Environmental law and corporate governance- What are the obligations of companies towards the environment ?




COURSE:            BA.LLB (HONS) IIIRD YEAR        

BRANCH:        LAW



“If conservation of natural resources goes wrong, nothing else will go right”. Industrialization main focus are economic development, apart from this it also create problems in environmental realm. Thus today’s economics were majorly dependence on companies along with major questions in damaging the environment by depleting natural resources. Consequently, the legislature has made several attempts to ensure the companies behavior to control usage environmental resources. In this article we are covering the legislation under environmental law, how companies create problems for the natural resources, how they were punished under environmental law and what are the responsibilities for companies.


With the growth of globalization there is the growth of global warming. They were numerous companies- like national, multinational, and transnational. There growth rate maximized as the time passes. This creates a new regulations for those massive firms whose budget will be exceed than the tiny developing countries. To control the crime rate of the companies we must prove their crimes with sufficient proves. When the proof were being submitted the major factor must be mens rea , with this the defense can provide a reasonable factors against the globalized companies.


The Environment (Protection) Act, 1986

The legislature enacted the Environment (Protection) Act, 1986 under Article 253 of the Constitution of India after the Bhopal gas tragedy. This was done to implement the decisions that were taken in the United Nations (UN) Conference on the Human Environment, 1972 regarding protection and betterment of the environment and to suggest ways to prevent hazards to all living organisms.

Corporate Social Responsibility (CSR)

The environmental aspect of CSR is the duty of the corporate to cover the environmental effects of the company\’s products operations and facilities; remove waste and emissions; increase the productivity and efficiency of its resources, and decrease practices that may adversely affect the enjoyment of resources by future generations.

Environmental Clearance

There are certain rules that have been framed in pursuance of the Environment (Protection) Act, 1986, in order to ensure environmental protection, these rules are:

Environmental Impact Assessment

Since every human activity affects the environment, it is important to synchronize the activities imperative for development with the ever increasing environmental concerns. Environmental Impact Assessment (EIA) is a tool that ensures the same. It began in India in the late 1970’s and aims to detect the environmental problems that are likely to arise out of a project that is proposed and tries to settle those problems in the initial stages itself, thereby preventing future liabilities and expensive alterations in project design.

The Wild Life (Protection) Act, 1972

This act provides for protection of wild animals and lays down a special provision for offences committed by companies, that makes the companies vicariously liable for the offences committed by the people who are responsible for its functioning.

The Forest (Conservation) Act, 1980

These guidelines were enacted with the aim of conserving the country’s forests. It restricts and regulates deforestation without the approval of the central government and lays down the penalty for projects that have not obtained forest clearance.

The Biological Diversity Act, 2002

Section 3 of the aforementioned act prohibits people from obtaining any biological resource without the approval of national biodiversity authority. Such persons include a body corporate, association or organization either not incorporated or registered in India; or incorporated or registered in India having any non-Indian participation in its share capital or management.

Bio-Medical Waste (Management and Handling) Rules, 1998

These rules provide for management of biomedical waste. They “apply to all persons who generate, receive, collect, transport, store, treat, dispose, or handle bio-medical waste in any form”There are provisions making it mandatory such institutions to submit an annual report and lay down guidelines in case there is an accident.

Chemical Accidents (Emergency Planning, Preparedness, and Response) Rules,1996

These rules have also been framed for management and handling of biomedical waste and provide for setting up of crises groups at Central, State and District levels, to provide expert guidance in cases of accidents. Further, there are provisions that make it possible for the public to obtain information about potential accidents at an industrial site.

Manufacture, Storage, and Import of Hazardous Chemical Rules, 1989

According to the said rules, the occupier who has control of a said industrial activity is responsible for providing evidence showing that he has identified the major accidents and taken adequate steps to prevent such accidents and that he has provided the workers with information and training for their safety.

Hazardous Wastes (Management and Handling) Rules, 1989

These rules lay down the responsibility of the occupier while handling hazardous wastes. It entails that the occupier generating hazardous wastes in quantities equal to or exceeding the given limits shall take all practical steps to ensure proper handling and disposal of such wastes without any adverse effects. The said occupier is also supposed to maintain records regarding the same and is obliged to report any accident that occurs in the course of events.


When a company commits a offence under section 40 of the AIR act 1981, whoever were directly in charge of the company and responsible towards the company were told and deemed to be guilty of the crimes. Even if he/ she said I am not responsible for the crimes or the crime was done by without my knowledge, will not render him/ her from punishment under this act. If the crimes conducted by the neglect by any authorized or unauthorized person of the company were deemed to be liable under sub-section (1). 


Normally our regular working places have huge impact on the usage of environmental resources.

  • The usage of power supply at companies is covered by 24/7 hours even if there is no usage of power supply.
  • Heating and air conditioning systems pump greenhouse gas emissions from offices into the atmosphere and use up vast amounts of electricity. Many buildings aren’t designated to include energy efficient systems or technology to reduce the amount of heat and air conditioning they use.
  • Many buildings have built from materials that don’t come from renewable sources.
  • Offices consumes vast number of papers even with more offices recycling paper and a large amount of waste still goes to landfill sites or incinerators.
  • Rush- hours of traffic jams create vast numbers of air pollution in the atmosphere.

According to the U.S environmental protection agency, industrial and commercial energy use (from such sources as electricity use, product transportation, industrial processes, burning fossil fuels to power boilers and produce stream and using gasoline to power vehicles) accounts for nearby 30percent of total U.S greenhouse gas emissions.



 Panasonic, a Japanese electronics corporation was judged by fortune in 2014 to have the highest perception gap between its actions and what people believed has done. Which substantially affected the energy savings production but soon they adopted the recycling oriented manufacturing as a part of company’s effort. Panasonic’s new North American headquarters is one of the coolest ways it’s doing walk. The company, which was previously based on suburban Secaucus, New Jersey, relocated to a premium location in downtown Newark in 2013. Later the initiative was praised as a critical step towards revitalizing the struggling city, but it also served Panasonics sustainability goals. 

At Penn station, a key transit node are placed for both local and regional transit, the corporation developed a new LEED-certificate skyscraper (gold certified exteriors, platinum-certified interiors). Because of this connectivity and transit accessibility, the number of workers who commute to work solely by automobile has decreased by nearly half. According to Panasonic’s vice president of corporate relations, the action has taken 500 cars off the road every day.

By the same way many different types companies contributed different ideas and innovation to protect and reduce the usage of environmental resources like WALMART, APPLE, UNILEVER, BIOGEN., etc.


These conclude that the environment faces a huge crisis because of corporate companies. Also today’s companies must work according to the revolution standard in which they must give importance to the companies and industries and at the last they can give importance to the environment and surroundings. So The legislation have put a check on the companies and made it mandatory for them to abide by certain guidelines, which is the need of the hour, considering the importance of both – industrialization and preservation of environment.


  • Varitika Tiwari,- Impact Of Environmental Law On Cooperate Governance.


  • Vanya Verma- Analyzing Environmental Law On The Basis Of Vicarious And Corporate Liability.


  • Dummies (A Willey Brand)- How Business Affect The Environment.


  • Rohit Sharma – Corporate Social Responsibility And Environmental Protection.


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