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The document argues that investment treaties function as 'unpriced public insurance' that shifts political and regulatory risks from private investors to host states. Unlike other de-risking tools like political risk insurance or blended finance, treaties often lack pricing mechanisms, performance benchmarks, or environmental and human rights safeguards. This creates an asymmetrical regime where host states face substantial downside risks and contingent fiscal liabilities, which can be exacerbated by large investor-state dispute settlement (ISDS) awards. The authors recommend that policy-makers assess treaties alongside other risk-allocation tools, terminate redundant agreements, and coordinate across finance ministries and development banks to prevent 'double recovery' and ensure transparent risk sharing.

The document proposes a functional shift in how investment treaties are viewed, categorizing them as a form of 'unpriced public insurance' that transfers political and regulatory risks from private investors to host states. It argues that unlike other de-risking tools, treaties often lack performance conditions or sustainability safeguards, creating asymmetric financial burdens for states, particularly in the Global South. The brief recommends that policymakers evaluate treaties alongside other risk-mitigation tools to avoid redundancies and ensure that investment governance supports climate transitions and public accountability.