This policy briefing written by Nick Scott and Aastha Kapoor explores the implications of the International Court of Justice’s (ICJ) advisory opinion on states’ climate obligations, issued in July 2025. While the opinion focuses on state responsibilities, it may significantly influence corporate governance and regulatory landscapes. By confirming the legal foundation for climate action, the opinion could pave the way for more assertive climate action and regulation leading to potential legal and policy risks for businesses. However, the opinion’s impact will depend on how governments and courts across the world respond.
Professor Harro van Asselt is the Hatton Professor in Climate Law at the University of Cambridge, and co-chair of CCE’s advisory group. He said:
“The Court puts fossil fuel producers on notice. Singling out fossil fuel production, licensing, and subsidisation as activities that may be illegal under international law, the Court pays heed to scientific findings that fossil fuel expansion is incompatible with averting dangerous climate change.”
Briefing highlights:
- Advisory Opinions and Business Risk
Although nonbinding, ICJ advisory opinions can shape international and domestic law, leading to new regulations and informing court decisions that ultimately affect businesses. Their influence on businesses is indirect, but can be wide-ranging and significant. - Obligations Beyond Climate Treaties
The ICJ confirmed that states’ climate obligations extend beyond climate-specific treaties like the Paris Agreement. This creates a broad legal foundation for future regulation and potential litigation. - Jurisdictional Differences
The impact of any advisory opinion depends on how governments respond. Some jurisdictions may accelerate climate efforts in response to the opinion, whereas others may ignore the opinion. The extent to which businesses are affected by this opinion may depend on the jurisdictions in which they operate, but litigation risks will likely be heightened even absent any policy changes. - Legal Foundation for Regulating Private Actors
The opinion states that regulating private actors may be vital to meeting multiple climate-related obligations, including due diligence requirements and human rights rules. This provides a clear legal basis for climate-related regulation which impacts businesses. - Fossil Fuels in the Firing Line
The ICJ directly mentions that certain policy measures, such as granting exploration licences and providing fossil fuel subsidies, may be unlawful in some circumstances. Separate opinions issued by ICJ judges go further by examining international investment treaties and environmental impact assessments. If governments address these points, it could create significant regulatory risk for fossil fuel consumers, and downstream impacts on fossil fuel consumers. - The Opinion in a Broader Political Context
Building on previous opinions from other international courts, this advisory opinion confirms the international legal system’s recognition of stringent climate obligations. This trend observed in courts may conflict with growing political resistance to climate or sustainability frameworks, potentially polarising responses and testing the ICJ’s normative influence. - Action Points for Business
Regardless of how impacts materialise, companies should monitor governmental responses, strengthen climate governance at board level, and reinforce climate-related risk management. The opinion underscores the importance of aligning with global climate goals—not only for compliance, but for resilience.
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