Protecting Development Gains in the Face of Climate Change: The Role of CSR

Over the past decade, India’s Corporate Social Responsibility (CSR) ecosystem has mobilised close to 35,000 crore in FY24-25 capital towards education, health, livelihoods, and rural development. These investments have strengthened service delivery systems and generated measurable socio-economic gains. Climate change, however, jeopardises the gains/outcomes, turning development progress into an increasingly fragile achievement rather than a durable one. 

Climate impacts across India have shifted from isolated shocks to persistent structural stress, steadily eroding the foundations of social and economic progress. The country’s longest heatwave in over a decade in 2024 caused more than 44,000 heatstroke cases and exposed growing vulnerability in public health systems.  Livelihoods, particularly for marginal farmers, are increasingly fragile, with recovery from climate losses taking close to two decades and trapping communities in cycles of rebuilding rather than advancement.  

Today, three out of four districts in India are vulnerable to floods, droughts, and cyclones, with flood-related disasters alone costing over USD 4.2 billion in 2022. Extreme heat presents an even broader systemic risk, with projections indicating impacts on up to 4.5% of GDP and the livelihoods of nearly 380 million people. Compounded, these trends point to a steady depletion of human capital, economic stability, and institutional effectiveness.  

At the same time, corporate interest in climate action continues to grow. Indian companies lead emerging economies in commitments to science-based targets and sustainability disclosures. This momentum increasingly extends into CSR. ICC’s engagement with CSR funders indicates that nearly 80% express interest in supporting climate action, even though approximately 7% of CSR expenditure flows to the environment category. This figure understates the true relevance of CSR to climate outcomes, as many development programmes under Schedule VII already intersect with climate resilience without being explicitly labelled as such. 

Despite growing interest, capital allocation remains loosely aligned with climate vulnerability. The Trends in Climate Philanthropy assessment highlights a concentration of CSR and philanthropic funding in a limited set of sectors — clean energy, agriculture, and urban and rural resilience. Assam, India’s most vulnerable state with the highest number of vulnerable districts and low adaptive capacity, received less than 2% of mapped CSR spending between 2018 and 2023. States like Jammu and Kashmir, Nagaland, Arunachal Pradesh, Himachal Pradesh, and Kerala followed close in tow at just 1%, while Andhra Pradesh, Karnataka, Rajasthan, Maharashtra, and Uttar Pradesh accounted for approximately one-third of total CSR spending 

CSR capital occupies a distinct position within India’s climate landscape. Its flexibility and risk tolerance allow it to support early-stage models, institutional capacity, and integrated approaches that address multiple vulnerabilities simultaneously. Current funding patterns, however, continue to prioritise short-term implementation over system-level levers such as evidence-building, monitoring and evaluation, and long-term resilience planning. 

Legal and policy signals reinforce the need for a decisive shift. The Supreme Court of India has clarified that CSR inherently includes environmental and ecological responsibility, recognising that social welfare and environmental protection are inseparable. At the policy level, the Union Budget 2024–25 announced plans to develop a climate finance taxonomy to enhance capital availability for climate adaptation and mitigation. These developments reflect an institutional recognition that climate risk now shapes the viability of development itself. 

For donors and institutions, climate alignment cannot be a thematic choice. It is a safeguard for past investments and a prerequisite for future impact. Integrating climate considerations will strengthen the resilience of socio-economic outcomes in an increasingly volatile environment. And it’s time that we take the road less travelled.  

The India Climate Collaborative will launch a dedicated thought leadership piece on 16 February, with the Mahindra Group as Knowledge Partner, examining pathways for CSR to evolve from compliance-driven spending to catalytic capital for climate resilience. The publication will offer a structured lens for CSR leaders and institutions seeking to protect development gains and respond strategically to one of the defining risks shaping India’s future.  

Stay tuned for perspectives, analysis, and reflections informed by experiences and engagement with the CSR and climate ecosystem. 

Written by Apurva Desai (Senior Communications Manager at India Climate Collaborative)