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Impact of ICJ and IACtHR advisory opinions on the oil and gas sector10 September 2025

The Inter-American Court of Human Rights (“IACtHR”) and the International Court of Justice (“ICJ”) have both recently issued landmark advisory opinions addressing state obligations regarding climate change. These opinions aim to clarify the scope of states’ duties in mitigating climate change. Although directed at state actors, these opinions may have a ripple effect across the private sector. In this article, we look at the potential impact on business globally and specifically on the oil and gas sector.

At the outset, it is important to note that these are advisory opinions and not binding judgments. While they may influence the development of international law, states are not legally obliged to follow them. In practice, the advisory opinions of the ICJ, IACtHR and other international courts are often ignored, or states argue that they are already being complied with through existing measures, and their impact on business regulation may be limited or delayed. The influence of these opinions will also vary depending on the jurisdiction. The opinion of the IACtHR, for example, will likely have a more direct influence on states that have ratified the American Convention on Human Rights.

Key takeaways for the oil and gas sector

i. Emphasis on due diligence – states are obliged to ensure that all relevant information is gathered and taken into account in climate-related decision making.

"For states party to the Paris Agreement, the ICJ held that due diligence obligations include implementing domestic measures to achieve the objectives of their Nationally Determined Contributions."

For states party to the Paris Agreement, the ICJ held that due diligence obligations include implementing domestic measures to achieve the objectives of their Nationally Determined Contributions. States that are not party to the Paris Agreement (e.g. the United States from January 2026), still have a duty to exercise stringent due diligence to prevent substantial harm to the environment, including harm to the climate system. The ICJ noted that this includes the obligation of states to regulate the activities of private actors.

The IACtHR went further than the ICJ, requiring “enhanced due diligence” in the context of the climate emergency. Further, it confirmed that human rights and environmental due diligence obligations extend to companies. The court stated that businesses should be required to take measures to reduce emissions, to contribute to climate mitigation targets and to disclose GHG emissions across their value chains. States must implement domestic laws requiring these actions.

The ICJ held that states could breach their due diligence obligations through enabling fossil fuel production and consumption, granting fossil fuel exploration licenses and providing fossil fuel subsidies. The IACtHR specified that states must enforce stricter oversight for enterprises with high current and cumulative emissions, including those involved in “exploration, extraction, transportation and processing of fossil fuels”.

ii. Disclosure – both states and businesses face an increase in climate-related disclosure and reporting obligations.

The ICJ did not go into detail on the issue of disclosures, however the IACtHR considered it in depth. The IACtHR held that states are required to apply the principle of “maximum disclosure” regarding environmental and climate risk, especially in relation to natural resource exploration and exploitation – i.e. all information should be accessible to the public.

"The IACtHR also found that states should ensure that businesses disclose information on the climate impacts of their activities."

The IACtHR also found that states should ensure that businesses disclose information on the climate impacts of their activities. This includes sufficient information to evaluate the adequacy of measures adopted to prevent human rights violations in the context of the “climate emergency”, the emissions footprint of their products and services, and the effects of high-emission projects.

iii. Sustainable development – navigating the path between sustainable development for developing nations vs climate obligations of developed nations.

The ICJ held that a state’s climate obligations should be interpreted through the principles of:

common but differentiated responsibilities – the measures which can be expected with respect to addressing climate change are not the same for all states (and there is a particular differential basis on whether the state is classed as an Annex 1 country or not for purposes of the UNFCCC); and
sustainable development – the measures taken by states should be guided by the objective of sustainable development.

Although not covered in depth in the main ICJ opinion, the separate opinion of Judge Xue specifically mentions the right to sustainable development and clarifies that this right remains but must be exercised on a sustainable basis. There has already been a move away from investment in oil & gas related development by developed countries into states which still have development needs to meet. However, the ICJ opinion suggests that this must be replaced by other forms of support, including technology transfer, to support sustainable development. Without this, non-Annex 1 countries may struggle to balance their duties in relation to climate change vs other human rights-based duties towards their populations, including those embodied in the UN’s 17 Sustainable Development Goals.

iv. Climate litigation – increased litigation risk for both states and businesses.

The ICJ and IACtHR opinions will likely strengthen the legal basis for climate litigation in domestic, regional and international courts. The ICJ clarified what may constitute an internationally wrongful act by a state and articulated the legal test for causation with respect to harms caused by climate change. These, together with findings in relation to due diligence and transparency, potentially remove some hurdles to setting out the basis for claims against states and companies who cannot show that they are clearly within the bounds of the law. Already, on 20 August 2025, Milieudefensie sent a letter to 28 companies calling upon them to submit their climate plans by the end of September, citing the ICJ opinion and threatening legal action.

Conclusion

The advisory opinions of the ICJ and the IACtHR provide a useful overview of the legal framing of climate change obligations. The jury is out on how influential these opinions will be. Each case will still need to be decided on its own particular facts. However, they do provide authoritative interpretations of international law that are likely to shape corporate accountability, regulatory developments and future climate litigation. Businesses in high-emission sectors such as oil and gas, can expect greater scrutiny of their activities, enhanced due diligence requirements and transparency obligations as a result. Businesses which start to integrate those requirements into operations now will be better equipped to meet emerging legal challenges as they develop.

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