ESG Foundations in Indian Constitution

The Constitution of India, a beacon of democracy and social justice, has enshrined within its framework the principles of environmental, social, and governance (ESG) responsibility. While the term ESG pertains to a framework that is used by businesses to identify and mitigate risks relating to environment, social and governance factors; and such terminology has not been explicitly used in the drafting of the Constitution, its essence permeates various articles that emphasize environmental consciousness, social welfare, and ethical governance practices. This Constitution Day (26th November), let us understand the provisions of the Indian Constitution, relating to ESG.

Environment:

The Constitution’s commitment to environmental protection is evident through Article 48A, which directs the state to protect and improve the environment and to safeguard forests and wildlife. This directive aligns with the environmental pillar of ESG, emphasizing responsible resource management and sustainable practices for the preservation of India’s rich natural heritage. Accordingly, the Government of India, from time to time has enacted various laws for the protection of environment and wildlife. The chapter on Fundamental Duties also clearly outlines under Article 51-A (g), that “It shall be duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wildlife and to have compassion for living creatures.”

The Indian judiciary has also been pro-environment in several judgements, with the case of Rural Litigation and Entitlement Kendra vs. State of Uttar Pradesh [AIR 1988 SC 2187] being landmark as this case recognised the right to live in a healthy environment as part of Article 21 (Right to Life and Personal Liberty) of the Constitution. Similarly, the right to pollution free environment has been recognised as a part of Article 21 in the case of M.C. Mehta vs. Union of India [AIR 1987 SC 1086].

Even at the village level, the panchayats have been empowered under the Constitution to take measures such as soil conservation, water management, forestry, and protection of the environment.

So, environmental protection is a duty of both the state and the citizens, while healthy environment has been recognised as a fundamental right for everyone, as per the Constitution.

Social:

An important and yet relatively unattended aspect of ESG is the social aspect. While none of our laws talk about social issues directly from an ESG point of view, our Constitution embodies several provisions pertaining to social aspects to ensure welfare.

A fundamental aspect of the social vertical deals with “the need to reduce inequalities”, and the Constitution captures its essence aptly through Article 14, which guarantees to every person within India the right to equality before the law and the equal protection of laws. This means that similarly placed persons shall not be unreasonably discriminated in a same set of circumstances. The best example of this would be the concept of “equal pay for equal work”, which ensures that irrespective of one’s gender, if two people do the same work, for the same time, then they shall be entitled to equal wages. This concept has permeated into the Equal Remuneration Act, 1976.

However, the Constitution does allow the Government to provide for certain beneficial provisions for women and children, for advancement of socially and economically backward classes of citizens and scheduled castes and scheduled tribes (Article 15). Such an allowance is to reduce the inequalities which these categories of people have been facing historically.

The enactment of the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 has a large social angle to itself, as the Act expressly recognises the “historical injustice” caused to the STs and forest-dwelling communities and therefore undertakes to correct such injustices by providing for land rights and community rights to these people.

Additionally, Article 17 abolishes untouchability and its practice in any form and punishes any such practice through the Protection of Civil Rights Act, 1955. Such a move was necessary to remove caste-based discriminations prevalent in the Indian society and the disabilities attached thereto.

Another significant provision pertaining to social justice is Article 21. This article simply states, “No person shall be deprived of his right to life or personal liberty except according to the procedure established by law”. This simply-worded provision has been however the most widely interpreted one, bringing under its coverage an entire gamut of rights, like right to health (State of Punjab vs. Mohinder Singh Chawla [AIR 1997 SC 1225]), right to dignity (Francis Coralie Mullin vs. Union Territory of Delhi [AIR 1981 SC 746]), right to privacy (Justice K.S.Puttaswamy(Retd) vs. Union Of India, 2018), right to housing (Ahmedabad Municipal Corporation vs. Nawab Khan Gulab Khan [AIR 1997 SC 152]), right to free legal aid (M.H. Haskot vs. State of Maharashtra [AIR 1978 SC 1548]), right against sexual harassment (Visakha vs. State of Rajasthan, AIR 1997 SC 3011) to name a few.

Such wide interpretation has been given by the Indian judiciary to secure various rights under the umbrella of right to life and personal liberty. And all such interpretations have led to upliftment of social status of various segments of the society.

Other significant articles having a social angle include Article 21-A (Right to Education), Article 23 (Prohibition of traffic in human beings and forced labour), Article 24 (Prohibition of employment of children in factories, mines, or other hazardous employment), right to religion (Articles 25-28).

Most of these rights have been given effect to through various legislative enactments, e.g., Article 21-A through the Right of Children to Free and Compulsory Education Act, 2009; Article 24 through the Factories Act, 1948 and the Child Labour (Regulation and Prohibition Act, 1986), etc.

Apart from these fundamental rights, several directive principles of state policy (DPSPs) also have a social connotation, such as:

-       Article 38- State to secure a social order for the promotion of welfare of the people.

-       Article 39- The State shall, in particular, direct its policy towards securing:

(a) that the citizens, men and women equally, have the right to an adequate means of livelihood;

(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;

(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;

(d) that there is equal pay for equal work for both men and women;

(e) that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;

(f) that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.

-       Article 39-A- Equal justice and free legal aid.

-       Article 42- The State shall make provision for securing just and humane conditions of work and for maternity relief.

-       Article 45- Provision for free and compulsory education for children.

These DPSPs serve as a guiding light to the government to take law and policy decisions for social welfare. And due to the importance of a few provisions outlined above, several DPSPs have been conferred the status of fundamental rights, either by constitutional amendments or by judicial decisions.

Governance:

The Constitution lays down the governance structure for the entire nation, by establishing three wings of the government in the form of executive, legislature, and the judiciary. Further, the Constitution provides for a three-tier system of governance, with the central government at the top, state government in the middle and local self-government at the grassroot levels.

We can draw a relationship between the governance structure laid down by the Constitution and ESG parameters in the following ways:

-       ESG promotes transparency and accountability among corporates; while the concept of Rule of Law does the same at the level of governance of the nation and rule of law is an important element of Article 14.

-       ESG promotes board diversity and inclusivity, which is reflected by reservations of seats for women, SCs and STs for various political positions within the nation. Similarly, reservations are also available in various governmental recruitments, which ensures dynamism in appointments.

-       The stakeholders’ rights are integral to governance aspects in ESG, and similar is the case of protection of fundamental rights (guaranteed by the Constitution) of the stakeholders of Indian governance system, i.e., the people of India.

-       Information disclosure has a huge role to play in ensuring transparency and companies are bound to make various statutory disclosures, due to various legal enactments. A similar role is played by the Right to Information Act, 2005, which in itself is an outcome of the right to freedom of speech and expression under Article 19(1)(a) of the Constitution.

Though not every ESG parameter gets reflected in the Constitution of India, and neither does all provisions of the Constitution fit into the ESG framework, it is fair to say that the Constitution does have various provisions which ensure coverage of the three verticals of ESG.

On that note it is worth mentioning here that the provisions of the Constitution act are applicable only to the state, i.e., the Government and Parliament of India; the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.

They generally do not have a direct application on private persons and corporates. However, any discriminatory action by a private person or corporate is an equal dent on the rights of the affected person. To address this, the state has enacted various laws from time to time to bind the private persons and corporates to act responsibly, such that the rights of people remain protected, to the best possible extent.

Thus, as the world buzzes fancy terms like ESG, let us look into our own grundnorm and legislative framework to find similar provisions and begin acting responsibly.

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