New Climate-Aligned, Sustainable Investment Agreements and NDC Implementation: Towards A More Integrated Approach of International Investment Law

Marios Tokas, University of Copenhagen

Abstract

(Addendum 08/12/2025) International Investment Agreements (IIAs) must be reimagined as tools that actively support, rather than hinder, global climate ambitions. Contrary to long-standing criticisms that IIAs restrict policy space and undermine environmental regulation, this paper argues that properly structured IIAs can facilitate climate-aligned investment and support the implementation of Nationally Determined Contributions (NDCs) under the Paris Agreement. It presents a comprehensive analysis of how IIAs can be harmonized with climate objectives through reforms in investment protection, promotion, facilitation, and regulation. The paper outlines treaty models and best practices that integrate clear sustainability obligations, preferential treatment for green investments, and robust regulatory space for host states. It further explores the role of IIAs in mobilizing climate finance, particularly in the Global South, and highlights case studies where investment frameworks are aligned with national climate strategies. By introducing specific textual proposals, the paper offers a forward-looking framework for drafting IIAs that attract responsible investment while safeguarding states’ rights to regulate climate and development goals. By advancing integrated approaches, IIAs can become tools for fostering international economic stability and achieving global climate objectives.

New Climate-Aligned, Sustainable Investment Agreements and NDC Implementation: Towards A More Integrated Approach of International Investment Law is part of the TDM 3 (2025) - International Investment Arbitration - Environmental Protection and Climate Change Issues (Volume 4) and is available here www.transnational-dispute-management.com/article.asp?key=3129 (sign in to download).