Climate Obligations at a Crossroads: The ICJ’s Advisory Opinion and what it means for States and businesses

Introduction

On 23 July 2025, the International Court of Justice (“ICJ”) delivered its highly anticipated Advisory Opinion on the Obligations of States in respect of Climate Change (the “Advisory Opinion”) (available here).  The Advisory Opinion has been described as a historic turning point in relation to climate justice and accountability. Others have questioned whether it will make any real difference, primarily due to the difficulties of enforcing international law.

The Advisory Opinion anchors itself firmly to the science of climate change and the Paris Agreement’s collective temperature goal to limit global warming to 1.5°C. How States react to this will reveal much about the role and influence of international institutions in a changing world order.  The most immediate test will be the second round of Nationally Determined Contributions (“NDCs”) submitted prior to UN COP 30 to be held in November this year in Belem, Brazil. The level of ambition and supporting detail set out in the NDCs will reflect how States have interpreted the obligations set out in the Advisory Opinion, including the precautionary principle and the stringent standard of due diligence required to protect the climate system.

Responding to questions posed by the UN General Assembly through resolution 77/276, the ICJ unanimously confirmed that:

1. States have obligations – in accordance with their common but differentiated responsibilities and respective capabilities – to adopt measures to prevent, mitigate, and remedy climate harms.
2. Those duties derive from a number of different legal sources, including not only the Charter of the United Nations, climate change treaties (including the UN Framework Convention on Climate Change (“UNFCCC”), the Kyoto Protocol and the Paris Agreement), but also the UN Convention on the Law of the Sea (“UNCLOS”), as well as other relevant environmental treaties, customary international law and international human rights law.
3. States have a duty to co-operate with each other to meet their obligations.
4. The breach of these obligations could result in consequences such as reparations (including restitution, compensation and/or satisfaction), guarantees of non-repetition and the cessation of wrongful acts.

We have provided a comprehensive summary of the Advisory Opinion in our article available here.

This article focuses specifically on:

1. The standard of due diligence and the second round of NDCs;
2. The duty on States to cooperate; and
3. The concrete measures the ICJ encouraged States to pursue going forward, and how carbon pricing might play a role in achieving some of the principles articulated in the Advisory Opinion.

Due diligence and NDCs

The Advisory Opinion recognises that the standard of due diligence for preventing significant harm to the climate system is stringent and that a heightened degree of vigilance and prevention is required (paragraph 138).

The first round of NDCs submitted in 2020 have been criticised on the basis that they were not sufficient to meet the 1.5°C Paris Agreement temperature goal. Moreover, the climate pledges they contained were based on unrealistic expectations of the land sector, the implication being that States were placing the mitigation burden on to the land sector thus endangering food security and biodiversity.^[1]

The approach taken by States to prepare their second round of NDCs in 2025 and the level of detail used to support the climate pledges and approach to be taken in respect of land use will be informative, including steps taken to phase out fossil fuel emissions and land-use change.

The duty to cooperate

At present the Paris Agreement’s climate goals remain stalled by unpriced greenhouse gas emissions, a multi-trillion-dollar finance gap, and disputes over cost-sharing.

In line with the customary rules of treaty interpretation, the level of financial support that must be provided by States must be interpreted in light of other provisions in the Paris Agreement, including the collective temperature goal to limit global warming to 1.5°C. Accordingly, parties are to implement their financial obligations in a manner that enables global warming to be limited to 1.5°C (paragraph 224).

The Advisory Opinion confirms that the climate system is a resource shared by all States (paragraph 261). Co-operation between States is the very foundation of meaningful international efforts with respect to climate change and State co-operation is a paramount principle in solving global problems (paragraph 302).

To achieve the collective temperature goal in the Paris Agreement will require an unprecedented level of cooperation and collaboration between States. New economic concepts and policies will be required to overcome market failures and address the systemic risks in the existing financial system.

Concrete obligations / duties arising from the advisory Opinion

The ICJ articulated that States must:

1. Prepare, communicate, and maintain successive and progressive NDCs, aimed at achieving the temperature goal of limiting global warming to 1.5°C above pre-industrial levels;
2. Act in good faith on mitigation, adaptation, and cooperate via finance and technology transfers, as mandated by the Paris Agreement and customary law;
3. Utilise all means at their disposal to prevent significant harm from climate change, a customary law duty requiring precautionary, science-based actions—including environmental impact assessments and regulation of emissions throughout jurisdiction;
4. Promote studies, research, information sharing, and scientific criteria for regulation and assessments; and
5. Uphold both substantive (e.g., right to a healthy environment) and procedural rights (public access to information, participation, climate change education).

