Beyond The Cheque Book - Analysing The “Expenditure-Only” Fallacy Of CSR Under Section 135 Of The Companies Act And The Rise Of Statutory Greenwashing In India
- IJLLR Journal
- May 14
- 1 min read
Bavya. B, Dr. Aman Kumar Sharma & Mahesh Sharma, Symbiosis Law School, Pune (SLS-P), Symbiosis Centre for Advanced Legal Studies and Research, Pune, India (SCALSAR), Symbiosis International (Deemed University), Pune, India (SIU)
ABSTRACT
The compulsory Corporate Social Responsibility (CSR) regime in India by Section 135 of the Companies Act 2013 is being hailed around the world as an innovative statutory intervention. However, this article claims that the framework upholds a structural paradox in that it has conditioned corporate social responsibility but virtually and solely on financial spending as opposed to operational responsibility, the law has institutionalised what the authors call the expenditure-only fallacy. With this type of design, a corporation can meet its legal CSR requirements by donating to the unrelated charitable programs, including schools, sanitation, or rural development and at the same time continue running industries that do not comply with environmental norms and community rights. The paper discusses statutory framework of Section 135 and Schedule VII, identifies the flaw in the design that allows statutory greenwashing, evaluates judicial disposition of CSR compliance in environmental liability cases, and determining the effectiveness of penalty provisions as deterrents. The article uses comparative models such as the French Duty of Vigilance Law, the German Supply Chain Due Diligence Act and the EU Corporate Sustainability Due Diligence Directive to suggest a normative reform model that requires corporate legitimacy to be based on demonstrated Human Rights Due Diligence, turning CSR into an operational rather than a philanthropic accounting concept.
Keywords: Corporate Social Responsibility, Section 135, Companies Act2013, greenwashing, Human Rights Due Diligence, ScheduleVII, environmental constitutionalism, corporate accountability, India
