How significant for businesses is the International Court of Justice’s 2025 Advisory Opinion on climate change?

On 23 July 2025, the International Court of Justice (the “ICJ”), the highest judicial body of the United Nations, issued its long anticipated Advisory Opinion on climate change (the “Advisory Opinion”). The Summary can be found here.

The Advisory Opinion addresses the questions put to it by the United Nations (“UN”) General Assembly on 29 March 2023 which were: (a) what obligations do States have “under international law to ensure the protection of the climate system and other parts of the environment” and (b) what are the legal consequences for States for breach of these obligations?

The Advisory Opinion reflects the unanimous decision of the court. Although the Advisory Opinion is not legally binding, it carries “significant legal and moral authority and help[s] clarify and develop international law by defining States’ legal obligations” under international law.

Contents

1: Background

2: What obligations do States have “under international law to ensure the protection of the climate system and other parts of the environment”?

3: How is State responsibility determined in a climate change context?

4: What are the legal consequences of States’ wrongful acts?

5: What are the consequences for businesses?

Background

The story began in 2019 with a group of law students at the University of South Pacific who wanted to find ways to address climate change and they realised that their ideas could make a difference if backed by governments to bring a case to the ICJ (as cases from individuals are not heard by the ICJ). Six years and over a hundred written and oral submissions from States and groups to the ICJ later, the Advisory Opinion was published¹. The Advisory Opinion went far further than anticipated, laying out an international legal landscape which could change the face of global climate policy.

The Advisory Opinion follows two existing landmark opinions. The first issued by the International Tribunal for the Law of the Sea (“ITLOS”) on climate change on 21 May 2024 interpreting the United Nations Convention on the Law of the Sea (“UNCLOS”), confirming that “pollution of the marine environment” as used in UNCLOS includes greenhouse gas (“GHG”) emissions . This means that States are required “to take all necessary measures with a view to reducing and controlling existing marine pollution from such emissions and eventually preventing such pollution from occurring at all”.

The second was an advisory opinion published on 3 July 2025 by the Inter-American Court of Human Rights on the climate emergency and human rights. It confirmed that countries have to protect the climate system as part of their human rights obligations under the American Convention on Human Rights and other human rights laws and the “climate emergency can only be addressed adequately by urgent and effective mitigation and adaptation actions, and by making progress towards sustainable development with a human rights perspective, coordinated around resilience”.

What obligations do States have “under international law to ensure the protection of the climate system and other parts of the environment”?

In its Advisory Opinion, the ICJ considered the applicable law which is relevant in relation to climate change. It confirmed that in addition to international climate change treaties and other environmental treaties, customary international law and international human rights laws as well as to the guiding principles set out in the UNFCCC are relevant applicable law.

(i) Climate change treaties

The Advisory Opinion confirmed that the body of law determining the climate change obligations of States was broader than many had previously argued. With the following treaties all forming part of the most directly relevant applicable law:

1. the Charter of the United Nations;
2. climate change treaties (including the UNFCCC, the Kyoto Protocol and the Paris Agreement);
3. the UNCLOS; and
4. other relevant environmental treaties (such as the Ozone Layer Convention, the Montreal Protocol, the Biodiversity Convention and the Desertification Convention).

In its analysis of the climate treaties, the ICJ determined that States must “prepare, communicate and maintain successive” nationally determined contributions (“NDCs”) which reflect progression of the goal in question and the State’s highest possible ambition. The mere preparation, communication and maintenance of successive NDCs is not sufficient to comply with the Paris Agreement. All States’ NDCs, when taken together, must be capable of realising the primary temperature goal of the Paris Agreement, which the Court identified as 1.5°C above pre-industrial levels (as this has become the scientifically based consensus target under the Paris Agreement, the “1.5°C goal”). The ICJ found that there was little discretion for States preparing NDCs: the States are under a stringent duty of due diligence to realise the ambition of the Paris Agreement and have a best efforts obligation to achieve the content of their NDCs. States are also under a best efforts duty to ensure undertake adaptation planning.

The ICJ was clear that States must be proactive and pursue measures that are reasonably capable of achieving the NDCs that they have set. The measures that States may take include “putting in place a national system, including legislation, administrative procedures and an enforcement mechanism, and exercising adequate vigilance to make such a system function effectively, with a view to achieving the objectives in their NDCs”. Insufficient action or failure or to set and update robust NDCs, regulate private actors or provide support to more vulnerable nations could lead to State liability.

(ii) Customary international law

The ICJ then considered the applicability and relevance of customary international law concluding that:

1. States have a stringent duty to prevent significant environmental harm in the context of climate change. This is an obligation to act with due diligence with States “taking, to the best of their ability, appropriate and, if necessary, precautionary measures, which take account of scientific and technological information”.
2. States have a duty to co-operate for the protection of the environment and this also serves as a guiding principle for the interpretation of other rules, such as the climate change treaties. And although States are free to choose the means of co-operating, the Court recognises that the principal forms of co-operation under the Paris Agreement are financial assistance, technology transfers and capacity-building.

(iii) International human rights law

The Advisory Opinion recognised that international human rights law is also applicable relevant law, particularly because “the protection of the environment is a precondition for the enjoyment of human rights”. The ICJ continued: “Consequently, in so far as States parties to human rights treaties are required to guarantee the effective enjoyment of such rights, it is difficult to see how these obligations can be fulfilled without at the same time ensuring the protection of the right to a clean, healthy and sustainable environment as a human right”.

