### 33. Climate Accountability Of State-Owned Utilities

**Introduction**

State-owned utilities play a central role in electricity generation, transmission and distribution and therefore have significant responsibilities in addressing climate change. Their accountability arises not only from environmental legislation but also from constitutional principles, corporate governance obligations, public-finance rules and regulatory requirements. Climate accountability requires state-owned utilities to consider greenhouse-gas emissions, environmental impacts, renewable-energy transition, climate-related risks and inter-generational equity while performing their statutory and commercial functions.

**Constitutional And Environmental Framework**

The Indian Constitution provides an important foundation for climate accountability. **Article 21** has been interpreted to include the right to a healthy environment, while **Articles 48A and 51A(g)** impose environmental responsibilities upon the State and citizens. State-owned utilities, because of their public character, must exercise their powers consistently with these constitutional principles.

In **M.K. Ranjitsinh v. Union of India (2024)**, the Supreme Court recognised a constitutional right to be free from the adverse effects of climate change, linking climate protection with Articles 14 and 21. This judgment strengthens the constitutional basis for requiring public authorities and state-controlled entities to consider climate consequences in decision-making.

**Environmental Duties Of State-Owned Utilities**

State-owned electricity utilities must comply with environmental-clearance requirements, pollution-control standards, forest and wildlife laws, and other applicable environmental regulations. Their public ownership does not exempt them from environmental obligations.

In **Vellore Citizens’ Welfare Forum v. Union of India (1996)**, the Supreme Court recognised the principles of **sustainable development, precautionary principle and polluter pays principle** as part of Indian environmental law. These principles are relevant to utilities undertaking large generation and infrastructure projects because environmental costs cannot simply be disregarded in pursuit of electricity production.

Similarly, **Hanuman Laxman Aroskar v. Union of India (2019)** emphasised informed and transparent environmental decision-making. For state-owned utilities, environmental approvals should therefore be based upon proper assessment of ecological consequences and climate-related impacts.

**Climate Governance And Public Accountability**

State-owned utilities are also subject to public accountability because they operate with government ownership, public assets or statutory authority. Their major investment decisions, including coal-based generation, renewable projects, transmission infrastructure and retirement of high-emission assets, may have long-term climate consequences.

In **State of U.P. v. Raj Narain (1975)**, the Supreme Court recognised the importance of governmental transparency and the public's right to know in appropriate circumstances. Applied to climate governance, transparency can support public scrutiny of environmental assessments, emissions information and major energy-policy decisions.

**Corporate And Regulatory Responsibility**

Where a state-owned utility operates as a government company, corporate governance requirements under the **Companies Act, 2013** may operate alongside electricity and environmental legislation. Climate-related risks can affect investment decisions, asset valuation, compliance costs and long-term financial sustainability. Utilities must therefore increasingly integrate environmental considerations into corporate planning and risk management.

**Conclusion**

Climate accountability of state-owned utilities combines **constitutional environmental rights, statutory environmental obligations, electricity regulation and corporate governance**. Decisions concerning generation, transmission and investment must increasingly account for climate impacts and long-term sustainability. **M.K. Ranjitsinh, Vellore Citizens’ Welfare Forum and Hanuman Laxman Aroskar** demonstrate the importance of constitutional protection, sustainable development and transparent environmental decision-making. State ownership consequently strengthens the need for accountable and environmentally responsible energy governance rather than creating immunity from climate-related obligations.