Submission to the OECD Public Consultation on Possible Positive Contributions of Investment Agreements to Achieving Climate and Environmental Goals

The International Institute for Sustainable Development (IISD) submitted a statement to the OECD in September 2025 proposing a 'problem-driven' approach to investment treaty design. The document argues that investment treaties should evolve from static instruments of investor protection into active tools that support states' binding climate obligations, as highlighted by a July 2025 International Court of Justice (ICJ) Advisory Opinion. IISD suggests a three-step framework: assessing the realistic capabilities and limitations of treaties, identifying specific climate-related policy problems (such as energy sector bottlenecks and fossil fuel subsidy reform), and determining specific avenues for positive contribution, including transparency requirements and mandatory responsible business conduct for investors.

• The International Court of Justice (ICJ) issued an Advisory Opinion in July 2025 stating that international law requires states to implement ambitious, science-based measures to mitigate climate change, which includes regulating private actors, ending harmful subsidies, and phasing out fossil fuel production.
• IISD argues that traditional investment treaties, which focus on protecting foreign investors to catalyze investment, are based on inconclusive empirical evidence and often create costs through investorstate dispute settlement and unbalanced obligations.
• Investment treaties should not be the primary tool for investment liberalization or direct financial incentives, as domestic or regional frameworks are more flexible and responsive for removing restrictions on green technology or managing fiscal instruments.
• In the energy sector, investment treaties could address specific bottlenecks such as fragmented permitting for renewables, inconsistent cross-border power market rules, and uncertainty regarding long-term power purchase agreements.
• Investment treaties can contribute positively to climate goals by mandating transparency, such as the public disclosure of investment contracts and environmental impact assessments, and by establishing shared norms for fossil fuel subsidy reform and just transitions.
• Reimagined treaties should incorporate binding obligations for foreign investors to follow responsible business conduct standards, such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, to help states meet their duty to prevent transboundary harm.
• Treaties may facilitate cross-border climate cooperation by coordinating approval processes for transboundary infrastructure, harmonizing regulatory standards, or creating joint institutions like regional guarantee facilities.

APA

International Institute for Sustainable Development (2025). Submission to the OECD Public Consultation on Possible Positive Contributions of Investment Agreements to Achieving Climate and Environmental Goals. https://www.iisd.org/system/files/2025-09/iisd-submission-oecd-investment-consultation.pdf

Chicago

International Institute for Sustainable Development. Submission to the OECD Public Consultation on Possible Positive Contributions of Investment Agreements to Achieving Climate and Environmental Goals. 2025. https://www.iisd.org/system/files/2025-09/iisd-submission-oecd-investment-consultation.pdf.

Wikipedia

{{cite press release |author=International Institute for Sustainable Development |title=Submission to the OECD Public Consultation on Possible Positive Contributions of Investment Agreements to Achieving Climate and Environmental Goals |date=1 September 2025 |url=https://www.iisd.org/system/files/2025-09/iisd-submission-oecd-investment-consultation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{internationalinstituteforsustainabledevelopment2025submission, author = {{International Institute for Sustainable Development}}, title = {{Submission to the OECD Public Consultation on Possible Positive Contributions of Investment Agreements to Achieving Climate and Environmental Goals}}, publisher = {International Institute for Sustainable Development}, year = {2025}, month = sep, url = {https://www.iisd.org/system/files/2025-09/iisd-submission-oecd-investment-consultation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }