The International Investment Legal Regime, Climate Change, and Human Rights: An Overview

The document examines how the Investor-State Dispute Settlement (ISDS) system enables foreign investors, particularly from the fossil fuel industry, to claim compensation from states for climate policies. It highlights the 'regulatory chill' effect, where the threat of costly awards—which have increased from an average of $25 million (1994-2003) to over $250 million (2014-2023)—deters governments from phasing out fossil fuels. The briefing references July 2025 advisory opinions from the International Court of Justice and the Inter-American Court of Human Rights to affirm state duties to regulate polluting conduct. It concludes that current reform efforts, including the EU and UK withdrawals from the Energy Charter Treaty (ECT), are insufficient due to sunset clauses and inadequate carve-outs, and recommends coordinated UN-level action to eliminate ISDS threats to climate and human rights obligations.

• The Investor-State Dispute Settlement (ISDS) system allows foreign investors to bypass national courts and sue states before supranational panels, often resulting in massive financial awards that lack a basis in precedent or appeal.
• ISDS awards have seen a significant increase in value, rising from an average of $25 million between 1994 and 2003 to more than $250 million between 2014 and 2023.

APA

Reisch, N., Mingrone, F., & Sky, M. B. (2025). The International Investment Legal Regime, Climate Change, and Human Rights: An Overview. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2025/10/International_Investment_Legal_Regime_Climate_Change_and_Human_Rights_An_Overview.pdf

Chicago

Reisch, Nikki, Francesca Mingrone, and Melissa Blue Sky. The International Investment Legal Regime, Climate Change, and Human Rights: An Overview. Center for International Environmental Law, 2025. https://www.ciel.org/wp-content/uploads/2025/10/International_Investment_Legal_Regime_Climate_Change_and_Human_Rights_An_Overview.pdf.

Wikipedia

{{cite report |last1=Reisch |first1=Nikki |last2=Mingrone |first2=Francesca |last3=Sky |first3=Melissa Blue |title=The International Investment Legal Regime, Climate Change, and Human Rights: An Overview |publisher=Center for International Environmental Law |date=October 2025 |url=https://www.ciel.org/wp-content/uploads/2025/10/International_Investment_Legal_Regime_Climate_Change_and_Human_Rights_An_Overview.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reisch2025international, author = {Reisch, Nikki and Mingrone, Francesca and Sky, Melissa Blue}, title = {{The International Investment Legal Regime, Climate Change, and Human Rights: An Overview}}, institution = {Center for International Environmental Law}, year = {2025}, month = oct, url = {https://www.ciel.org/wp-content/uploads/2025/10/International_Investment_Legal_Regime_Climate_Change_and_Human_Rights_An_Overview.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }