CORPORATE PUBLIC-BENEFIT SPENDING REQUIREMENTS FOR CDR

Government requires qualifying companies to spend a defined amount on activities benefiting society or the environment, while allowing company boards to choose eligible projects and delivery partners. CDR can enter this system in two ways. Authorities can recognise qualifying removal activities within an existing public-benefit spending list, allowing companies to direct their required budgets towards them. Alternatively, they can reserve a minimum share specifically for CDR-related activities, creating a recurring funding obligation. The lever mobilises corporate expenditure rather than collecting a tax or making a public grant. Its compliance measure is eligible spending, not tonnes removed, and it differs from a requirement to purchase removal credits. Existing mandatory corporate social responsibility systems provide precedents; a dedicated CDR allocation would be an adaptation.

Authorities should decide which companies qualify, how the spending requirement is calculated and whether CDR is merely eligible or receives a protected allocation. Eligible activities could include removal projects, public-interest research and community delivery programmes, with separate rules for each. A company should know whether it may deliver activities itself, contract an eligible organisation or contribute to an approved fund. Ordinary business expenditure and work already required by other laws should not automatically qualify. India's corporate social responsibility rules exclude both categories, so a commercial CDR investment or compliance purchase cannot simply be relabelled. Rules should also settle project income, ownership of any credits, permitted climate claims, unspent balances and the funding of maintenance beyond an annual spending deadline.

Recognising CDR can give company boards a lawful route to support eligible removal activities from budgets they already have to spend. A dedicated allocation could create a more dependable source of funding for activities with public benefits that buyers of carbon credits may overlook, such as open research, community delivery capability or long-term stewardship. Companies could combine contributions to support larger projects while retaining separate accountability for their spending. Multi-year agreements could help recipients plan staff, maintenance and delivery. The strongest funding effect requires a meaningful CDR allocation and enforceable commitments; broad environmental eligibility alone leaves CDR competing with many other causes.

A spending target can reward exhausting a budget rather than delivering useful outcomes. Companies may prefer visible planting campaigns over maintenance, native ecosystems or less photogenic removal methods. A protected CDR share can displace spending on health, education and other priorities, while profit-linked budgets may fall during downturns. Corporate foundations or favoured contractors can absorb funds without demonstrating additional public benefit. Weak rules could allow normal business costs, legally required remediation or misleading offset claims to qualify. Annual deadlines can encourage rushed projects, and a continuing national spending obligation does not guarantee that any particular recipient will receive renewed funding.

The company regulator should distinguish required expenditure, committed funds, money actually used for eligible activities and unspent balances. Environmental authorities should separately assess project quality, maintenance, community benefits and any verified net removals. Evaluation should establish whether CDR eligibility changed company allocations, whether a dedicated share produced additional support or displaced existing contributions, and how spending varied with profits. Concentration among recipients, repeated related-party awards or low delivery quality should trigger changes to eligibility and oversight. Funding acknowledgements should be checked separately from claims to have offset emissions or acquired removal credits.

Company-law and environmental authorities should agree the spending duty, eligible activities and the evidence needed to demonstrate compliance. Corporate boards and finance teams should test the calculation, budgeting and reporting requirements. Eligible charities, research bodies, public agencies and removal providers should identify delivery costs and realistic maintenance periods. Affected communities and Indigenous peoples should shape activities on their land and the distribution of benefits. Independent auditors should check spending and conflicts of interest, while qualified environmental assessors examine outcomes. Organisations receiving other public-benefit funding should help assess the consequences of reserving part of that funding for CDR.

National legislatures and company regulators can establish mandatory spending duties and amend the activities that qualify, working with environmental authorities on CDR eligibility. India's government confirms that company boards choose and manage projects within the statutory framework. Boards therefore comply with the duty and allocate their budgets, but do not independently impose this policy lever. A lower-level government would need a specific devolved or delegated power to establish an equivalent requirement; receiving corporate support or coordinating projects is insufficient.