Green Banks: From Environmental Concern to Legal Responsibility

In a time where courtrooms are becoming battlegrounds for survival the establishment of a national green bank is not merely a policy choice, but a concrete indicator not only of a state’s compliance with its environmental and human rights obligations, but also its genuine commitment to the well-being of its people.

Judges around the world are no longer letting governments off the hook for climate passivity. Courts from Latin America to Europe are holding governments accountable for environmental neglect, making clear that climate inaction is not just a political choice, and governmental policy but a legally binding obligation.  In July of 2025, the Inter-American Court of Human Rights (IACHR) declared the climate crisis as a human rights emergency, affirming that States are legally bound to act. In Europe, a similar approach is evident: In Sweden, youth activists from the Aurora group have challenged their government’s emissions targets as incompatible with international law, right after a Dutch court ruled that the Netherlands violated the rights of Bonaire’s residents by failing to adopt adequate mitigation and adaptation measures.

Allowing environmental degradation is analogous to letting a child play with fire inside a home, fully aware that the fire will spread and endanger everyone within it, including the child himself. From a legal perspective, such conduct isn’t mere oversight; it’s negligence, a failure to uphold a duty of care when harm is foreseeable.

Therefore, the rationale for Green Banks does not rest solely on economic efficiency or policy preference, but it helps mitigate the risk of human rights violation and complicity in a global threat.

The Escalating Toll of Inaction

The threats of climate change are no longer hypothetical, and they haven’t been for a while. Air pollution is causing millions of deaths annually, directly fuelling respiratory disease and cardiovascular disease. While rising global temperatures are accelerating the geographic spread of infectious diseases, like malaria and dengue fever, which shattered records in 2024 and 2025, with over 14 million cases globally, especially as warmer conditions expand mosquito habitats expand as well, reaching into what used to be temperate zones like Europe and North America. Meanwhile, contaminated water systems, are sparking outbreaks of cholera and other waterborne illnesses, while extreme heat has emerged as a silent killer on a global scale, claiming an average of 489,000 lives annually between 2000 and 2019, with Asia bearing 45 percent of the burden and Europe 36 percent.

As ecosystems degrade, economic systems dependent on environmental stability, agriculture, fisheries, and tourism begin to fail as result. Infrastructure is increasingly destroyed by floods, storms, heatwaves, and wildfires, thus overwhelming state capacity and resilience mechanisms. We are before ecosystems that are slowly losing their capacity to regenerate, and with that, the interconnected natural systems that sustain human life are progressively destabilizing, posing a great risk of basic human rights.

International Response

In response to these escalating risks, the international community has not remained silent. Over the past decades, States have adopted a wide range of environmental treaties, policy frameworks, and cooperative initiatives aimed at mitigating environmental harm and promoting sustainable development, yet the implementation of it all often falls short of the rhetoric.

At the core of the global effort stands the United Nations Framework Convention on Climate Change (UNFCCC), which recognises climate change as a common concern of humankind and obliges States to prevent dangerous anthropogenic interference with the climate system. This framework was strengthened through the Paris Agreement, which commits States to limiting global temperature rise to well below 2°C, and preferably to 1.5°C, which is a threshold that, for many island states like Bonaire, represents the difference between survival and the loss of it all.

Complimenting this framework, the UNFCCC embeds a precautionary principle, which demands action even amid scientific uncertainty to avoid irreversible damage, like the old saying, “prevention is better than cure.” This ethos has proven effective through the Montreal Protocol, which tackled ozone-depleting substances, halted escalation and put the ozone layer, on a path to recovery.

Some states have gone further by establishing dedicated green finance institutions, such as the Green Bank Network (“GBN”), whose current and former members span the Americas, Asia, Europe, and Oceania.

In the Arabian Gulf, the UAE has proactively established frameworks like the UAE Green Agenda 2015-2030, the National Climate Change Plan 2017-2050, and the UAE Net Zero by 2050 Strategic Initiative. Moreover, GCC countries are increasingly recognising the physical climate risks ranging from extreme heat to sea-level rise, resulting in intensified flooding, as witnessed in Oman. Recent developments, such as the UAE’s Law No. (11) of 2024 On the Reduction of Climate Change Effects mandating adaptation planning, represent a move toward embedding adaptation within formal legal structures. Similarly, the UAE Central Bank’s issuance of climate-related financial risk principles signals a regulatory shift toward integrating physical risk into financial governance frameworks.

Environmental Crisis as a Grave and Imminent Threat Under International Law

Despite all the treaties, frameworks, strategic plans, and climate finance platforms, the negative impacts of climate change remain a major threat. Today’s environmental crisis presents eternal scars, and harms that cross borders like wildfire, air and water pollution.

This is not just an environmental concern anymore; it is a violation of international law and human rights. Fundamental rights such as, the right to life and the right to health, are threatened by rising water levels, disease vectors, and extreme heat; the right to an adequate standard of living, including access to food, clean water, and housing, is eroded by droughts, floods, and compromised food production systems; the right to privacy, family, and home, threatened by displacement, sea-level rise, and unliveable conditions.

Rights which are codified but not protected against foreseeable climate destruction exists in vain, inaction in the face of known risks equals negligence on a global scale.

A Duty to Act

On July 23, 2025, the International Court of Justice delivered a unanimous Advisory Opinion that reshaped the legal landscape of climate responsibility. The question before the Court was simple: what are States legally required to do in the face of climate change?

The answer was clear, failing to act or not acting enough, and falling short of what science demands can constitute a breach of international law.

The Court described climate change as an “urgent and existential threat” of global magnitude. It recognised that rising temperatures are not abstract projections but lived realities, endangering life, health, food systems, water supplies, livelihoods, and the very foundation of human rights.

In plain terms, climate inaction is no longer a matter of political hesitation or policy preference. It is a legal risk. States are required to regulate emissions, prevent foreseeable harm, and pursue meaningful mitigation and adaptation measures consistent with scientific evidence.

Green Banks as State Duty

Given the grave harm of climate change, a robust response is necessary; incremental policy adjustments are no longer sufficient. International law now recognises climate protection not as aspirational governance, but as a binding obligation grounded in human rights, due diligence, and the prevention of transboundary harm.

With such legal duties, a structured and forceful response is required. A national Green Bank represents not merely a financial instrument, but an institutionalized structural embodiment of a state’s compliance with international law and its intention to mobilise resources, regulate risk, and operationalise mitigation and adaptation at scale.

National Green Banks will turn abstract obligations into concrete compliance, shielding states from international responsibility and complicity in a global crisis of planetary scale, while advancing a sustainable framework that protects both present and future generations. Therefore, a green bank not just an aspirational initiative, it is the institutional manifestation of a state’s duty of care toward present and future generations.