A Landmark Ruling from the International Court of Justice on Climate Litigation

In a landmark opinion, the International Court of Justice has ruled that countries can be held legally accountable for climate harms, potentially including historic emissions and fossil fuel subsidies. The decision, while advisory, opens the door to a new era of litigation and liability, with states now equipped to pursue compensation. This article explores what this means for governments and firms across the world.

Top UN court opens the door to climate lawsuits between countries

The International Court of Justice has declared that countries can be held accountable under international law for failing to prevent climate harm, potentially including historic emissions as well. While non-binding, the ruling sets a new legal precedent that could enable vulnerable nations to pursue compensation for climate-related damages, from infrastructure losses to forced relocation. The court also found that states may breach their obligations by subsidizing fossil fuels or failing to regulate polluting firms, even if not signatories to the Paris Agreement.

Lessons for leaders:

• Expect a rise in climate liability claims globally, which could shift legal risk profiles for companies and countries.
• Continued support for fossil fuel expansion or new fossil fuel deals can more directly trigger litigation or diplomatic fallout.
• Legal exposure won’t be limited to states; companies may face scrutiny where national obligations are invoked.

Read more from the ICJ.

EPA prepares rollback of the endangerment finding: the core legal basis for US climate regulation

The Trump administration is moving to repeal the EPA’s 2009 endangerment finding, the scientific and legal foundation underpinning all federal climate regulation. The draft proposal, now under White House review, would eliminate EPA’s authority to regulate greenhouse gas emissions from vehicles, power plants, and industry. It also targets Biden-era tailpipe rules that aimed to accelerate EV adoption. If finalised, this reversal would not only unwind current emissions limits but also prevent future administrations from using the Clean Air Act to address climate change.

Lessons for leaders:

• A repeal would severely constrain federal climate powers and push much enforcement to the state level
• Legal challenges are inevitable, but uncertainty may slow clean tech deployment and investment planning.
• For multinationals, the regulatory divergence between the US and other markets will only deepen.

EFRAG launches live portal to track early ESRS implementation across 656 companies

EFRAG has released a new interactive portal and report analysing the first wave of sustainability reports aligned with the EU’s Corporate Sustainability Reporting Directive (CSRD). Drawing on 656 reports filed in early 2025, the portal reveals that just 10% of companies judged all 10 topical ESRS standards to be material. Climate, workforce, and governance were the most commonly disclosed topics. While 55% reported a climate transition plan, the range of formats shows there is still no clear model. The study also flags that 97% of companies engaged only internal stakeholders during materiality assessments—highlighting a gap in broader engagement.

Lessons for leaders:

• There is wide variation in reporting formats and depth under ESRS
• Stakeholder engagement is a weak point. Leaders should further explore how materiality assessments reflect societal expectations.
• Regulators and preparers alike are watching closely as transition planning and internal carbon pricing remain underdeveloped.

Eni doubles down on energy transition with €22bn bet on hybrid business model

As rivals scale back their renewables ambitions, Italian oil major Eni is charting a different course. CEO Claudio Descalzi says the company expects profits from its transition businesses, biofuels unit Enilive and renewables platform Plenitude, to equal those from oil and gas by 2035. The two units, spun out as “satellites,” pair clean energy with profitable legacy infrastructure to deliver early returns. Together, they generated nearly €600 million in EBIT in H1 2025, and private equity investors have already valued them at a combined €22 billion.

Lessons for leaders:

• Pairing low-carbon growth with cash generating assets may offer a viable path to scale and investor confidence.
• Strategic JV and private capital partnerships are helping Eni derisk transition investments.
• Clear earnings visibility from transition units is key to unlocking broader investor support.