies in addressing the wider challenges of corporate responsibility. This has been embedded in and out of the operational activity of the enterprise and the untoward consequences associated with it. In subsequent years internationally acknowledged reporting frameworks like UN Global Compact, Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP) were reckoned with great significance. These frameworks provide a platform for companies to disclose their sustainability practices and policies. The Global Compact was initiated by the former U.N. Secretary General Kofi Anon. It is the largest initiative where nearly eight thousand companies from 140 countries of the world participate.12 The most inspiring thing of the Global Compact is innovation, creative solutions and good practices among the participants. The environmental principles of the Global Compact can be seen as a preface to understand the Corporate Environmental Responsibility.Principles7, 8 and 9 of the Global Compact highlight on precautionary measure to meet the environmental challenges, development of greater responsibility and promotion of environmentally friendly technologies.13 Global Reporting Initiative (GRI) was established to improve sustainability reporting practices which address the issues like ecological footprint reporting, environmental social governance (ESG) reporting, triple bottom line (TBL) reporting, and corporate social responsibility (CSR) reporting. The Carbon Disclosure Project
11 12

Id. GLOBAL_CORPORATE_SUSTAINABILITY_REPORT2013.PDF, http://www.unglobalcompact.org/docs/about_the_gc/Global_Corporate_Sustainability_Report2013.pdf (last visited Jan 16, 2014) 13 Principles 7, 8 and 9 of the Global Compact read: Businesses should support a precautionary approach to environmental challenges, undertake initiatives to promote greater environmental responsibility and encourage the development and diffusion of environmentally friendly technologies.

(CDP) is a United Kingdom based organization which works for the discloser of greenhouse gas emissions of major corporations. These international instruments can be conceived as potent forces for implementation of new policies and guidelines at national level. 3. CSR: Legislative Approach 3.1 The Companies Act, 2013 India is the first country in the world which has made CSR mandatory in the Companies Act, 2013. This may rock the mind of the business critics, administrators and legislators worldwide to acknowledge the importance of CSR and its relative significance in becoming stipulated under legal connotation in the inhibiting days to come. However cutting across time and distance it has been felt globally that poverty and hunger and environmental challenges have ruined the pride of human to be called humane because duty and responsibility are not on the line of trust. The mandatory provision of CSR can be seen as a trust building measure which can feed and sustain the most impoverished section of the society whose life has been clogged by the threat of poor living condition and poisoned environment. Therefore the CSR provision in the Companies Act, 2013 can be seen as the immediate and never failing responsibility of the corporate to meet their responsive duty to the society. As per Section 135 (1) of Companies Act, 2013, Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.14 Similarly Section 135 (5) prescribes for the formation of a CSR Committee which the Board of Directors in its report under Section 134(3) should mention about the composition of the Corporate Social Responsibility Committee. 15 Section 135(3) has given power to the CSR Committee and as per the provision it shall formulate and recommend a Corporate Social Responsibility Policy, recommend the amount of expenditure to be incurred in such activities and monitor the CSR Policy of the company from time to time and inform it to the Board. Section 134(3) (o) speaks about the details of the annual policy development and implementation by the company on corporate social responsibility. 16

14

2434GI1.P65 - E_27_2013_425.PDF, http://egazette.nic.in/WriteReadData/2013/E_27_2013_425.pdf (last visited Sep 17, 2013) 15 Id. 16 Id.

The CSR Committee shall formulate and recommend to the Board a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of Companies Act, 2013. Schedule VII talks about the activities which may be included by the companies in their CSR Policies and out of it one such activity is ensuring environmental sustainability. 17 This provision looks to be a safe road to facilitate CER in the coming days. The CSR Committee will have to ensure that the companies coming under Section 135 (1) shall spend, in every financial year, at least two per cent of the average net profits made during the three immediately preceding years [ Section 135 (5)] towards CSR activities. Under clause (o) of sub-section (3) of Section 134 of the Act, the companies specified in Section 135 (1), the Board will have to give reasons in its report if they fail to spend the requisite amount on Corporate Social Responsibility Policy. 18
Table 1: Indias Top Ten Companies: Based on Net Sales for the Financial Year 2012 and their Spending on CSR (Rs. Crore) Serial Number 1. 2. 3. Company Indian Oil Corporation Reliance Industries Bharat Petroleum Corporation Hindustan Petroleum Corporation Tata Motors Oil and Natural Gas Corporation State Bank of India Tata Steel PNB Gilts Hindalco Industries Total Source: http://164.100.47.134/intranet/CorporateSociaResponsbility.pdf Revenue 442,459 368,571 223,315 Average Profit After Tax(PAT) 7,783 21,138 1,438 Actual Spending 83 288 8 2% of PAT 156 423 29

