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International Journal of
Law
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VOL. 11, ISSUE 4 (2025)
Corporate social responsibility and international investment agreements: Balancing investor and host country interests
Authors
Payal Taver
Abstract

Focusing on the social dimension of sustainable development, the article highlights the rising significance of Corporate Social Responsibility (CSR), integrated in International Investment Agreements (IIAs) to help counterbalance the rights of investors with the sustainable development objectives. Historically, most IIAs emphasized investor rights -- providing for fair and equitable treatment and protection against expropriation. In reality, these protections have frequently limited the ability of host countries to adopt policies that advance environmental protection, human rights, and social well-being. In reaction to that, CSR clauses are included in the current IIAs in order to promote responsible investment behavior.

This paper investigates the changing role of CSR in international investment law, identifying various legal and regulatory mechanisms aiming to reconcile investment activities with social and environmental objectives. It identifies major challenges, such as the difficulties of enforcing CSR commitments, possible conflicts between investment protections and host state regulations, and a lack of standardized CSR metrics. The paper provides insight into the potential development of CSR obligations within investment agreements through case studies, and assesses the effectiveness of those obligations in creating sustainable investment practices.

Lastly, the paper suggests reform measures to bolster CSR provisions in IIAs, including their mainstreaming through binding obligations, more effective dispute settlement mechanisms, and the creation of standardized reporting and accountability frameworks. Integrating binding CSR obligations into investment treaties will enable International Investment Agreements (IIAs) to promote a fairer, more sustainable global investment landscape, helping to ensure that foreign direct investments generate positive and lasting development results.

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Pages:36-42
How to cite this article:
Payal Taver "Corporate social responsibility and international investment agreements: Balancing investor and host country interests". International Journal of Law, Vol 11, Issue 4, 2025, Pages 36-42
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