In March 2022, the CMA provided its environmental sustainability advice to the government.
As part of that work, the CMA found that businesses needed more clarity about what is, and what is not, legal when working together towards sustainability goals.
The CMA’s proposed new guidance explains how competition law applies to environmental sustainability agreements between firms operating at the same level of the supply chain. The new guidance will help businesses take action on climate change and environmental sustainability generally, without undue fear of breaching competition rules.
Sarah Cardell, CMA chief executive, said the draft guidance goes further and gives firms greater certainty about when agreements that genuinely contribute to addressing climate change will be exempt from competition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,” she said.
In the draft guidance, the CMA has provided clear working examples that businesses can use to inform and shape their own decisions when working with other companies on environmental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 The draft guidance also invites parties to approach the CMA for informal advice, in what it is calling an ‘open-door policy’.
The draft guidance is part of a wider range of documents on horizontal agreements between businesses.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.
For more information and to respond to the consultation, which is open until 11 April 2023, visit the draft guidance on enviromental sustainability agreements page.
