Advisory opinion of the International Court of Justice: failure to comply with climate agreements may have negative consequences for businesses and governments

On July 23rd, 2025, the International Court of Justice issued a groundbreaking advisory opinion on the obligations of states under international law with regard to climate change and climate agreements. In this article, we discuss the essence of the advisory opinion and its potential impact on Dutch and international case law concerning the climate liability of companies and states. Reason: Vanuatu’s appeal The initiative for these proceedings came from the island nation of Vanuatu, which is threatened by rising sea levels and extreme weather conditions. On March 29, 2023, the United Nations General Assembly adopted Resolution 77/276, requesting the International Court of Justice to issue an advisory opinion on (in short) the following questions: What are the obligations of states under international law with regard to human-induced climate change? What are the legal consequences for states whose actions have caused significant damage to the climate and the environment, resulting in effects that will be felt by certain states and future generations? What is the contents of the opinion about climate agreements? The International Court of Justice confirms that states are obliged to protect the climate. These obligations arise from the UN Charter, the UN Climate Convention, the Paris Agreement, the rights recognized in the Universal Declaration of Human Rights, international customary law, and general principles of law. The International Court of Justice qualifies these obligations as erga omnes. This means that these obligations apply to every state. Even states that are not party to the climate treaties may therefore be required to take effective measures to limit climate change. In addition, there is an obligation for states to cooperate and support each other. The ruling on liability is striking: states that fail to meet their climate obligations and thereby cause damage may be required to compensate for that damage in full. A state that takes insufficient measures to reduce its CO2 emissions could therefore, in theory, be liable to another state that suffers damage as a result. However, a complex causality threshold applies here. Legal significance: not binding, but influential Although the advisory opinion is not binding, its legal and political impact could potentially be significant. Thousands of lawsuits relating to climate change are currently pending worldwide, including a number in the Netherlands. Examples include the proceedings brought by Dutch enviromental defense organisation ‘Milieudefensie’ against the ING bank and the ongoing appeal in cassation in the case of Milieudefensie against Royal Dutch Shell. The opinion of the International Court of Justice implies that non-compliance with international climate agreements must have concrete consequences. This is in line with a trend in Dutch case law, in which international climate agreements end up entailing concrete obligations for companies and the State. For example, in the Shell case, the Court of Appeal in The Hague ruled that international climate agreements contribute to an obligation for companies such as Shell to reduce their CO2 emissions. The reduction obligation imposed on the State by the Dutch Supreme Court in 2019’s Urgenda ruling was also based in part on international climate agreements. In the proceedings against ING, which have not yet been heard on their merits, Milieudefensie also invokes such agreements in its summons. It is therefore not inconceivable that the non-binding ruling of the International Court of Justice will play a role in future climate cases against banks, other companies, and governments, both in the Netherlands and abroad. Want to know more? Do you have questions about this topic or would you like to discuss the consequences of the Court’s ruling? Please contact La Gro’s Energy team or Climate Litigation team. We are happy to assist you.

On 30 June 2025, the Stichting Eerlijke Handelspraktijken (“SEH” – Foundation for Fair Trade Practices) initiated legal proceedings under the Dutch Act on collective damages claims (Wet afwikkeling massaschade in collectieve actie or “WAMCA”). The collective action targets six major energy suppliers, namely Vattenfall, Eneco, Essent, Greenchoice, Energiedirect, and Budget Thuis. SEH alleges that these suppliers unlawfully modified the energy tariffs of customers with variable energy contracts during their contract period. According to SEH, the energy suppliers must therefore financially compensate the affected consumers for past damages. Background Dutch energy suppliers all use the same set of general terms and conditions for their contracts when dealing with the supply of energy to consumers. These terms were developed through extensive consultation between energy suppliers represented by the Dutch energy trade association Vereniging Energie-Nederland, the Consumers’ Association (Consumentenbond), Vereniging Eigen Huis, and – in the background – the regulatory authority, the Netherlands Authority for Consumers and Markets (Autoriteit Consument & Markt or ACM). The general terms and conditions allow the supplier to unilaterally change supply tariffs under certain conditions. Until recently, courts deemed this tariff adjustment clause permissible, provided consumers had the right to terminate the contract and were sufficiently informed about the tariff change. However, on 25 March 2025, the Amsterdam Court of Appeal ruled that Vattenfall applied the tariff adjustment clause unfairly, as the energy supplier had failed to inform the customer in a clear and comprehensible manner and did not provide a genuine opportunity to terminate the contract. The court therefore ordered Vattenfall to repay the excess amount charged due to the unlawful tariff increase. Implications of the Vattenfall Ruling for energy suppliers Vattenfall disagrees with the Amsterdam Court of Appeal’s decision and has filed an appeal in cassation with the Dutch Supreme Court. The Supreme Court’s decision is now the center of market attention. The Supreme Court’s decision could have far-reaching consequences for energy suppliers. Market dynamics may also shift, possibly requiring a critical reassessment of the structure and functioning of variable energy contracts. Consumer trust is under pressure due to potential reputational damage. Lastly, from a legal perspective, the Supreme Court’s judgment may lead to stricter scrutiny of contract terms across multiple sectors. In short, a great deal is at stake. Next Steps Following SEH’s initiation of the collective action, attention now turns to whether additional parties will join the case within the three-month window. Should the Supreme Court rule against Vattenfall, SEH is expected to broaden its claim to include other energy providers and pursue compensation for their customers as well. If you have any questions about the Vattenfall ruling or collective actions, please contact Arnout Koeman or one of our Energy specialists.