4.

195,891

1,118

27

22

5. 6. 7. 8. 9. 10.

170,678 151,121 147,197 135,976 104,628 82,549

8,437 23,660 13,056 3,895 29 3,597

15 121 71 146 NA 28 787

169 473 261 78 1 72 1684

The information figured out in table-1, shows the CSR expenditure of top ten Indian companies in 2012. The CSR expenditure of these companies calculated on the basis of total Profit After Tax (PAT) is Rs 787 crore, when the 2% expenditure on PAT is estimated as Rs 1684 crore.19 Except Hindustan Petroleum Corporation and Tata Steel, the CSR expenditure of the rest
17 18

Id. Id. 19 http://164.100.47.134/intranet/CorporateSociaResponsbility.pdf (last visited Dec 23, 2013)

companies is far less to meet the 2% limit. Indias top companies ranked 1-100 on Net Sales for the Financial Year 2012 and their spending on CSR by PAT is estimated as Rs 1765 crore and 2% target is Rs 5611 crore.20 Therefore Section 135(5) of the Companies Act, 2013 will definitely create ample scope in terms of financial allocation and more expense in CSR. The directors responsiveness to stakeholders and environment has been cited in Section 166(2) of the Companies Act, 2013.21The stakeholders of a company are employees, the shareholders, the community people whose interest greatly rests on the environmental protection. The crucial thing which the directors should look into is to build trust relation with all the members associated with the company and work for green environment.In this way, they can work for the good interest of the company. The Companies Act, 2013 will facilitate the environmental management expressly read in concurrence with the corporate environmental responsibility requirement issued by the Ministry of Environment and Forests (MoEF). The MoEF recommends a Corporate

Environmental Policy (CEP) as a pre-requisite to obtaining an Environmental Clearance (EC). For any industrial and construction operation an EC is quite necessary. Thus CEP and EC though legal mandates yet these intricacies can be sorted out if CER visions are duly embraced by any company which comes under the purview of mandatory CSR. 3.2 CSR Administrative Approach 3.2.1 CSR Voluntary Guideline, 2009 The preamble of CSR Voluntary Guideline, 2009 expressly states, It is recognized the world over that integrating social, environmental and ethical responsibilities into the governance of businesses ensures their long term success, competitiveness and sustainability. This approach also reaffirms the view that businesses are an integral part of society, and have a critical and active role to play in the sustenance and improvement of healthy ecosystems, in fostering social inclusiveness and equity, and in upholding the essentials of ethical practices and good governance. 22 3.2.1.1 Fundamental Principle

20 21

Id. 2434GI1.P65 - E_27_2013, supra note 22. 22 INSIDE MATTER IIND - CSR_VOLUNTARY_GUIDELINES_24 DEC2009.PDF, http://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf (last visited Aug 21, 2013)

Every corporate unit would frame a CSR policy to monitor its strategic planning on CSR with a systematic approach so that it will be a vital part of the total business policy along with its business goals.23 3.2.1.2 Core Elements24 1. Care for all Stakeholders 2. Ethical functioning 3. Respect for Workers' Rights and Welfare 4. Respect for Human Rights 5. Respect for Environment 6. Activities for Social and Inclusive Development 3.2.1.3 Environmental Measures to be taken by the Companies25

a. To check and prevent pollution b. To recycle, manage and reduce waste c. To manage natural resources in a sustainable manner d. To ensure optimum use of resources like land and water e. To pre-emptively respond to the challenges of climate change by adopting cleaner production methods f. To endorse efficient use of energy and environment friendly technologies.

