What’s REALLY Blocking Climate Action?
A critical new initiative demands an end to 'corporate courts,' formally known as investor-state dispute settlement (ISDS), which campaigners warn are a major impediment to urgent climate action. These systems allow corporations, particularly fossil fuel giants, to sue governments for implementing environmental policies like banning drilling or phasing out coal. With over $80 billion already paid to fossil fuel companies in claims, ISDS effectively reverses climate finance, compensating polluters at the expense of victims. Leaders at COP30 are now facing urgent calls to declare an end to this "obscene" system, asserting that no nation should have to compromise its climate goals due to corporate litigation. The situation demands immediate global attention to accelerate climate progress.
Campaigners have launched an urgent new initiative aimed at phasing out 'corporate courts,' formally known as investor-state dispute settlement (ISDS), describing them as a significant barrier to effective climate action. This system, deeply embedded in hundreds of international trade and investment agreements, allows corporations to challenge governments for policy decisions that impact their investments. These policies range from prohibiting oil drilling and fracking to mandating the phase-out of coal power, directly undermining global efforts to combat climate change.
The financial implications are staggering: fossil fuel companies globally have been the primary beneficiaries of this system, securing over $80 billion in ISDS claims. Worryingly, UK investors are among the most aggressive users, having claimed £19 billion in fossil fuel-related cases, a sum nearly twice the international climate finance provided by the British Government. Recent research further reveals that the UK protects more potential annual greenhouse gas emissions through its ISDS treaties than any other country. Britain itself is currently facing its first climate-related case, following a high court decision that effectively halted the opening of a coal mine in Cumbria.
The severe human and environmental toll of ISDS was highlighted by Irene Vélez Torres, Colombia's environment minister, at a COP30 event. Following Colombia's recent acclaimed announcement to protect its Amazon region from fossil fuel exploitation, Minister Vélez Torres emphasized how ISDS complicates such crucial decisions. She stated that Colombia, one of the most affected nations with 23 known cases and a potential 280 more if it continues ambitious climate action, is in an impossible position. 'No government should have to choose between protecting nature and its people, and protecting itself from arbitrators,' she asserted, underscoring the immediate urgency for vulnerable nations.
Nick Dearden, director of Global Justice Now, unequivocally declared that 'It could not be clearer now that ISDS is a major impediment to climate action.' He criticized the system for protecting those exploiting the Amazon rather than the precious forests and their inhabitants. Dearden stressed that while COP30 focuses on climate finance, ISDS represents 'climate finance in reverse,' where "those who have caused this crisis are being compensated by their victims." Describing this as 'obscene,' he announced plans to build a coalition of governments in the coming year to demand an 'ISDS-free world' capable of tackling climate change effectively. The call to action at COP30 is not merely about policy reform, but about fundamentally restructuring global governance to prioritize planetary survival over corporate profits.