The ICJ's Climate Opinion: What It Means for Business

By Tan Sri Tommy Thomas, Attorney General: 2018-2020

Elizabeth Wu, Lawyer, Environmental Justice and Transnational Governance

Kiu Jia Yaw, Sustainable Development Lawyer, Kiu & Co

On 11 August 2025, Climate Governance Malaysia (CGM) and Kiu & Co co-organised an online fireside chat session examining the landmark advisory opinion of the International Court of Justice (ICJ) delivered on 23 July 2025. The opinion addresses states’ obligations under international law in relation to climate change, for which the legal consequences, and the potential implications for national governance and corporate accountability were explored during the session.

Tan Sri Tommy Thomas opened his remarks by outlining the significance of the ICJ’s advisory opinion. Although the opinion is not legally binding, he noted that it represents the most current and authoritative judicial interpretation of states’ climate obligations, delivered unanimously by judges from across the world – marking only the fifth time the ICJ has reached a unanimous decision. He traced the origins of the advisory opinion to a 2019 grassroots movement in Vanuatu, which ultimately led to the UN General Assembly’s 2023 request for the ICJ to clarify states’ duties under international law in addressing climate change and the consequences if those duties are not met.

He summarised the ICJ’s key findings, highlighting that states have obligations under international treaties such as the United Nations Framework Convention on Climate Change, Kyoto Protocol, and the Paris Agreement. Additionally, the Court affirmed that under customary international law, states have a duty to prevent significant harm, alongside obligations under human rights law to safeguard environmental rights. Significantly, the ICJ held that failure to fulfill these obligations constitutes an internationally wrongful act which carries legal consequences including the cessation of wrongful conduct, assurances of non-repetition, and full reparation provided that a direct causal link between the wrongful act and harm can be established. 

Concluding his remarks, Tan Sri Tommy Thomas highlighted a quote from Judge Yuji Iwasawa, President of the Court, emphasizing the legal issues raised by the General Assembly reflect a serious global threat to the planet’s health. While international law plays a crucial role, it alone cannot resolve the issue. A full solution needs cooperation across different fields and, most importantly, the commitment of governments and people to change current behaviors to protect future generations.

Following this, Elizabeth Wu offered her perspective on the broader implications of the Advisory opinion for global climate litigation. She highlighted that by clearly defining states’ obligations to address climate change, the opinion is likely to drive an increase in litigation by private actors against governments over inadequate climate action. She pointed out that the court’s emphasis on the 1.5°C target sets a clear legal standard, making it harder for states to defend climate policies that fall short and thus giving a strong basis for legal action. 

As states incorporate these international duties into domestic laws, legal challenges targeting corporations are expected to rise. This includes holding parent companies accountable for environmental harm caused by their subsidiaries abroad, resulting in more cross-border litigation. A notable example she cited is a company being sued in Swiss courts for climate-related impacts occurring in Indonesia, demonstrating how such cases challenge jurisdictional limits and corporate responsibilities beyond national borders. At the same time, growing legal pressure to regulate emissions is expected to drive new regulatory measures for corporations. Meanwhile, the opinion could also be used to support lawsuits against high-emitting companies for violating human rights and environmental laws. Linking climate change to these rights could prompt more cases claiming that government inaction violates citizens’ rights to life, health and a healthy environment.

The opinion may also impact investor-state dispute settlements by allowing states to defend climate policies against foreign investor claims, potentially prompting changes to investor protections conflicting with climate action. However, Elizabeth noted the ICJ opinion missed an opportunity to address the link between investment law and climate change, unlike the clearer stance of the Inter-American Court of Human Rights. This area remains evolving. She noted this area is still developing and may evolve.

She also emphasized that the opinion supports the principle of common but differentiated responsibilities, meaning developed countries with more resources have greater duties in climate governance. As a result, this principle may lead to more legal disputes between states. In fact, she also mentioned that some countries, like Fiji, have already used the opinion as a strong legal foundation to promote climate action, back legal challenges, and influence international climate law. This shows how the opinion is shaping national legal and diplomatic strategies and may increase interstate litigation.

Building on these points, Kiu Jia Yaw reflected that while the ICJ opinion directly addresses state obligations, it quickly extends to the private sector by setting clear standards of duty of care. Following this, he explained that the opinion clarifies how unlawful government acts or omissions, such as approving fossil fuel projects or lacking climate governance, can be linked to environmental harm. The obligations apply universally but vary depending on each state’s capabilities and responsibilities.

Focusing on Malaysia, Kiu addressed the recent revision of the National Climate Policy 2.0 and the upcoming Climate Change Bill, which remains under public consultation. He emphasized that the ICJ advisory opinion establishes a crucial legal benchmark for this national legislation, underscoring the need for an all-of-government and all-of-nation approach to climate governance. Such a comprehensive framework is essential to provide clear guidance for the private sector in fulfilling their legal duties and responsibilities. Kiu also mentioned Malaysia’s upcoming National Action Plan on Business and Human Rights, which will clarify the obligations of businesses to respect human rights within their operations.

Following their reflections, the speakers engaged in an open discussion that included questions from the audience. They explored important topics such as the integration of international law into Malaysia’s legal system, the need to strengthen legal capacity for environmental and climate justice, and improving access to environmental justice. The discussion also addressed the evolving duties of company directors amid changing legal standards, highlighting the shift from voluntary to mandatory ESG obligations and the importance of proactive leadership in climate action.

To conclude the session, the panelists shared a few final remarks. Starting by urging individual commitment, Tan Sri Tommy Thomas called on the public to take personal responsibility and commit to environmental stewardship. Elizabeth Wu highlighted a global shift toward stronger climate accountability, pointing to more progressive standards set by courts like the Inter-American Court of Human Rights. Meanwhile, Kiu Jia Yaw underscored the vital role of partnership, collective action, and solidarity in effectively addressing the complex challenges of climate change. Together, their closing remarks reinforced the importance of unified efforts and shared responsibility in advancing meaningful climate action.

To further support understanding of the ICJ Advisory Opinion and its impact on Malaysia, Kiu & Co will host an in-person seminar titled "The ICJ Advisory Opinion on Climate Change and What It Means for Malaysia" on August 19 in Kuala Lumpur. For more details, please visit Kiu & Co’s website. Click here for the recording.