3.2.2 Chhattisgarh: CSR Spending in CM Development Fund

The policy notified on May 3, 2013, in the Gazette of Chhattisgarh directs public/private companies having net profits (in the preceding year) of less than Rs 500 crore to contribute 3% of their annual profits towards CSR to the Chief Minister Community Development Fund (CMCDF).26 In case of public/private enterprises having net profits above Rs. 500 crore, the CSR expense will be 2% of their annual profits with a minimum inception of Rs. 15 crore. In the Gazette notification, it is further stated that such amount will be deposited at Chhattisgarh State Industrial Development Corporation (CSIDC) in the operated fund mandatorily through
23 24

Id. Id. 25 Id. 26 CHHATTISGARH WANTS ALL CSR SPENDING TO GO TO CM DEVELOPMENT FUND - THE HINDU, http://www.thehindu.com/news/national/other-states/chhattisgarh-wants-all-csr-spending-to-go-to-cmdevelopment-fund/article5131752.ece (last visited Sep 22, 2013)

cheque or other mode (not cash) by 30th September each year. This will be issued by CSIDC to the concerned district every year as per procedure laid down. 27

3.2.2.1 Penal Provision on Non-Compliance

If the industrial units fail to deposit the CSR amount in the Chief Minister Community Development Fund (CMCDF) as per the Gazette notification than the grant/facilities being provided by the administration can be withdrawn. However, an opportunity will be given to them for hearing before taking such action.28

3.2.2.2 Criticism

This CSR Policy notified in the Gazette by the Chhattisgarh Government is no doubt a bold initiative but it may not supersede the provisions laid down in the Companies Act, 2013. The companies which will come under the purview of CSR [mentioned in Section 135 (1) of the Act] will spend 2 percent CSR mandated in the Section 135(5) of the Companies Act, 2013. The CSR activities are mentioned in the Schedule VII of the Companies Act, 2013. 29One such CSR activity mentioned in the Schedule is, contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women. 30However it is directory in nature and it cannot be mandated out rightly. Therefore it appears unlike for the Chhattisgarh Government to mandate companies to deposit the CSR amount in the CSIDC. It is obvious that the central legislation of the Companies Act, 2013 will always prevail over the CSR policy of the Chhattisgarh Government on CSR expenditure.

4. CER in India 4.1 CER: Administrative Approach 5.1.1 National Voluntary Guidelines on Corporate Environmental Responsibility (CER)

27 28

Id. Id. 29 2434GI1.P65 - E_27_2013_425.PDF, supra note 22. 30 CHHATTISGARH WANTS ALL CSR SPENDING TO GO TO CM DEVELOPMENT FUND, supra note 34.

National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 proposes on responsible business because business and responsibility are mutually inclusive, intrinsic and inseparable bonding of proofs to every action of business. Both are closely linked with society and natural environment. The scope of CSR (affirmed by the Guidelines) is limited and inadequate to patch the gap of responsibility. Therefore the grey area of business needs to be addressed with greater responsibility. It can be presumed that the voluntary guidelines of 2011 have been issued to extend and fine tune the Corporate Social Responsibility Voluntary Guidelines of 2009 . In the preface note of the 2011 guidelines, D.K. Mittal (Secretary Ministry of Corporate Affairs) has written, The guidelines emphasize that responsible businesses alone will be able to help India meet its ambitious goal of inclusive and sustainable all round development, while becoming a powerful global economy by 2020. 31 5.1.2 Conceiving points32 Business is not confined to its boundary and its proximity is entangled with the value chain like vendors, distributors, partners and other collaborators All Principles of the guidelines have equal importance and inseparable bonding Business needs to embrace the triple bottom-line approach and its financial performance should be in line with the expectations of society, the environment and the many stakeholders related with sustainable objective Business should take the mettle and self-regulate itself for sustainable and responsible business practice. The 'Apply-or-Explain' principle is the fundamental basis of these Guidelines

Table 2: National (Indian) Voluntary Guidelines on Corporate Environmental Responsibility (CER) Serial Number 1. 2. Subject Principle Revenue access growth and market Environmental Responsibility of Business Protection of the Environment Preference of Business partner, on the basis of Sustainability oriented buyers to deal with the organization Lower operating costs in the long term and less danger of externalities emerging as liabilities. Attractive to investors, banks and financial markets

3. 4.

