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Environmental sustainability initiatives and competition law

Posted by: , Posted on: - Categories: Competition law compliance

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Many forms of collaboration between businesses for the achievement of sustainability goals are unlikely to raise any competition issues, but it’s important that where businesses cooperate on sustainability projects, they fully understand how competition law applies.  

We’re conscious that, although numerous competition law guidelines have been produced over the years, it may be difficult for businesses and NGOs to navigate the competition law framework, which could mean they abandon sustainability initiatives which are in fact unproblematic from a competition law perspective or which may benefit from an exemption. Equally, it is important to be aware of the consequences of breaking competition law and to understand what is and isn’t permitted. 

That’s why we’ve published information to help businesses looking to work together on sustainability projects to navigate competition law and understand where issues may arise. The document sets out the key points that businesses and trade associations should consider when making sustainability agreements. 

To find out more visit our page with information for businesses on sustainability agreements.

Next steps 

There is currently an ongoing international discussion on the interplay between competition law and environmental sustainability. Some of the issues discussed are: 

(a) whether efficiencies generated by sustainability agreements (for example in the form of reduced CO2 emissions, increased biodiversity, reduced waste) can be taken into account if they benefit society as a whole rather than a group of consumers affected by the agreement, and 

(b) how these efficiencies should be evaluated and measured.

The CMA will continue to consider whether any further steps may be needed to support businesses’ compliance with competition law when engaging in sustainability initiatives

We will be engaging with stakeholders, and in particular with SMEs and NGOs active in sustainability fields. We will also continue our close engagement with other international competition agencies, as well as considering the responses to the European Commission’s consultation on competition policy and the Green Deal. 

Publications reflecting the discussion include the OECD Sustainability and Competition’ paper, the ACM draft guidance on sustainability agreements and the HCC draft discussion paper on sustainability issues and competition lawThere will be an international forum for further discussion of this topic at the European Commission’s conference on ‘Competition contributing to the European Green Deal’ and an OECD Competition Open Day in February 2021.

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