The Competition and Markets Authority (CMA) has issued information to help businesses in the UK achieve sustainability goals whilst staying on the right side of competition law.
The watchdog believes it is important competition law does not become an “unnecessary obstacle” to sustainable development and businesses are not deterred from taking part in lawful environmental initiatives for fear they may breach competition law.
In addition, it wants to ensure markets remain competitive and open to innovation.
The CMA has therefore issued an information document that outlines the current framework for the self-assessment of competition law risk and sets out the key points businesses and trade associations should consider when making sustainability agreements.
These sustainability agreements are between businesses to work together and combine their expertise to make their products more energy efficient, reduce their carbon footprint or agree to use packaging material that meets certain standards in order to facilitate package recycling and reduce waste.
The watchdog recognises that collaboration can help businesses achieve sustainability goals but warns these sustainability agreements must not be used “as a cover for a business cartel or other illegal anti-competitive behaviour”.
According to the CMA, there is currently an ongoing international discussion on the interplay between competition law and environmental sustainability.
Some of the issues discussed include whether efficiencies generated by sustainability agreements, for example in the form of reduced carbon emissions, increased biodiversity and 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 how these efficiencies should be evaluated and measured.
The competition watchdog will continue to consider whether any further steps may be needed to support businesses’ compliance with competition law when engaging in sustainability initiatives.
Stuart Hudson, CMA Senior Director for Strategy said: “Supporting the transition to a low carbon economy is one of the CMA’s strategic objectives and we want to help businesses to achieve their sustainability goals without breaching competition rules.
“That’s why we’re published concise information and advice for firms and trade associations on how to stay on the right side of the law when producing sustainability agreements.”