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Author	Mr Vincent Hoppmann
Organisation/Institution	Max Planck Institute for Comparative and International Private Law
Country	GERMANY
Panel	Corporate Law and Governance
Title	Beyond Taxation: Mandatory CSR Expenditures in India as a Governance Mechanism
Abstract	While in the Global North the discourse on corporate sustainability frequently prioritises transparency or stakeholder participation regimes, Asia has developed distinct legal innovations, significantly mandatory corporate sustainability expenditure. Originally pioneered by Mauritius in 2009 and subsequently adopted by the Seychelles (2013) and Nepal (2020), this mechanism finds its most prominent expression in India’s Companies Act 2013. This diffusion underscores a successful intra-regional transfer of legal mechanisms, mandating qualifying companies to invest a portion of their profits into social and environmental sustainability. This paper critically analyses the peculiar legal nature of this instrument. It argues that labelling this mechanism a “CSR Tax” is analytically incorrect. Unlike a tax, where the state collects and redistributes resources, this Asian model establishes a system of decentralised mandatory investment. The state regulates the obligation, but the corporation retains the allocation, effectively shifting the burden onto the private entity. Building on this, the paper interrogates whether this legal structure successfully transforms corporate governance or merely generates a compliance industry. The central inquiry is whether the obligation to spend forces the development of internal sustainability expertise and strategic business model adaptation, or whether it fosters an “outsourced conscience,” with companies satisfying the law by transferring funds to NGOs, state funds, or foundations with minimal internal engagement. Drawing on comparative legal analysis and empirical insights, the paper contrasts this Asian expenditure model with conventional approaches such as taxation and disclosure. It concludes that the mechanism offers a potent tool—provided it is designed to create internal organisational friction and knowledge-building rather than facilitating passive payment. As the Indian experience with its CSR Committee demonstrates, integrating mandatory spending with internal governance structures is essential. Ultimately, mandatory CSR expenditures present a significant “reverse legal transplant” opportunity, offering lessons from Asia’s rise for the global pursuit of sustainable corporate law.
Biography	Vincent Hoppmann is a Research Associate at the Max Planck Institute for Comparative and International Private Law in Hamburg and a PhD candidate at Bucerius Law School under the supervision of Professor Holger Fleischer. His research investigates sustainable corporate law, comparative law, and corporate governance. His doctoral thesis, ‘Impulses from the Global South for a Sustainable Corporate Law’, examines legal innovations such as mandatory sustainability expenditures, documenting how lessons from the Global South can inform the European debate. For his work on ‘reverse legal experiences’ from the Global South, he was awarded the Young Scholars Award 2024 by the German Society for Comparative Law. Vincent's academic focus is complemented by practical experience as a freelance ESG consultant, advising companies on sustainability strategy, ESG reporting, and EcoVadis certification. He has published on corporate responsibility and ESG in key German law journals. He completed his First State Exam in Law at Heidelberg University, specialising in company law, and received an Honourable Mention as Best Individual Oralist in the Vis Moot.