States have adopted measures to protect their environment and they have used those measures to cancel foreign investments. Investors have brought such measures before international arbitral tribunals claiming that the cancellation of their prospective investment constitutes direct or indirect expropriation. The tribunals, which have decided these cases, have been far from unanimous on the threshold at which a state’s legitimate right to regulate its internal affairs, including the protection of the environment, constitutes expropriation of an investment. This has generated much uncertainty for investors and host states. By the late 2010s, though, states started to drastically change the nature of investor-state dispute settlement by increasingly adopting a new generation of international investment agreements that limit significantly the discretion of international arbitral tribunals, and recognize the importance of states’ regulatory space in matters such as the protection of the environment, labor rights, and human rights.