ICJ's landmark climate opinion: what it means for business

The ICJ's opinion on the obligations of states in relation to climate change is a landmark in international law

What you need to know

• The International Court of Justice (ICJ) issued a landmark advisory opinion on 23 July 2025. It adopted an expansive interpretation of states' obligations regarding climate change. This will have far-reaching consequences for climate litigation, including potential compensation claims for historic contributions to climate change.
• The opinion is non-binding, but it is likely to influence domestic litigation. Its effect will particularly be felt in domestic public law challenges to government decisions involving activities which result in GHG emissions, with flow on effects for business activities.
• The ICJ's opinion adds to a body of international court decisions which signal a trend towards greater scrutiny of both state and corporate climate conduct.

What you need to do

• Businesses need to be prepared for heightened expectations of due diligence, robust disclosure and credible transition planning as a result of increasing international pressure on states and businesses to manage climate change risks.
• Businesses should carefully monitor international and domestic developments in order to ensure that they are aware of and acting consistently with these heightened expectations.
• It is critical to implement and maintain robust systems and processes to identify, assess, prioritise, manage and report on the impacts of climate change, to ensure climate risks are treated with the same rigor as other strategic and financial risks.

What was the ICJ asked to decide?

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

The request raised fundamental questions about the intersection of international environmental and human rights law, and state responsibility. Specifically, the ICJ was asked to address:

• What are the obligations of states under international law to protect the climate system and environment from anthropogenic greenhouse gas emissions (GHG) for present and future generations?
• What are the legal consequences for states that have caused significant harm to the climate system, particularly for vulnerable countries and present or future communities affected by the adverse effects of climate change?

What is the legal effect of the 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 role did climate science have in relation to the opinion?

The ICJ relied primarily on Intergovernmental Panel on Climate Change (IPCC) reports, which participants agreed constituted the best available science on the causes, nature and consequences of climate change. The court introduced its analysis by noting that "it is scientifically established that the increase in concentration of GHGs in the atmosphere is primarily due to human activities, whether as a result of GHG emissions, including by the burning of fossil fuels, or as a result of the weakening or destruction of carbon reservoirs and sinks, such as forests and the ocean, which store or remove GHGs from the atmosphere". It then considered the environmental and human consequences of climate change, including extreme weather, devastation to agriculture, population displacement, and increased incidence of illness and disease, to inform the conclusions reached.

What did the ICJ conclude on states' obligations regarding climate change?

The key conclusions of the ICJ were:

• There are a number of directly relevant sources of applicable law. These include the Charter of the United Nations, the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and Paris Agreement (these last 3 instruments are referred to as the Climate Change Treaties), the United Nations Convention on the Law of the Sea (UNCLOS) and other specific environmental treaties addressing issues such as the depletion of the ozone layer, and customary international law (customary international law is the body of law which arises from general practices of states accepted as having legal effect, rather than specifically negotiated treaties).
• The Climate Change Treaties are the principal legal instruments regulating the international response to global climate change. However, these do not have the effect of excluding other sources of climate change obligations. A number of states had made submissions to the ICJ that the Climate Change Treaties did this, particularly in respect of customary law obligations. The ICJ rejected this, finding that nothing in the Climate Change Treaties indicated that was the intention of the signatories. Instead, each source of law had a separate existence, although compliance with one source (e.g. the Climate Change Treaties) might suggest compliance with customary international law.
• The Climate Change Treaties impose binding obligations on state parties to ensure the protection of the climate system and other parts of the environment from GHGs. Notably, the ICJ considered that the aim of the Paris Agreement to "pursue efforts" to limit temperature increases to 1.5 degrees above pre-industrial levels had hardened into the parties' agreed primary temperature goal. This was on the basis that conferences of the parties since the Paris Agreement had given rise to an agreement between the parties regarding the Paris Agreement's interpretation and application for the purposes of Article 31(3)(a) of the Vienna Convention on the Law of Treaties.
• The primary mechanism under the Paris Agreement to achieve emissions reductions involves each state party preparing, communicating and maintaining successive nationally determined contributions (NDCs). The ICJ opined that each party has limited discretion regarding the content of its NDCs. It must do its utmost to ensure that NDCs represent such party's highest possible ambition, capable of achieving the 1.5 degrees temperature goal.
• The duty under customary international law to prevent harm to the environment applied in the context of climate change. States must act with due diligence to prevent this harm, including taking account of scientific and technological information, and undertaking risk assessments. The obligation to prevent significant harm to the climate system required a stringent standard of due diligence, and included an obligation to prevent significant transboundary harm.
• UNCLOS is relevant to climate change. Article 192 of the Convention requires state parties to the Convention to take measures to protect and preserve the marine environment and to prevent or reduce the deleterious effects of climate change and ocean acidification. This accords with the International Tribunal for the Law of the Sea's May 2024 opinion.
• Other international law principles, such as those on sustainable development, equity, precautionary approach and "polluter pays" are applicable for guiding principles for the interpretation and application of most directly relevant legal rules.
• The link between climate change and international human rights was clear. The court considered that protection of the environment was a precondition for the enjoyment of a number of human rights, including the right to life, health, and an adequate standard of living. The court found that the adverse effects of climate change may impair the effective enjoyment of human rights. It also found that the human right to a clean, healthy and sustainable environment was essential for the enjoyment of other human rights.

What did the ICJ conclude on the consequences for states which cause harm?