(iv) Other principles

The principle of common but differentiated responsibilities and respective capabilities which, in the view of the ICJ “reflects the need to distribute equitably the burdens of the obligations in respect of climate change”, taking into States’ account historical and current emissions of greenhouse gases and their different current capabilities and national circumstances, including their economic and social development” is relevant. As are the principles of sustainable development, equity (including international equity, protecting “the climate system for the benefit of present and future generations of humankind”) and the precautionary approach or principle as guiding principles for the interpretation and application of the most directly relevant legal rules.

In coming to the above determination, the ICJ considered whether the rules identified above should be excluded by virtue of the interpretative principle lex specialis – the idea that the climate change treaties create a self-contained area of law superseding all general international law. The ICJ found that the climate change treaties sit within the wider international law context “neither displacing nor exhausting” states’ wider obligations under general international law and that international agreements are coherent and consistent with each other. The ICJ also found that the obligations owed under customary and conventional law are owed to the international community as a whole. All States are deemed to have a legal interest and therefore all States may make a claim concerning an alleged breach by another State. The terms of individual treaties will determine whether individuals or private companies can bring claims against States for internationally wrongful acts.

How is State responsibility determined in a climate change context?

A State does not need to be party to a climate change treaty to owe an obligation: The ICJ noted that States do not have to be party to the climate change treaties, such as the Paris Agreement, to owe an obligation to prevent significant harm to the climate system and other parts of the environment. Equally, a State does not incur responsibility simply because the desired result is not achieved, the obligation to prevent environmental harm is not an obligation to achieve the result but an obligation for a State “to take all measures which were within its power to prevent the significant harm” (noting that the obligation is “all” and not qualified by “best” or “reasonable”). A State which fails to exercise due diligence in its obligation to prevent harm to the climate system and the environment commits an internationally wrongful act.

“Attribution” is met by breach of obligations set out above: The Advisory Opinion considered the meaning of “attribution” in the context of international law and found that it was not the same as attribution as used in climate science but the breach of the conventional and customary obligations set out above. It noted that an internationally wrongful act attributable to a State may include the failure to take appropriate action to protect the climate system from GHG emissions “through fossil fuel production, fossil fuel consumption, the granting of fossil fuel exploration licences or the provision of fossil fuel subsidies”. As the obligations set out above also include the obligation to regulate the activities of private actors, a State may also be responsible where it has failed to introduce regulatory and legislative measures to limit the quantity of emissions from private actors in its jurisdiction.

Causation in the climate change context involves two distinct elements: (i) can a climatic event be attributed to anthropogenic (human-caused) climate change (ascertainable by science) and (ii) to what extent can damage caused by climate change be attributed to a State or group of States (will depend on the specific facts of the case). And more than one State may be held responsible.

What are the legal consequences of States’ wrongful acts?

The Advisory Opinion observed that “the entire panoply of legal consequences provided for under the law of State responsibility may be available. These include obligations of cessation and non-repetition (irrespective of the existence of harm) and full reparation, including restitution, compensation and/or satisfaction (which can only be claimed by the injured State). The Advisory Opinion noted that restitution may take the form of reconstructing damaged or destroyed infrastructure, restoring ecosystems and biodiversity and if that is materially impossible then compensation may be required.

“Above all, a lasting and satisfactory solution requires human will and wisdom – at the individual, social and political levels – to change our habits, comforts and current way of life in order to secure a future for ourselves and those who are yet to come.”

What are the consequences for businesses?

• The Advisory Opinion only considered the obligations of States and not those of individuals or businesses. However, the ICJ made clear that those obligations involve regulating the activities of private actors as a matter of due diligence. Consequently, there are likely to be indirect consequences for businesses, as States increase the stringency of national regulation and legislation to ensure their own compliance with international law.
• States may be held responsible for internationally wrongful acts such as failure to take appropriate action to protect the climate system from GHG emissions, including through fossil fuel production, fossil fuel consumption and granting fossil fuel exploration licences or the provision of fossil fuel subsidies. The standard that they will be held to is high – they must take "all measures…in [their] power" to prevent significant harm. Therefore States will have to consider their own NDCs and strategies for climate mitigation and adaptation to ensure that they are in compliance.
• As a result we can expect that there may be more ambitious NDCs and net zero targets and possibility more regulation of the activities of private actors. We may see this at a sustainability reporting level or regulatory and legislative measures to limit the quantity of emissions from private actors in the State’s jurisdiction. Practically, this would support the development of transition plans and reporting in the progress so that States can understand what is happening in the private sector and comply with their due diligence obligations. Those measures will need to be effectively enforced, and so businesses can expect States to take domestic action if they are not adhered to. And of course the additional focus that the ICJ Advisory Opinion brings may attract a greater level of investor scrutiny.
• Although the obligations of private actors were not considered, we can expect to see more climate litigation against governments and private companies generally and the Advisory Opinion is likely to be referred to in that context. Businesses could also be claimants. As noted above, certain treaties enable parties other than States to bring claims at the international level. And if private actors are not satisfied with the measures taken by States – whether they are said to have gone too far or not far enough – we could see an increase in domestic public law action.
• Given that nature has a large role to play in climate change mitigation and adaptation and that the ICJ found the Biodiversity Convention to form part of the climate change obligations held, we can expect to see nature playing a bigger part in the conversation: perhaps through more finance or more focus on National Biodiversity Strategy and Action Plans for climate change purposes.
• For sectors which heavily rely on fossil fuels, we can expect to see their liabilities increase and a tendency towards lower credit-worthiness. Investment in fossil fuels now may require a change in strategy in the longer term and the risk of stranded assets, with the litigation and stakeholder risks that follow.

This note is intended to be a general guide and covers questions of law and practice. It does not constitute legal advice in relation to a particular transaction or situation. Please contact your usual Hogan Lovells contact if you have questions about this advisory opinion or the article.

Authored by Emily Julier and Hannah Piper.