Billions Awarded to Investors in Climate Law Disputes

Over $100 billion has been awarded to private investors through investor-state dispute settlement (ISDS) courts, a system that allows corporations to sue governments for decisions impacting their profits. This often secretive arbitration has primarily benefited fossil fuel companies, with $80.21 billion awarded since 1998.

ISDS, which is embedded in many international investment agreements, enables foreign investors to sue states over public measures such as environmental regulations that affect their expected profits. Unlike national courts, ISDS tribunals allow investors to influence the composition of the panels, raising concerns about bias and conflicts of interest.

This mechanism has impeded necessary climate action, diverting public funds to corporations instead of using them for climate reparations. Criticized for its impact on countries in the global south, the system is viewed as a modern form of colonial-era protectionism, ensuring that corporate interests take precedence over environmental and social regulations.

The data underscores an urgent need for reform, as ISDS continues to empower corporations against climate laws, threatening governments from implementing popular climate measures.