Financing for Sustainable Development in International Investment Law

Authored by Soo-hyun Lee

(Routledge, 2025), ISBN 9781032755625

Reviewed by Harshad Pathak

 

On 23 July 2025, the ICJ delivered a historic advisory opinion on the obligations of states with respect to climate change. It clarified that states have a legal duty to adopt and maintain ambitious climate measures. In her declaration, Judge Cleveland elaborated the implications of this duty for international investment law (IIL), and stressed the need to combat the chilling effect of investor-state dispute settlement (ISDS) proceedings on climate-related regulation. This meant recognising that ‘the interpretation of investment instruments must be informed by States’ obligations in respect of climate change under international law, including the stringent due diligence standard to which States are bound in implementing such obligations. The court’s caution resonated with the advisory opinion issued by the Inter-American Court of Human Rights a few months earlier, which too called upon all stakeholders ‘to foster a balance that allows States to adopt legitimate regulatory measures to address the climate crisis, without undermining the legal certainty and predictability that international investment agreements seek to provide’.