The ICJ’s landmark advisory opinion: a new legal baseline for climate action

On July 23, the International Court of Justice (ICJ) – dubbed the World Court –  has unanimously affirmed that states have binding legal obligations under international law to address climate change, including a crucial mandate to regulate the greenhouse gas (GHG) emissions of private entities under their jurisdiction. While the ICJ’s opinion is directed at states, its implications for the corporate sector are profound.

For business leaders, this sets a new legal and operational baseline. Companies  should anticipate increased regulatory scrutiny, more stringent due diligence requirements, and a redefinition of corporate responsibilities to encompass climate risk as both a material financial concern and a human rights issue. In light of the heightened regulatory uncertainty observed since earlier this year, this landmark Advisory Opinion necessitates proactive leadership within the private sector, offering substantial competitive advantages for adaptable organizations.

Understanding the ICJ advisory opinion: a new era for climate law

The ICJ’s advisory opinion, requested by the UN General Assembly in response to a 2019 campaign launched by 27 law students in the Pacific Islands, marks a pivotal moment in international climate law. Its unanimous adoption by the fifteen judges, a rare event, gives it persuasive authority and political legitimacy. Key findings include: 

• States have binding obligations under international law, derived from treaties such as the UNFCCC, Kyoto Protocol, and Paris Agreement, as well as customary international and human rights law, to protect the climate system.
• A stringent due diligence standard now applies, requiring states to use “all means at their disposal” to prevent activities from causing “significant harm” within their jurisdiction. This includes regulating private sector emissions. Failing to do so may constitute a wrongful act under international law.
• The 1.5°C target is reaffirmed as the primary legal threshold, and states must submit Nationally Determined Contributions (NDCs) that reflect their “highest possible ambition.”
• Support for fossil fuels or regulatory inaction may result in international legal responsibility, exposing states, and potentially companies operating under their jurisdiction, to legal consequences such as cessation of harmful activities and reparations.

Corporate climate action after the ICJ ruling

The ICJ’s finding that a state’s failure to regulate private-sector GHG emissions may constitute a wrongful act raises the likelihood of tighter domestic climate regulation. In practice this may lead to: 

• Stricter enforcement of corporate climate disclosure and GHG reporting obligations, including mandatory emissions accounting across scopes 1, 2, and 3.
• Expanded climate due diligence requirements across supply chains, financing, and operational activities.
• Heightened legal exposure for companies that fail to assess, mitigate, or disclose material climate-related risks.

However, the ICJ’s Advisory Opinion comes at a time of political resistance and increased regulatory pushback globally, as evidenced by the EU Omnibus Simplification package. It thus remains to be seen how the clear language of the Advisory Opinion will be reflected in national policy.

Navigating the new landscape: recommendations for businesses

While it is up to national governments to translate the Advisory Opinion into legislation, companies should not wait. Regulatory uncertainty is not a reason for delay, it is a signal to lead. Businesses that act early can future-proof their operations and differentiate themselves in a tightening compliance environment.

1. Build a science-aligned climate strategy 

The ICJ has elevated the 1.5°C target as a binding international obligation. Businesses should ensure their own goals match this legal and scientific benchmark.

• Set Science-Based Targets (SBTi) across scopes 1, 2, and 3, with transparent timelines.
• Move from high-level pledges to actionable decarbonization pathways.

This moves beyond vague pledges to verifiable progress, requiring significant organizational change, and leading the business on a resilient path to future growth.

2. Expand climate due diligence across the value chain 

The ICJ emphasizes that states must use “all means at their disposal” to prevent climate harm, implying a need for full-spectrum oversight of corporate activities.

• Assess human rights impacts and climate risks across operations, supply chains, and financing.
• Integrate climate into enterprise risk and due diligence systems.

This ensures businesses are aligned with evolving legal expectations and reduces exposure to liability, reputational harm, and supply chain disruption.

3. Disclose transparently under leading frameworks 

With regulatory enforcement likely to intensify, proactive climate reporting will be essential for both compliance and credibility.

• Report using frameworks like CSRD, TCFD, ISSB, and GRI to anticipate regulatory expectations.
• Use disclosures to communicate clearly and build stakeholder trust, reducing greenwashing risk.

This prepares businesses for scrutiny from regulators, investors, and customers, while positioning them as credible actors in the transition to a low-carbon economy.

Conclusion: the imperative for action

The ICJ’s advisory opinion unequivocally establishes climate action as a binding legal obligation for states, with direct and profound implications for the private sector. This landmark ruling provides new leverage for climate litigation against both states and corporations, reinforcing the scientific basis for attributing emissions and assigning responsibility.

Businesses that proactively embrace and anticipate this new legal reality, integrate comprehensive climate action into their core strategy, and demonstrate transparent leadership will not only mitigate significant legal and financial risks but also unlock substantial competitive advantages. They will enhance stakeholder trust, build long-term resilience, and create enduring value in a rapidly decarbonizing world. The ICJ’s message is clear and compelling: the time for decisive climate action is now.