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Synergising Foreign Investor and State Climate and Environmental Priorities

Investor–State Dispute Settlement (ISDS) mechanisms, embedded in many international investment agreements (IIAs), were originally intended to protect foreign investors. However, in their current form, these mechanisms have increasingly been viewed as obstacles to environmental protection, public health, human rights, and climate action. The ISDS system has enabled fossil fuel investors to claim billions from states for climate-related regulations, reinforcing high-carbon investments and limiting governments’ capacity to pursue sustainable development.

The CGM webinar series brought together thought leaders in international law, human rights, and sustainable investment to explore how ISDS must evolve to support—rather than hinder—the net-zero transition and responsible corporate behaviour.

 

Across three sessions, the series featured:

 

  • Toby Landau KC, Barrister, Advocate and Arbitrator, Duxton Hill Chambers

  • Lisa Sachs, Director, Columbia Center on Sustainable Investment

  • Astrid Puentes Riaño, UN Special Rapporteur on the human right to a clean, healthy and sustainable environment

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Moderated by Elizabeth Wu, Lead Advisor, Environmental Justice and Transnational Governance, Climate Governance Malaysia, the series unpacked the ISDS regime, assessed reform efforts, and examined legal and policy levers to better align investment frameworks with sustainability goals.

The first session, held on 28 October 2025, examined the misalignment between ISDS mechanisms and climate-focused dispute resolution. Toby Landau KC traced the historical development of ISDS and highlighted the challenges of addressing public-interest cases within current arbitral frameworks. The session explored potential reform pathways, including treaty recalibration and the establishment of an international investment court, while emphasizing the cultural and professional shifts required within the arbitration community.

This session assessed whether IIAs and ISDS mechanisms effectively drive green investment in ASEAN. Lisa Sachs provided a critical evaluation of these treaties and explored alternative legal frameworks better suited to advancing climate action and a just transition. Key topics included new-generation IIAs, corporate environmental obligations, climate-risk classification, and project-level opt-outs from ISDS, alongside emerging concerns involving AI, labour rights, and third-party funding. She also shared insights from her professional journey and recommendations for academics, policymakers, businesses, and civil society.

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Part 1: IIA and ISDS – Misalignment with Paris Agreement Goals, Depoliticisation and System Transformation?

Part 2: Legal Levers to Facilitate Green Investment in ASEAN – What’s Working, What’s Not, and the Way Forward

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Part 3: How IIAs and ISDS Can Interfere With the Right to a Clean, Healthy and Sustainable Environment

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This session assessed whether IIAs and ISDS mechanisms effectively drive green investment in ASEAN. Lisa Sachs provided a critical evaluation of these treaties and explored alternative legal frameworks better suited to advancing climate action and a just transition. Key topics included new-generation IIAs, corporate environmental obligations, climate-risk classification, and project-level opt-outs from ISDS, alongside emerging concerns involving AI, labour rights, and third-party funding. She also shared insights from her professional journey and recommendations for academics, policymakers, businesses, and civil society.

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