Establishing binding climate‐change‐related investor obligation clauses in international investment agreements: Obstacles and pathways

Abstract Given the current obstacles to host state climate regulation and the lack of oversight of investors' climate responsibilities, incorporating climate‐change‐related investor obligation clauses in international investment agreements (IIAs) is both legally justifiable and necessary. Such clauses would regulate investor behaviour while promoting a balance between the regulatory rights of host states and the protection of investors' interests. The voluntary status of traditional non‐binding obligation clauses mean that they are inadequate for ensuring investor accountability. In recent years, there have been growing calls for binding investor obligation clauses in IIAs. However, such clauses face significant challenges in their practical application, including the value conflict in the positions of the Global North and South and difficulties in identifying investor responsibilities. By properly understanding the interaction between non‐binding and binding investor obligations in IIAs, ensuring the joint application of non‐binding and binding rules, setting specific model of climate‐change‐related investor obligation clauses, systematically optimising IIAs and promoting the coordinated development of domestic and international regulations, the implementation of climate‐change‐related investor obligations can be further advanced.