Cost savings and productivity Access to capital

31

BOOKLET PRINT 6711 - NATIONAL_VOLUNTARY_GUIDELINES.PDF, http://www.nfcgindia.org/pdf/National_Voluntary_Guidelines.pdf (last visited Jul 26, 2013) 32 Id.

5. 6. 7.

Risk management/ license to operate Human capital Brand value/ Reputation

Positively seen by communities, NGOs, local governments, regulators for lower risk of non-compliance Talent is drawn to the firm due to its commitment to the wellbeing of the planet. Positively seen by customers, regulators, media

Source: BOOKLET PRINT 6711 - NATIONAL_VOLUNTARY_GUIDELINES.PDF, http://www.nfcgindia.org/pdf/National_Voluntary_Guidelines.pdf (last visited Jul 26, 2013)

5.1.3 Environmental responsive elements of business33 The principle-6 of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 stresses on environmental responsibility as an essential component of sustainable economic growth. It looks into the welfare of society because environmental concerns are linked with the local, regional and global issues. It improves business responsiveness so that it will be liable to all the environmental impacts of its operation, product and service while endeavoring in an environment responsive manner. 6.2 Terms of References for Various Projects on CER The Director, Ministry of Environment and Forests (MOEF), Government of India issued a notice on 18th May 2012 for various projects regarding the Term of References (TORs) to know the undertaking details of EIA study on CER.34 These points are cited below: Whether the company has a systematic Environment Policy duly approved by its Board of Directors? Whether the Environment Policy prescribes for standard operating process/procedures to bring into focus any infringement / deviation / violation of the environmental or forest norms / conditions? It is required to mention the hierarchical system or administrative order of the company to deal with the environmental issues and to ensure compliance with the EC conditions? Whether the company has a system of reporting of non-compliances / violations of environmental norms to the Board of Directors of the company and / or shareholders or

33 34

Id. http://moef.nic.in/downloads/public-information/notif-18052012-1.pdf (last visited Aug

NOTIF-18052012-1.PDF,

22, 2013)

stakeholders at large? This reporting mechanism should be mentioned in detail in the EIA report. The TORs outlines reflect MOEFs close insight on environmental challenges due to industrial operation related threat and the vulnerable predicament during the process and the pressure built on various stakeholders for such occurrence. It may create good scope for CER taking the fact that circumstantial pressure has been evolved as a possible reality these days. Conclusion CER is chiefly sourced from stakeholder model. It can be judged as a positive attribute to the eco-foundation of earth both in its application and improvement mechanism. Responsiveness on environmental sustainability is no longer a lip service among corporate thinking but a business necessity.The finding of the study suggests that the changing perspective of law and stakeholder pressure have mooted a strategic development for corporate responsibility. The obligatory provision of two percent CSR to address the ensuing challenges on health, sanitation, poverty and environment may bring a structural change on corporate accountability. As the study deals with issues in Indian context, there is little scope to address global perspective through comparative analysis. Besides the impact of mandatory provision of two percent CSR can only be judged in the coming days. Acknowledging these things as the limitation of the study, the authors leave the unresolved issues for the future research. CER issues have been well recognized internationally and in Indian context the environmental responsibility of corporate has been addressed in the Companies Act, 2013 and in the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011. These provisions will help reduce the environmental challenges owing to corporate action. The administrative approach for clarification regarding the Term of References (TORs) of the enterprises to know the undertaking details of EIA is also a preventive tool to promote CER. Thus CER in the course of evolution from CSR is emerging as a constructive instrument to attain corporate strategy to achieve responsible business. It also embraces stakeholders cravings, improves environmental health and accomplishes business sustainability. By Himanshu Sekhar Nayak & Uday Shankar & Dipa Dube, Rajiv Gandhi School of Intellectual Property law, Indian Institute of Technology Kharagpur, West Bengal, India