New UNCTAD figures reveal a dramatic increase in corporate compensation claims against governments. Fossil fuel investors account for a disproportionate share of these claims, while European investors remain among the biggest beneficiaries of the international investment protection system.
Investors worldwide have demanded more than USD 1.17 trillion from governments through Investor-State Dispute Settlement (ISDS) proceedings, according to figures from the United Nations Conference on Trade and Development (UNCTAD) covering cases up to 2025. This represents an increase of USD 321 billion, or 37.5%, compared to the end of 2023.
These figures are alarming. At a time when many countries are struggling with rising debt burdens and shrinking fiscal space, multinational corporations can use investment treaties to pursue billions in compensation. Such claims can put additional pressure on public budgets and threaten resources urgently needed for climate action, public infrastructure and social protection.
ISDS Compensation Claims Rise by 37.5%
The total amount claimed by investors in publicly known ISDS cases has reached USD 1.177 trillion. To put this into perspective, this is almost equivalent to the total global climate finance flows recorded in 2021 and 2022 combined.
And this figure may significantly underestimate the full scale of compensation demands. Of the 1,465 publicly known ISDS cases included in the dataset, information on the amount claimed is available for only 987 cases. In 478 cases – almost one-third of the total – the compensation demanded remains undisclosed.
ISDS allows foreign investors to sue governments before international arbitration tribunals, often on the basis of bilateral or multilateral investment treaties. These lawsuits can also target government measures adopted to protect the environment, tackle climate change or advance other public interests.
Unlike domestic companies, foreign investors covered by such treaties have access to a special international legal mechanism to challenge government decisions and seek financial compensation.
Fossil Fuel Investors Demand Hundreds of Billions
The fossil fuel industry continues to play a particularly prominent role in the ISDS system.
Although fossil fuel disputes account for less than 20% of cases with known compensation demands, they represent more than 37% of the total amount claimed.
Fossil fuel investors have demanded approximately USD 434 billion in compensation from governments worldwide. Compared to the end of 2023, their claims have increased by around USD 80 billion.
The scale of these claims is striking. They are comparable to estimates of the minimum annual economic losses that developing countries could face from climate change by 2030.
This exposes a fundamental contradiction: While governments urgently need to phase out fossil fuels and accelerate the transition to climate-friendly economies, fossil fuel corporations can use investment treaties to demand enormous compensation payments.
The threat of costly arbitration proceedings risks delaying, weakening or making essential climate policies more expensive. This is particularly concerning for countries in the Global South, which often face severe climate impacts while having limited financial resources to address them.
$123 Billion Awarded to Investors Worldwide
The financial implications of ISDS extend far beyond the amounts claimed.
International arbitration tribunals have already awarded investors a total of USD 123.1 billion in compensation, an increase of approximately USD 10 billion compared to the end of 2023.
Fossil fuel investors have received the lion’s share of these awards. With USD 85.9 billion in compensation awarded, they account for almost 70% of all known ISDS compensation awards by value.
For comparison, the total amount awarded to investors is roughly equivalent to the bilateral official development assistance provided by OECD donor countries in 2025.
This comparison illustrates the enormous financial stakes of the international investment protection system.
While public funding for development cooperation and climate finance is under increasing pressure, private investors can obtain multibillion-dollar compensation awards through a parallel system of international arbitration.
It is important to distinguish between compensation awarded and compensation actually paid. Nevertheless, these awards demonstrate the substantial financial liabilities that governments can face under investment treaties.
European Investors Dominate Global ISDS Cases
European investors play a particularly significant role in the global ISDS system.
Investors from the European Union, Norway, Switzerland and the United Kingdom have initiated 801 of the 1,465 publicly known ISDS cases worldwide, representing almost 55% of all cases.
Their dominance is even more pronounced when it comes to compensation awards. European investors have been awarded USD 99.6 billion, accounting for approximately 81% of the total known compensation awarded to investors worldwide.
European investors are also heavily involved in fossil fuel disputes. They have claimed USD 259.7 billion in fossil fuel-related cases and have been awarded USD 76 billion in compensation.
However, an investor’s formal registration in Europe does not necessarily mean that its ultimate beneficiaries are European. Multinational corporations frequently use mailbox companies and complex corporate structures to gain access to investment protection treaties.
These figures highlight Europe’s particular responsibility to address the harmful consequences of the international investment protection regime.
Why ISDS Threatens Climate Action and the Just Transition
The latest UNCTAD figures demonstrate the enormous financial risks that ISDS poses to public budgets. They also reveal how disproportionately fossil fuel investors benefit from a system that grants foreign corporations far-reaching rights to challenge government decisions.
At a time of accelerating climate breakdown, growing global inequalities and enormous financing needs for a just energy transition, this system is increasingly difficult to justify.
ISDS creates an imbalance between private investment protection and the public interest. While governments are expected to meet their obligations under the Paris Agreement and protect human rights, investment treaties can expose them to substantial financial claims when they introduce new environmental or social regulations.
Even the threat of arbitration can create a chilling effect, discouraging governments from adopting ambitious policies or prompting them to weaken proposed measures.
This undermines democratic decision-making and risks shifting the costs of the energy transition onto the public.
Germany and the European Union must take decisive steps to end ISDS privileges for foreign investors. This includes terminating or fundamentally reforming existing investment treaties and excluding ISDS provisions from future trade and investment agreements.
Governments must be able to adopt ambitious climate policies, protect human rights and regulate in the public interest without facing the threat of multibillion-dollar compensation claims.
Climate justice, democratic decision-making and the public interest must take precedence over special legal privileges for multinational corporations.
Key ISDS Statistics: Global Claims and Compensation Awards
According to the UNCTAD-based dataset covering cases up to 2025, the following figures illustrate the scale of investor-state arbitration worldwide.
| Indicator | Amount / Number |
|---|---|
| Total known ISDS cases | 1,465 |
| Total compensation claimed | USD 1,177.3 billion |
| Increase in claims since end of 2023 | 37.5% |
| Fossil fuel compensation claims | USD 433.8 billion |
| Total compensation awarded | USD 123.1 billion |
| Compensation awarded to fossil fuel investors | USD 85.9 billion |
| Cases initiated by European investors | 801 |
| Compensation claimed by European investors | USD 512 billion |
| Compensation awarded to European investors | USD 99.6 billion |
| Fossil fuel compensation claimed by European investors | USD 259.7 billion |
| Fossil fuel compensation awarded to European investors | USD 76 billion |
Note: Figures refer to publicly known ISDS proceedings and available compensation data. Compensation awards do not necessarily represent amounts already paid. European investors include investors registered in the EU27, Norway, Switzerland and the United Kingdom.
What Is Investor-State Dispute Settlement (ISDS)?
Investor-State Dispute Settlement is a legal mechanism that allows foreign investors to bring claims against governments before international arbitration tribunals.
ISDS provisions are typically included in bilateral investment treaties and trade agreements with investment protection chapters.
Investors can seek financial compensation if they argue that government measures violate protections guaranteed under these agreements.
Critics argue that ISDS gives foreign investors extensive legal privileges and can undermine governments’ ability to regulate in the public interest, particularly in areas such as climate protection, environmental regulation and human rights.
The disproportionately high compensation claims and awards involving fossil fuel investors illustrate why reforming the international investment protection system is an urgent issue for climate justice.
Sources and Further Reading
Primary data source:
UNCTAD – Investment Dispute Settlement Navigator
Additional sources:
Photo: Glenn Beltz / Wikimedia Commons, CC BY 2.0 (https://creativecommons.org/licenses/by/2.0/). Cropped if applicable.
