With growing concerns over the impact of investment arbitration on climate policies—leading to a wave of withdrawals from the Energy Charter Treaty—the debate surrounding the foreign investment-environment conflict has gained renewed attention. While many arbitral tribunals have sought to strike a balance between investment protection and environmental concerns, criticism persists that investment arbitration undermines a host state’s authority to regulate business activities for environmental protection. This perception continues to fuel the backlash against the investment treaty regime.
Recent investment treaties increasingly recognise host states’ regulatory rights, with many now explicitly referring to climate change. Yet, how these provisions affect the interpretation of investment protection obligations remains uncertain.
This keynote explores the legal and policy challenges at the intersection of investment arbitration and environmental protection. It examines the risk of ‘regulatory chill,’ analyses arbitral case law balancing investment protection with environmental objectives, and considers the role of international environmental law. It also reflects on the implications of recent domestic and EU developments on corporate climate responsibilities for future investment arbitration.
Tomoko Ishikawa, Professor at Nagoya University, has served as an ICSID Conciliator, Energy Charter Treaty adviser, arbitrator, and mediator. Her prior roles include Associate Judge at Tokyo District Court and Deputy Director at Japan’s Ministry of Foreign Affairs, where she worked on investment treaties, FTAs, and WTO disputes.