Having considered the nature of states' obligations, the ICJ opined on the consequences for states which cause harm.

The key conclusions were:

• Established international law principles govern the circumstances in which states may be responsible for "internationally wrongful acts". They also address the consequences of responsibility. The ICJ considered whether the Climate Change Treaties could be said to have excluded these general principles, such that the Climate Change Treaties alone were relevant for determining consequences of breach. It concluded that the Climate Change Treaties did not support this conclusion. Therefore the general principles of state responsibility applied.
• Climate change is a highly complex and multifaceted phenomenon involving possible responsibilities for multiple states over long periods of time. This raised particular questions regarding attribution and causation.
• In relation to attribution, the ICJ noted that the term was used in two senses: in the climate science sense of linking the effects of climate change to specific emitting activity, and in the international law sense of attributing an act to a responsible state. Regarding the latter, the ICJ noted that the conduct of organs of a state is regarded as an act of that state. Therefore "failure of a State to take appropriate action to protect the climate system from GHG emissions — including through fossil fuel production, fossil fuel consumption, the granting of fossil fuel exploration licences or the provision of fossil fuel subsidies — may constitute an internationally wrongful act which is attributable to that State".
• The fact that the activities of private actors (such as oil or gas companies) had resulted in emissions did not mean that states were not responsible. Thus "a State may be responsible where, for example, it has failed to exercise due diligence by not taking the necessary regulatory and legislative measures to limit the quantity of emissions caused by private actors under its jurisdiction."
• Regarding causation, the ICJ concluded that the existing legal standard of “a sufficiently direct and certain causal nexus between the wrongful act . . . and the injury suffered" was flexible enough to be applied to the consequences of climate change. The ICJ acknowledged that establishing a causal link between wrongful act and harm might be harder than in the case of local sources of pollution, but this did not mean that it was impossible in the climate context. Ultimately any such claim would have to be assessed by reference to the specific facts in issue.
• States could face the "full panoply" of legal consequences provided for under the law of state responsibility. The court could not specify what precise consequences might apply, given the range of potential breaches: from a failure to adequately prepare NDCs, to a failure to regulate emissions. Consequences could include a duty to cease an activity (including by revoking administrative, legislative, and other measures permitting emissions), and ensure its non-repetition. They could also include a duty to make reparation, including through payment of compensation. The ICJ noted though that "In the climate change context, reparations in the form of compensation may be difficult to calculate, as there is usually a degree of uncertainty with respect to the exact extent of the damage caused."
• Climate change requires states to take individual measures in co-operation with other states – "co-operation is not a matter of choice for state but a pressing need and a legal obligation."

How did the ICJ opinion relate to other recent advisory opinions?

The ICJ opinion follows two recent international law opinions, issued by the Inter-American Court of Human Rights (IAHCR) and the International Tribunal for the Law of the Sea (ITLOS).
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. The ICJ did not go as far as the IACHR in specifying particular regulatory measures states should take regarding corporate activity.

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.

How may the opinion affect business?

The opinion does not expressly address obligations of corporates or other business entities. It concerns the obligations of states. However the opinion is likely to affect businesses in the following ways:

1. Domestic public law litigation: Claimants challenging the decisions of public authorities in domestic courts on the basis that such decisions are inconsistent with a reduction of emissions are likely to rely on the ICJ's opinion. The effect of the opinion in domestic legal systems may vary, but it will be cited as a persuasive statement of international law in the context of the uniquely international challenge of climate change. If domestic courts are influenced by these arguments, this will have a knock on effect for business activities reliant on licences, permits or other measures from public authorities.
2. Fossil fuel activity: Fossil fuel projects are likely to be particularly susceptible to challenges of this nature, given the ICJ's view that an internationally wrongful act may arise where fossil fuel production, consumption, exploration and subsidisation is involved.
3. Domestic climate litigation: International law on state responsibility and domestic law on corporate duties of care in relation to climate change involve very different legal principles. Yet the ICJ's finding that climate change duties arise across a variety of international legal contexts, including human rights, is likely to encourage further domestic litigation against companies, seeking accountability for involvement in emissions-generating activities.
4. Causation and loss arguments: In this context, the ICJ's opinion that while issues of causation in climate litigation present challenges, they are not insurmountable, is relevant. Domestic courts have already found that in principle high emitters could be financially liable for the consequences of emissions caused by their activities. The ICJ adds further support to the argument that causation in climate change litigation can be established, within established legal frameworks.
5. Investment treaty claims: Businesses rarely encounter international law directly. One area where they do is where they bring investment treaty claims against states, seeking compensation for regulatory or other state measures which have harmed their investments. Where states take measures to reduce emissions which provoke investor claims, states are likely to cite the ICJ's opinion as a defence, on the basis that their international law obligations required them to take the measures complained of. This may affect the attractiveness, and outcome, of investor state claims.

What you need to do

• Businesses need to be prepared for heightened expectations of due diligence, robust disclosure and credible transition planning as a result of increasing international pressure on states and businesses to manage climate change risks.
• Businesses should carefully monitor international and domestic developments in order to ensure that they are aware of and acting consistently with these heightened expectations.
• It is critical to implement and maintain robust systems and processes to identify, assess, prioritise, manage and report on the impacts of climate change, to ensure climate risks are treated with the same rigor as other strategic and financial risks.

Other authors: Miran Bahra, Associate.