Carbon pricing and interoperability

One obvious way to implement many of the legal principles identified in the Advisory Opinion, is for States to develop a unified global approach to carbon pricing.  The World Bank has reported that in 2025 80 emissions trading and carbon taxes have been implemented and that 28% of global emissions are covered by a direct carbon price.^[2]  

At present national carbon pricing systems, such as the EU Carbon Border Adjustment Mechanism, have different ways of measuring how carbon should be priced. This leads to problems. As a recent report by IETA^[3] has recognised:

“Without a shared framework or mutual recognition mechanisms, the proliferation of CBAM-like instruments could lead to regulatory fragmentation, double compliance burdens, and trade frictions. Questions of methodological alignment, verification standards, and scope compatibility will be at the heart of future interoperability discussions.”

Countries will need to co-operate and design a framework that delivers “interoperability” between different national carbon pricing regimes. Ultimately, to ensure that global warming is limited to 1.5°C, a joined up international approach to carbon pricing is needed.

Looking ahead to COP30

The Advisory Opinion follows multiple international court decisions relating to climate change matters, including:

1. The Advisory Opinion of the International Tribunal for the Law of the Sea regarding specific obligations on States arising from UNCLOS (dated 21 May 2024 and available here); and
2. The Advisory Opinion of the Inter-American Court of Human Rights concerning State obligations in response to the climate emergency (dated 29 May 2025 and available here).

Following this trilogy of Advisory Opinions,  COP30 will mark 20 years since the entry into force of the Kyoto Protocol and the tenth anniversary of the adoption of the Paris Agreement. At COP30, world leaders, policymakers, civil society organisations and companies will convene to discuss and agree measures to combat the climate crisis. 

Parties will discuss raising public and private climate finance to USD 1.3 trillion per year by 2035 (up from the existing USD 300 billion target) via the “Baku to Belém Roadmap to 1.3T” to support developing countries to achieve low emission climate resilient measures.  Additionally, Brazil is aiming to launch the “Tropical Forest Forever Facility”, a USD 125 billion blended-finance fund to reward tropical forest conservation, with payouts from 2026.

COP30 is expected to pivot to practical and tangible measures, and is supposed to serve as a “COP of implementation”, related to capital mobilisation from private and public resources, the development of capacity building plans, and taking stock of the second round of NDCs, with one COP30 presidency representative having stated “negotiations are over; this is a call for action”.

Against these developments, businesses should monitor changes in regulation, supply chain dynamics, and climate-related legal expectations, as COP30 may set the stage for increased corporate obligations in the future.

Summary

The Advisory Opinion is not formally legally binding, but it possesses considerable legal and moral weight and should therefore play a significant role in shaping and clarifying international law given the detail in which it has outlined States’ legal obligations in combating the climate crisis.  It remains a new, yet seminal, development in the evolution of climate change litigation. Although not ideal, the zero-sum outcome of legal cases can nevertheless drive stakeholders towards a common purpose, achieving the Paris Agreement’s collective temperature goal.

The Advisory Opinion forms part of the growing trend in which States are coming under heightened legal and reputational pressure to meet climate duties, and it highlights the existence of obligations on States to exercise due diligence that are ‘indeterminate, multifactorial and evolutive in nature’.

Businesses should likewise anticipate more stringent national and international expectations (regulatory, financial, due diligence). This may, in turn, give rise to increased climate litigation against private companies.

The authors would like to thank Dion Davis, Trainee Solicitor, for her contribution to this article.

^[1] Over-reliance on land for carbon dioxide removal in net-zero climate pledges by Kate Dooley and others published 23 October 2024 https://landgap.org/downloads/2024/s41467-024-53466-0.pdf

^[2] World Bank Group 2025 State and trends of carbon pricing https://www.worldbank.org/en/publication/state-and-trends-of-carbon-pricing

^[3] IETA Evolution of global response to EU CBAMhttps://www.ieta.org/uploads/wp-content/Resources/Reports/IETA_Report_CBAM-2025_FINAL2.pdf