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) argues that investment treaties must evolve from static instruments of investor protection into policy tools that address specific climate challenges. The submission outlines 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 subsidies), and determining avenues for positive contributions, including enhancing transparency, requiring responsible business conduct, and facilitating cross-border cooperation.

• Traditional investment treaties based on the assumption that investor protections catalyze development are not supported by conclusive empirical evidence, and their costs—particularly regarding investor-state dispute settlement—have become increasingly apparent.
• Investment treaties should not be the primary tool for investment liberalization or direct financial incentives, as domestic or regional legal frameworks are typically more flexible and responsive for these purposes.
• In the energy sector, treaties could address specific bottlenecks such as fragmented permitting for renewables, inconsistent cross-border power market rules, and uncertainty over the enforceability of long-term power purchase agreements.
• Investment treaties can contribute positively by reinforcing commitments to the public disclosure of investment contracts, financial flows, and environmental and social impact assessments.
• Treaties should incorporate obligations for foreign investors to follow internationally recognized standards, such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, to help states meet their legal duties to prevent transboundary harm.
• Reimagined treaties could facilitate cross-border climate cooperation through the harmonization of regulatory standards, coordination of transboundary infrastructure approvals, and the creation of 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} }