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The recent International Court of Justice (ICJ) , represented a significant moment for Small Island States (SIDS) globally. The ICJ was asked to clarify two fundamental questions: first, what obligations states have under international law to protect the climate system and environment from greenhouse gas emissions for present and future generations; and second, what legal consequences states face when their actions or omissions cause significant harm to the climate system, particularly regarding small island developing states and vulnerable populations.

While international commentary has rightly focused on the opinion’s landmark findings on the obligations for climate action, the opinion also provides legal certainty that SIDS maritime boundaries and the vast ocean resources within them are permanently secured, regardless of sea level rise. The Court also found that “once a State is established, the disappearance of one of its constituent elements would not necessarily entail the loss of its statehood” - meaning small islands remain states even if their land is subsumed. 

Collectively, SIDS are responsible for about 30% of the world's oceans through their exclusive economic zones (EEZs)—an area averaging 28 times their combined land mass (and for some, like ).

These aren't small island states managing limited resources, but large ocean states responsible for governing some of the planet's most critical marine territories. 

This opinion now provides critical legal certainty with potentially far-reaching consequences for investment in the sustainable ocean economy. 

Shifting boundaries in rising seas

The sustainable ocean economy represents a transformative development pathway for SIDS, promising to unlock economic growth while preserving marine ecosystems. Yet despite global commitments and the clear potential of marine resources, . While financing constraints have been widely cited as a primary obstacle, a deeper examination reveals that investor uncertainty—driven by financial and climate-related threats to both physical territory and legal frameworks—poses a challenge to realising the promise of a sustainable ocean economy for SIDS.

One reason for investor uncertainty is the legal concept of "ambulatory baselines"—the idea that maritime boundaries move inland as coastlines retreat due to sea level rise and coastal erosion.

Under the United Nations Convention on the Law of the Sea (UNCLOS), maritime zones originate from baselines that act as starting points for measuring territorial seas and EEZs. However, UNCLOS provides limited guidance on what occurs when topography changes due to climate impacts.

This legal uncertainty has led to concerns of areas currently under state control potentially reverting to international waters and then open to exploitation by all states on a "first come, first served basis." For SIDS, this represents an existential threat to their primary source of natural wealth.

In response to this threat, SIDS have not remained passive observers but have pioneered innovative legal strategies to secure their maritime claims. Pacific island states have already established coordinate-based maritime boundaries rather than distance-based measurements to demarcate the outer limits of their EEZ.  

Similarly, Seychelles, a SIDS in the Indian Ocean, also uses geographical coordinates rather than distance from set baselines for defining its EEZ and continental shelf outer limits. 

The ICJ advisory opinion supports this coordinate-based approach and addresses the fundamental uncertainty regarding shifting measurement baselines due to ongoing climate impacts on coastlines. The implications will be profound.

Implications for investor certainty

The ICJ's advisory opinion represents more than legal clarification—it provides the foundation upon which sustainable blue economies can be built, secured, and sustained. For the first time, SIDS can offer investors something previously elusive: long-term territorial certainty over some of the world's most biodiverse and economically valuable marine spaces.

This certainty unlocks transformative investment opportunities across the blue economy spectrum.

Governments and marine biotechnology companies can now invest in research facilities knowing their access to genetic resources is secure. Sustainable aquaculture operations can plan multi-decade expansions with confidence in their maritime operating environment. Perhaps most crucially, the specter of shrinking maritime zones—and the resulting competition for increasingly limited ocean space—has been eliminated. SIDS can now plan comprehensive ocean use strategies without the fear that their EEZs will contract over time, allowing for rational long-term spatial planning that balances conservation, economic development, and traditional uses.

Seychelles, known for leadership in ocean-based economy development, has pioneered innovative financing mechanisms including debt-for-adaptation swaps and "blue bonds" for sustainable fisheries. The country's and commitment to designating 30% of ocean area as marine protected areas demonstrate integration of climate resilience with economic development. With ICJ-backed legal certainty over maritime zones, these initiatives can proceed with greater investor confidence.

Perhaps most significantly, the opinion enables SIDS to attract patient capital—the long-term, sustainability-focused investment essential for building truly regenerative ocean economies. When investors can rely on stable maritime boundaries backed by the world's highest court, they can commit to the extended timelines necessary for ecosystem restoration, sustainable fisheries development, and marine conservation initiatives that generate both financial returns and environmental benefits.

The Pacific's tuna industry exemplifies this potential. With legal certainty over their vast EEZs, Pacific nations can now confidently expand value-added processing, develop sustainable fishing technologies, and create regional investment vehicles that leverage their collective maritime wealth. The region’s collaborative —where Pacific nations collectively limit fishing effort to maintain sustainable stocks—becomes not just a conservation tool but an investment platform backed by unshakeable legal foundations.

For SIDS, the path forward is clear: leverage this hard-won legal certainty to transform their ocean wealth into sustainable prosperity. The ICJ has provided the legal bedrock; now comes the work of building blue economies that can weather any storm—both legal and literal.