From The Hague to the boardroom: What the ICJ climate opinion may mean for business 

What you need to know

• The International Court of Justice (ICJ) will deliver a landmark advisory opinion on states’ legal obligations regarding climate change on 23 July 2025. The opinion could reshape expectations for both governments and businesses worldwide.
• The opinion is non-binding. However, it will clarify the scope of state responsibilities under international law, with potential knock-on effects for corporate liability, due diligence, and climate-related litigation.
• Recent international court decisions, including the Inter-American Court of Human Rights (IACHR) opinion released in early July 2025 and the 2024 International Tribunal for the Law of the Sea (ITLOS) advisory opinion, signal a trend towards greater scrutiny of both state and corporate climate conduct.

What is the case about?

The ICJ advisory opinion follows a request by the United Nations General Assembly, after a campaign led by Vanuatu and other small island States.

The case raises fundamental questions about the intersection of international environmental law, human rights, and state responsibility. Specifically, the ICJ has been asked to address:

• What are the obligations of states under international law to protect the climate system and environment from greenhouse gas emissions for present and future generations?
• What are the legal consequences for states that have caused significant harm to the climate, particularly for vulnerable countries and communities?

The proceedings have attracted unprecedented global participation, with over 100 states and organisations making submissions. This reflects the far-reaching implications for climate justice, accountability, and future policy.

What is the legal effect of any opinion?

The ICJ’s advisory opinion is not legally binding. However, it carries significant legal and moral weight. Advisory opinions are often highly persuasive and can influence the development of international law, shape national policies, and guide future litigation. They are frequently cited by domestic courts and international tribunals, and can set new standards for state and corporate conduct. In some jurisdictions (particularly civil law jurisdictions), ICJ opinions can have a significant impact on decision making by national courts.

What other opinions have been issued?

The ICJ opinion follows a series of recent international court decisions concerning climate:

• Inter-American Court of Human Rights (IACHR): In July 2025, the IACHR issued a sweeping opinion affirming the right to a stable climate as a human right, and calling for states to regulate corporate emissions, ensure due diligence, and provide remedies for climate-related harm.
• International Tribunal for the Law of the Sea (ITLOS): In May 2024, ITLOS clarified that states have a due diligence obligation to protect the marine environment from greenhouse gas emissions, and emphasised the need for harmonisation with international climate treaties. The opinion also highlighted the implications for corporate responsibility and the likelihood of increased regulatory scrutiny.

These opinions collectively signal a shift towards more robust legal expectations for both states and businesses in addressing climate change.

However, some national courts have been hesitant to embrace novel arguments about climate-related duties. For example, the Federal Court of Australia recently determined that the Commonwealth Government does not owe a duty of care to take reasonable steps to protect the people of the Torres Strait Island from the impacts of climate change (see our article Pabai v Commonwealth: climate change, government responsibility and what it means for business).

What should businesses look out for?

The ICJ opinion is likely to reinforce and build upon recent international legal trends that place greater emphasis on both state and corporate responsibility for climate change. The IACHR opinion, for example, went further than before, affirming that the right to a healthy environment includes the right to a stable climate, and that states must regulate emissions, hold corporations accountable, and ensure a fair transition to a cleaner economy.

Key points for businesses include:

• Liability and due diligence: The IACHR opinion highlighted that companies, especially those with significant historical or current emissions, have a particular responsibility to avoid causing or contributing to climate-related harm. States are expected to impose tougher requirements on high-emitting sectors, including through taxation, transition plans, and mandatory disclosures.
• Disclosure and greenwashing: There is growing pressure for robust climate-related disclosures and for companies to avoid misleading claims about their environmental performance. The IACHR and ITLOS opinions both emphasise the need for transparency and accountability.
• Transition planning: Businesses should expect increased scrutiny of their transition strategies, with a focus on alignment with the goals of the Paris Agreement and national climate commitments.
• Litigation risk: The ICJ opinion, if it follows the trends set by the IACHR and ITLOS, is likely to embolden claimants in domestic and international courts, increasing the risk of climate-related litigation and investment treaty claims against states.

What effect will the opinion have on domestic litigation or investment treaty claims?

While the ICJ opinion is not binding, it is expected to have a significant impact on domestic and international litigation. Courts around the world are increasingly willing to rely on international legal standards in climate cases. The ICJ’s reasoning may be cited in support of claims against both states and companies.

In the context of investment treaty claims, the opinion may influence how tribunals balance investment protection with states’ obligations to regulate in the public interest, particularly in relation to climate action. The recent IACHR opinion explicitly called for the review and reform of investment treaties to ensure they do not hinder climate regulation or create “regulatory chill”.

Does any of this matter in an age of declining respect for multilateral organisations?

Despite current geopolitical challenges and scepticism towards multilateralism, the ICJ’s advisory opinions remain highly relevant. International court decisions continue to shape legal and regulatory expectations, inform domestic and transnational litigation, and influence the behaviour of both states and corporations. The growing body of international jurisprudence on climate change is already being used by courts, regulators, and investors to drive change.

For commercial professionals, the message is clear: the legal landscape is evolving rapidly, and the ICJ opinion is likely to accelerate demands for greater climate responsibility, transparency, and action. Businesses and governments alike should be prepared to respond to higher standards and increased scrutiny in the years ahead.

What you need to do

• Review and, where necessary, strengthen your organisation’s climate risk management, due diligence, and disclosure practices in anticipation of evolving legal and regulatory expectations.
• Monitor developments in climate litigation and regulatory enforcement, as the ICJ opinion may influence domestic courts and investment treaty claims, increasing exposure for both states and companies.