Katharina Cavano l Palladium - Aug 01 2025
World Court Declares Climate Change an “Urgent and Existential Threat” — What Comes Next?

In a historic advisory opinion, the International Court of Justice (ICJ) has declared climate change an “urgent and existential threat,” affirming that states have legal obligations to act swiftly and decisively to protect the environment and uphold human rights. The ruling, requested by the UN General Assembly and championed by Pacific Island nations, is being hailed as a moral and legal milestone in the global climate movement.

While the opinion is non-binding, it sends a powerful message: climate inaction is not just a policy failure, it may constitute a breach of international law.

“This is a powerful signal to governments and corporations alike,” says Andrew Sutherland, Palladium Head of Climate, Environment and Natural Capital. “It affirms that climate change is not just an environmental issue, it’s a matter of justice, equity, and legal accountability.”

However, the ruling stops short of outlining enforcement mechanisms or concrete steps for implementation. Without binding obligations or financial frameworks, the risk is that momentum could stall.

That’s why Sutherland, among others, is calling for business leaders to focus on productive measures that are available today like financial mobilisation.

“Legal clarity is important, but capital is what drives change,” he adds. “We need to see a decisive shift in investment into scalable, inclusive climate solutions. That means mobilising public and private finance, de-risking innovation, and ensuring that capital flows to the regions and communities most affected. Court-ordered damages after years of legal battles is the least-optimal way of approaching this and costs us our most important resource in this fight: time.”

The ICJ’s opinion could influence future litigation, climate negotiations, and investor behavior. But the next phase must prioritise implementation—particularly through investment in proven and emerging solutions.

“There are already viable solutions on the table,” notes Sutherland. “Nature-based solutions, renewable energy infrastructure, climate-resilient agriculture, and circular economy models are ready to scale. But what’s missing is the capital to deploy them at speed and at scale.”

He adds that capital alone is not the answer, it needs to be paired with sustainable solutions and business models that deliver long-term impact. From Colombia to Ghana, the UK, and Indonesia, Sutherland notes that it’s now possible to invest in economic models that can work across ecosystems and create lucrative returns.

“We need to move beyond short-term returns and start valuing long-term resilience. That means designing investment vehicles that are inclusive, transparent, and accountable to both the communities they serve and their investors.”

Sustainable commodities, nature-based business models, access to energy, and sustainable tourism can all ensure the livelihoods of communities, while preserving nature at the same time. But only if they receive proper support and put them forth as a clear solution for tackling climate change and meeting global policies and goals.

As the world digests the court’s message, one thing is clear: the era of climate accountability is no longer theoretical. It’s here and the next chapter will be written not just in courtrooms, but in boardrooms, budgets, and balance sheets.