The legal issue of corporations' responsibility for their carbon emissions and environmental impact has become increasingly urgent as climate change threatens ecosystems, economies, and public health. In India, the increasing industrialisation has led to a rise in carbon emissions, making it crucial to hold corporations responsible for their impact on the environment. This article explores the present legal system in India concerning corporate responsibility for environmental damage, with a specific emphasis on carbon emissions, legal hurdles, and recent changes in the law.

Comprehending Corporate Responsibility for Environmental Damage in India

The main laws regulating corporate responsibility for environmental damage in India are the Environment Protection Act, 1986 (EPA) and the Air (Prevention and Control of Pollution) Act, 1981. These regulations establish guidelines for controlling pollution and enforce consequences on companies for harming the environment, such as emitting carbon. The EPA gives the government the authority to limit industrial activities that harm the environment, while the Air Act focuses on emissions from industries.

Nevertheless, traditional environmental regulations are frequently insufficient in tackling the larger impacts of carbon emissions due to the complexity of climate change. Lately, there has been a movement encouraging companies to incorporate Environmental, Social, and Governance (ESG) criteria in their operations. Regulators, courts, and the public are paying more attention to companies' environmental practices, such as minimizing carbon footprints and addressing climate impact.

Legal Frameworks for Corporate Accountability in India

The Environment Protection Act, 1986 (EPA)
Under the EPA, corporations that exceed prescribed emission levels or release harmful pollutants into the environment can face fines, operational restrictions, and even shutdowns. For instance, Section 5 of the EPA empowers authorities to issue orders to any industry whose activities are hazardous to the environment, including carbon emissions.

National Green Tribunal (NGT)
Established under the National Green Tribunal Act, 2010, the NGT is a specialized body that handles cases related to environmental protection. The NGT has adjudicated several high-profile cases, holding corporations accountable for their environmental harm. In Sterlite Industries (India) Ltd. v. Tamil Nadu Pollution Control Board (2018), the NGT ordered the closure of Sterlite's copper smelting plant due to its high levels of pollution, underscoring the tribunal's commitment to environmental protection.

The NGT has also passed orders in recent years that require companies to compensate for environmental degradation, further reinforcing corporate accountability.

Corporate Social Responsibility (CSR) Requirements:
According to the Companies Act of 2013 in India, some companies are required to set aside part of their profits for CSR initiatives, such as promoting environmental sustainability. Companies exceeding a certain threshold in net worth, turnover, or net profit must adhere to Section 135 of the Act by engaging in CSR initiatives, such as those targeting climate change. This law indirectly encourages companies to take responsibility in the fight against climate change.

Evolving Liability Under the Public Trust Doctrine
In landmark cases like M.C. Mehta v. Kamal Nath (1997), the Supreme Court of India established the Public Trust Doctrine, where natural resources are considered assets held in trust by the state for public use. This doctrine is increasingly used to hold corporations accountable for damaging natural resources that contribute to environmental harm and climate change.

Recent Developments and Legal Case Law

• Vardhaman Kaushik v. Union of India (2015): In this NGT case, stringent regulations were imposed on industries in Delhi NCR for their contributions to air pollution. The court highlighted the urgent need for industries to curb emissions, linking industrial emissions directly to the health and well-being of citizens.
• Laxmi Narain Modi v. Union of India (2020):
  • The NGT stressed the importance of implementing tougher pollution control regulations for industries located in regions designated as "critically polluted" according to the Comprehensive Environmental Pollution Index (CEPI).
  • The tribunal mandated companies in these regions to follow strict emission regulations, connecting corporate responsibility to harm to the environment and global warming.
• Tata Power Sustainability Report (2021): Tata Power, a prominent utility firm, released its Sustainability Report outlining its efforts to lower carbon emissions in adherence to the National Action Plan on Climate Change (NAPCC). The report details the company's initiatives to switch to renewable energy sources, demonstrating how businesses are choosing to decrease their environmental effects.

Challenges in Enforcing Corporate Liability

• Proving Causation: Establishing a direct link between a specific corporation's emissions and climate harm is difficult. Unlike local pollution, climate change is a cumulative and global issue, making causation hard to prove.
• Jurisdictional Limitations: With environmental harm and climate change often crossing borders, regulating corporate liability becomes complex. Although India has regulatory bodies like the NGT, enforcement is limited within national boundaries.
• Corporate Veil: Many corporations operate through subsidiaries, which complicates liability. Piercing the corporate veil to hold parent companies accountable for the actions of subsidiaries has been a contentious legal issue, limiting the reach of environmental accountability.

Future Directions and Legal Reforms:

• Enhanced Disclosure Requirements: SEBI's latest guidelines on Business Responsibility and Sustainability Reporting (BRSR) for listed companies promote transparency in reporting carbon emissions and environmental impact. Requiring all big companies to make such disclosures could promote increased accountability.
• Carbon Pricing Mechanisms: Introducing a carbon tax or an emission trading system (ETS) would place a direct financial cost on companies for their carbon emissions, incentivizing emission reductions.
• Restraining Orders: Injunctions can be requested against companies that pollute in order to decrease CO2 emissions and halt practices that harm the climate.
• Public Interest Litigation (PIL): PILs have played a crucial role in influencing the development of India's environmental legal system. Increasing the utilization of Public Interest Litigations to ensure that companies are held responsible for climate-related damage can improve the supervision of corporate behaviors by the judiciary.

Conclusion
India's legal system regarding corporate responsibility for climate change is changing, as companies are being held more responsible for environmental damage by courts and regulators. Nevertheless, there are still major hurdles to overcome, especially when it comes to demonstrating causation and ensuring accountability across borders. India can create a strong framework that is in line with global climate goals by improving regulations, increasing transparency, and advocating for carbon pricing mechanisms. In a nation with a fragile ecosystem, corporate accountability is crucial for not just sustainable development but also for guaranteeing a cleaner environment for future descendants.

Nevertheless, in order for the framework to be genuinely successful, it is essential to have stronger enforcement and more precise regulations on carbon emissions. According to the Environment Protection Act of 1986, companies that exceed emission limits can face consequences such as large fines, incarceration of those in charge, and possible shutdown of the offending activities. The NGT has played a key role in punishing companies for breaking environmental laws, as demonstrated in instances such as the Sterlite Industries case in 2018, where fines and orders to cease operations were enforced.

Even with these strategies in place, it continues to be difficult to enforce consequences for carbon emissions because of problems with linking cause and effect and the legal protection that parent companies have from the actions of their subsidiaries. The current laws should be strengthened to incorporate measures that make companies financially responsible for the harm caused by their emissions, like implementing carbon taxes or the principle of making polluters pay for their actions. Moreover, the scope of mandatory disclosure regulations, such as those outlined in SEBI's Business Responsibility and Sustainability Reporting (BRSR) framework, may be broadened to enhance transparency on emissions and climate influence.

In order to ensure true accountability, the government should also think about implementing more severe consequences for not following environmental regulations, such as increased fines and temporary license suspensions for those who repeatedly break the rules. India can enhance corporate accountability for climate-related damages more effectively by increasing penalties, implementing advanced regulatory measures, and making sure that companies bear the cost of their environmental impact. This method will not just guarantee improved adherence but also bring India's corporate sector in line with international sustainability objectives.

References:

1. Environment Protection Act, 1986
2. Companies Act, 2013 – Section 135 (Corporate Social Responsibility)
3. Sterlite Industries (India) Ltd. v. Tamil Nadu Pollution Control Board (2018)
4. Vardhaman Kaushik v. Union of India (2015)
5. SEBI Business Responsibility and Sustainability Reporting (BRSR) Guidelines, 2021