Fossil fuel companies have received at least $82.8 billion in awards from governments through the investor-state dispute settlement (ISDS) system, according to researchers. ISDS is a system included in thousands of international investment agreements and contracts that allows foreign companies to file claims against national governments if new policies affect their investments.

These policies include those aimed at protecting the environment and public health. Companies can seek speculative lost future profits, with awards reaching hundreds of millions or billions of dollars. Arbitration panels have ruled against nations for enacting regulations that reduced company profits. Researchers consider the $82.8 billion figure an underestimate because details of many cases have not been disclosed. Oil, gas, and mining companies have extracted more in ISDS awards from governments than any other industry.

Ecuador has paid billions of dollars to American and European oil and gas companies through ISDS awards. Alberto Acosta-Burneo, an Ecuadorian analyst, stated, "The only way the government could pay was deepening its reliance on oil revenues or taking out more debt." In one instance, arbitrators awarded the French oil company Perenco and its partner more than $800 million after the Ecuadorian government enacted a windfall tax on foreign oil companies. Arbitrators acknowledged environmental destruction in the Perenco case, where the company polluted the Amazon rainforest for years and regularly interfered with government environmental audits. Separately, Chevron won a $220 million ISDS award, despite admitting that its predecessor, Texaco, dumped millions of gallons of toxic waste into the Ecuadorian Amazon.

Governments cannot initiate ISDS cases against foreign investors under this system. Christian Pino, an Ecuadorian lawyer, said, "They can contaminate, they can disrespect the rights of workers, they can fail to pay taxes to the countries where they make their investments." Pino added, "Because if at any given moment that country decides to take legal action to avoid this type of inappropriate behavior, the multinational company can use the system to protect itself." Communities impacted by companies typically cannot participate in ISDS proceedings. In a case against Peru, Aymara communities were barred from participating in ISDS proceedings, and the tribunal awarded a mining firm $18 million. Evidence indicated the mining firm ignored international standards for consulting Indigenous peoples and mishandled relations with Aymara communities.

The U.S. narrowly avoided a $15 billion ISDS claim over a shuttered oil pipeline. A company seeking to mine rare earth minerals in Greenland lobbied the government to repeal a prohibition on such projects and placed a former prime minister on its board. When a Greenland government reinstituted a ban on rare earth mineral mining, the mining company filed an ISDS claim seeking up to $11.5 billion. New Zealand implemented climate policies that included ending new offshore oil and gas exploration. The New Zealand government did not limit development of fields where oil had already been discovered due to exposure to ISDS claims.

Wall Street firms that invest in litigation fund some companies' ISDS cases in exchange for a share of the awards. Lisa Sachs, an academic at the Columbia Center on Sustainable Investment, called the funding of ISDS cases by Wall Street firms "pouring kerosene into a fire." Frank Garcia, an academic at Boston College Law School, said ISDS litigation funding represents a "wealth extraction mechanism." Garcia also stated that the vast majority of ISDS claims are brought by companies from wealthy nations against developing ones. Much of the funding for ISDS cases is secret because case details are often shrouded from public view. ISDS arbitrations are largely conducted without public access, and cases generally do not have a right to appeal. Furthermore, arbitrators in one ISDS case can represent companies in another case.