ICJ advisory opinion on climate change: What it means for states and businesses

4 September 2025

In a landmark move, the International Court of Justice (ICJ) has issued an advisory opinion on climate change that clarifies the legal obligations of states to protect the climate system. While non-binding, this opinion carries significant weight for governments and businesses alike, shaping the future of climate accountability and corporate risk management.

In this article, Sustainability Advisor Sophie Schlachter explores the ICJ’s opinion and what it means for businesses.

How the ICJ climate case reached the world stage

The story in numbers:

The questions put before the ICJ

The ICJ was asked to consider two core questions:

  1. What are the obligations of States under international law to ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases for States and for present and future generations?
  2. What are the legal consequences under these obligations for States where they, by their acts and omissions, have caused significant harm to the climate system and other parts of the environment…?

The ICJ’s key findings on climate obligations

Regarding obligations, the first core tenet of the ICJ advisory opinion was that existing international environmental treaties which member states are already party to – such as the UN Framework Convention on Climate Change and the Paris Agreement – do indeed place a legal obligation on states to protect the climate system from greenhouse gas emissions.

The second core tenet was that the human rights treaties that member states are already party to reinforce the legal obligation to protect the environment. This is because access to a clean, healthy and sustainable environment is, in itself, a human right – and because the enjoyment of all other human rights is predicated on access to that same healthy environment.

What happens when states fail to act

The ICJ formed the opinion that consequences of a state’s failure to fulfill its legal obligations to protect the climate system include the “entire panoply of legal consequences provided for under the law of State responsibility.” This includes cessation, non-repetition and full reparation.

The reference to ‘reparation’ is significant. It opens the door for low-emitting states to seek financial compensation from high-emitting states for climate-related damage.

Why this opinion matters for governments and business

While the opinion is not legally binding – and cynicism over the actual clout of international law is justified in today’s tumultuous geopolitical times – there are still valuable and far-reaching implications of the opinion.

Climate litigation now has an established jurisprudence from the most esteemed court in the world, which will add weight to climate-related legal arguments. This could impact domestic legal outcomes, where state actions are being challenged based on their inconsistency with GHG emissions reductions obligations.

Fossil fuel sectors and reliant states should be taking the opinion as complete indictment on the continued use of non-renewable energy. Indeed, the court specifically warned that the production, consumption, exploration and subsidisation of fossil fuels could be considered an internationally wrongful act.

Private sector actors were noted as falling under state jurisdiction, and the opinion confirms the onus on the state to regulate the emissions of companies. This solidifies the increasingly common practice of states compelling private companies to report and reduce their emissions.

Business is part of the chain of responsibility

The opinion is a landmark because of the clarity it brings to the legal particulars of climate change, ensuring both the obligations and the consequence of failure are clearly demarcated, from a state perspective. Its more wide-ranging message is that the era of profligate green-house gas emissions is over. Businesses – which are regulated by states – form part of the chain of responsibility to protect the climate system from emissions, and to ensure the human right to a healthy environment is enjoyed by everyone.

Businesses in all sectors must:

  • Begin planning for a reduced reliance on fossil fuels.
  • Facilitate robust climate transition planning.
  • Ensure compliance with increasing climate-related reporting requirements.

Transition to a sustainable global economy

The ICJ has confirmed what many already knew: the obligation to act on climate change is not optional. For states and businesses alike, the challenge is to transform these obligations into concrete strategies that deliver both climate protection and commercial success. Those who act decisively will not only reduce their risk exposure but also position themselves as leaders in the transition to a sustainable global economy.

Ready to start planning sustainably?

Zooss Consulting specialises in bringing clarity to planning and reporting using data analytics, joining the dots to form insights that influence better decision-making.

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We call this approach Sustainable Business Planning – and it has the power to deliver better outcomes for organisations, people, and our planet.

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About the author – Sophie Schlachter, Sustainability Advisor

Sophie holds a Master of Sustainability from the University of Sydney and has worked across regenerative agriculture and waste management sectors, including for OzHarvest and the Taronga Zoo Conservation Society. Sophie is experienced in business and sustainability analytics, and is passionate about enabling sustainable business that balances profit with positive environmental and social outcomes.

Better Planning. Better Planet.

 

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