The World Court’s Landmark Climate Ruling: Big Bark, Little Bite?

Climate litigation is accelerating globally. Nearly 3,000 cases filed across 60 countries. This trend found its way to the world’s highest court, the International Court of Justice (ICJ), which delivered an opinion on July 23^rd that nations may sue for climate-related damages, marking a historic shift in international climate accountability. This opens the door for vulnerable countries, like the Maldives, to seek reparations from major GHG emitters.

But there’s a catch. Like many international agreements, the ICJ’s ruling is non-binding. This leaves those vulnerable nations – which often lack resources – with the burden of pursuing complex litigation against power emitters.

So, what recourse do climate-vulnerable nations have against high emitters? Unfortunately, it’s limited. Imagine Pacific Island nations banding together to sue the US for climate damages. Even if the ICJ finds the US liable, the ruling would only be binding if both accept the court’s authority. Under the current administration, that’s unlikely. The most probable outcome would be increased diplomatic or economic pressure, rather than actual payment. And even that would be a long shot.

Still, the ICJ ruling isn’t without impact. It sets a precedent that may influence domestic lawsuits and investment agreements. Past international rulings have shaped legal and regulatory expectations, increasing pressure on firms and governments to act. We’ve already seen progress in climate litigation, especially in greenwashing cases, where courts have ruled in favour of the plaintiff 70% of the time. Although this likely won’t be market-moving immediately, firms with international footprints should take note.