How the ICJ’s advisory opinion could reshape corporate climate risk

In July 2025, the International Court of Justice (ICJ) unanimously stated in its advisory opinion that countries have various obligations to address climate change, stemming not only from specific climate treaties, but also from fundamental principles and rules of international law. On its surface, the opinion concerns states rather than the private sector, but its implications for private actors may be significant and wide-ranging. The opinion confirms a trend towards greater recognition of climate obligations from international courts, perhaps in contrast to broader political sentiment moving in the opposite direction in many jurisdictions, with similar advisory opinions issued by the International Tribunal for the Law of the Sea (ITLOS) in 2024 and the Inter-American Court of Human Rights (IACtHR) earlier in July. Read the full briefing as issued by the Centre for Climate Engagement to learn more.

Key considerations for boards:

• Although nonbinding, ICJ advisory opinions can shape international and domestic law, leading to new regulations and informing court decisions that can ultimately affect boards. Their influence on businesses is indirect, but can be wide-ranging and significant.
• 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. Boards should be conscious of how both regulatory and legal responses might vary in jurisdictions across their business’ value chain.
• 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. This not only presents a regulatory risk to fossil fuel companies, but could also impact any business which consumes fossil fuels.
• 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. Boards can observe, and even help shape, these conversations.
• Regardless of how impacts materialise, boards can ensure resilience to potential risks by monitoring responses from governments, strengthening board-level understanding of climate change issues, and reinforcing climate-related risk management.