Climate Change: Justice BR Gavai says companies should be held liable; have moral responsibility

Supreme Court judge, Justice BR Gavai on Wednesday called for more accountability to be fixed on companies to ensure that they fulfil corporate social responsibility (CSR) commitments, especially when it comes to addressing climate change..He noted that CSR has mainly been considered a moral and normative responsibility that corporate entities can voluntarily pursue, and which is self-regulated. However, if there is risk of serious harm to the environment, animals or people due to corporate irresponsibility, it would be illogical to leave a corporations to regulate itself, he pointed out.Therefore, he called for a shift to bring about more legal accountability when it comes to CSR, so that companies are held more responsible if they do not perform their obligations. "Corporate Social Responsibility as a concept lacks legal accountability for non-performance of social obligations by companies. Therefore, there should be a shift in focus towards legally mandated accountability," Justice Gavai said..The judge was speaking as the representative of the Supreme Court of India at the panel session on Corporate Legal Responsibility and Climate Change at the Commonwealth Magistrates' and Judges' Association (CMJA) Annual Conference 2023 held in Cardiff, Wales..The address also saw Justice Gavai comment that climate change is one of the most urgent global challenges. Climate change necessitates collective action and a robust legal framework to address its impacts, the judge said. He added that such action must come from governments, cities, regions, businesses and investors as well as transnational entities.He further stressed that businesses today wielded significant power and influence over the global economy. As such, they have a moral responsibility to contribute to climate action, he said. He cited a report by the Corporate Climate Responsibility Monitor, which highlighted that many large transnational corporations have failed to meet their emission reduction targets, which again demonstrated the need for legal accountability when it comes to CSR.The report had indicated that regulators should not rely on consumer and shareholder pressure to drive corporate action.Rather, Justice Gavai noted that the report suggested that companies must be subject to intense scrutiny to confirm whether their pledges and claims are credible and that they should be made accountable in the case that they are not..As such, Justice Gavai called for States to take steps to make corporations more accountable through legal sanctions. "There is a dire need for states to take steps to make corporations more accountable through legal sanctions. Legal and moral responsibilities should be taken together as a bundle of obligations for businesses to effectively discharge their functions with accountability inevitably linked to moral responsibility," he said.