Mark Hinnells, director of Susenco Consulting Ltd, ponders the implications of the ICJ Advisory Opinion on Obligations of States in respect of Climate Change 

On 23rd July the International Court of Justice CJ passed an Advisory Opinion on Obligations of States in respect of Climate Change. 

The opinion has clearly not been issued in isolation. It sits alongside a history of Intergovernmental Panel on Climate Change (IPCC) reports published since 1990, with increasingly urgent scientific evidence. It supports the Paris Agreement 2015 targets to limit warming to 1.5 to 2 degrees Celsius, implying a halving of greenhouse gas emissions by 2030, and net zero emissions by mid-century. Governments are currently in their third round of making Nationally Declared Contributions (NDCs) towards the Paris Agreement. 

At the corporate level the opinion complements reporting obligations on climate change impacts, risks and opportunities, required of most listed companies by most stock exchanges, as well as a range of mechanisms to price emissions, including carbon taxes or trading schemes. There 1,989 cases of current or previous litigation relating to climate in the US, and 1,129 across 55 countries in the rest of the world . The opinion could be material in current and future cases. 

In that context there are implications both for international and national UK policy.  

A summary of the judgement 

The judgement sets out: 

• A right to a clean, healthy and sustainable environment is a fundamental human right. Climate change is an ‘urgent and existential threat’ to humanity and the planet. • States are legally obligated to prevent significant harm, in good faith and with urgency, and co-operate to address it.
• Failing to deliver strong policy to contribute towards the Paris Agreement, or to regulate private actors, could constitute a wrongful act under international law.
• Responsible states may be required to provide reparations (restitution, compensation and satisfaction) to injured states or parties.
• Greenhouse gas emissions have no borders: states may be held responsible even for emissions that harm people beyond their borders. Emissions are also cumulative.
• Though non-binding, the opinion carries moral and legal weight.

International implications 

The main effect, therefore, is to increase legal jeopardy for governments or corporates who ignore the need to act. That said, while all 193 UN member states are automatically parties to the ICJ Statute, the US, Russia, China and Iran are among countries who do not fully support or recognise the ICJ, and are four of the largest polluters or exporters of fossil fuel. Of those, only China is showing real leadership on climate issues. 

As of now, the second round of NDCs proposed by signatories to the Paris Agreement achieve only a 2% reduction in emissions and risk an estimated 2.6-2.8 degrees Celsius temperature rise. A 43% reduction is needed from signatory NDCs, due before COP30 in November, to achieve the 1.5 degree Celsius goal. Arguably, the real intent of the opinion, coming as it does now, is to nudge governments to make meaningful policy in their third round of NDCs towards the Paris Agreement. 

In addition, governments collectively will come under pressure at COP30 and beyond to spend more on the New Collective Quantified Goal (NCQG) – a key element of the Paris Agreement – to support developing countries in their climate actions. 

There will also be more pressure on common mechanisms developed by the International Civil Aviation Authority (ICAO) and the International Maritime Organisation (IMO) to reduce emissions from international aviation and shipping, which sit outside the NDC process and are almost in the ownership of trade bodies, with particular criticism aimed at the Carbon Offset and Reduction Scheme for International Aviation (CORSIA), which is not Paris Agreement compliant. 

Financial markets such as stock exchanges, plus lending, insurance and pensions products, are international. Pensions in one country can hold globally diverse assets. Large companies trade in more than one jurisdiction. The opinion will build pressure on financial markets, both through IFRS reporting obligations and in the reconsideration of Fiduciary Duty owed by a decision maker to an investor in the context of climate change, where the opinion will influence best practice. 

The opinion will build pressure on commercial valuations, especially of oil companies, with significant risk to investors. We simply cannot burn all proven probable and possible fossil fuels, because of the climate impacts: the concept of ‘unburnable carbon’ is more than a decade old. 

Implications for UK policy 

The UK now produces less than 1% of global greenhouse gas emissions, but as the cradle of the industrial revolution the UK has emitted around 3% of all man-made greenhouse gas emissions. 

The UK has been a global leader in policy to decarbonise with the UK Climate Change Act 2008 (as amended), although delivery has not matched ambition and the government has twice been found to be in breach of its targets. The UK Climate Change Committee, set up with a statutory duty to advise government, has as recently as June 2025 confirmed that, for 40% of expected emissions reduction ‘there are either significant risks, or insufficient or unquantified plans’. It is conceivable the UK could fall significantly short of its planned net zero pathway, and thus of its obligations under the Paris Agreement 2015. 

Again, a particular point of pressure will be oil and gas, with implications for decisions on new extraction, both to consent by government or fund by banks or other investors. The opinion will be material for consenting and funding infrastructure (airports, ports, roads, rail etc) which imply additional emissions that are material in the context of UK carbon emissions targets. 

Thus far, human rights cases have been much more likely to find climate change to be a material issue than judgements in commercial cases – and the ICJ opinion continues that well-established theme. Generally, decisions under commercial law recognise boards have competing interests to balance – eg between shareholders, employees, customers and over different timeframes. 

Courts are loathe to interfere with board decisions, regardless of whether the board is in favour of more aggressive ESG or climate action or is seen by shareholders as not progressive enough on ESG and climate action. That relatively laissez faire attitude can only last so long, since international and national targets are now so clear and obligations seen as transnational. The ICJ opinion is another indicator in that trend. 

At some point courts will decide that boards have to meet national and international targets and therefore must make decisions accordingly on reporting, investments, rewards and hiring decisions. In some domains, such as the US, that may be delayed but is unlikely to be avoided. 

In conclusion the ICJ Opinion adds legal opinion to scientific fact in the IPCC reports since 1990, to commitments in the Paris Agreement and to a raft of policy. 

Any dissonance between international or national obligations, targets and delivery – whether that be at government level, board level or under Fiduciary Duty – is going to cause friction. Friction might require advice or arbitration in the first instance, or potentially litigation. At Susenco we would be very pleased to help with finding a resolution. 

Dr Mark Hinnells Energy and Climate Change Expert 
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