CMA publishes guidance on business environmental cooperation


The Competition and Markets Authority (CMA) has published new guidance on how competition law applies to environmental sustainability agreement between firms.  

According to the CMA, the new guidance will help businesses take action on climate change and environmental sustainability generally, without undue fear of breaching competition rules.

In the draft guidance, the CMA has provided clear working examples that businesses can use to inform and shape their own decisions when working with other companies on environmental sustainability initiatives.

It explains that the CMA is likely to look favourably on agreements that are in line with the guidance and is very unlikely to prioritise them for enforcement action. The draft guidance also invites parties to approach the CMA for informal advice, in what it is calling an ‘open-door policy’.

The draft guidance published today is part of a wider range of documents on horizontal agreements between businesses. This follows work from the CMA’s Sustainability Taskforce after it published its environmental sustainability advice to the Government in March 2022.

The consultation is open until 11 April 2023.

CMA CEO Sarah Cardell said, “Tackling climate change and promoting environmental sustainability are priorities for the CMA and many businesses across the UK. We hear increasingly that firms want to do more to co-operate and tackle climate change issues but are worried that competition law may prevent or impede them from working together to address them. We are committed to helping these businesses deal with the issue together, without unfounded fear of breaking competition rules.

“The draft guidance goes further than we have done previously. It gives firms greater certainty about when agreements that genuinely contribute to addressing climate change will be exempt from competition law. Businesses involved in agreements promoting environmental sustainability should also be assured that if they have concerns, they can speak to us, and we can provide bespoke advice.”

The US House of Representatives has recently approved legislation aimed at blocking a new law allowing the consideration of climate and ESG factors by retirement plan fiduciaries.

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