Competition Law Forum roundtable discussion on sustainability, competition law and greenwashing
Media Release :
On January 11th the Competition Law Forum held a roundtable for members.
The discussion addressed two main questions: (i) to what extent the market and competition forces can contribute to sustainability goals; and (ii) the extent to which competition law might act as an impediment to the achievement of those goals.
Participants from law firms, government agencies and corporates examined these questions and produced the following observations:
• There is an asymmetry between the current beneficiaries of fossil fuels and the future victims of climate change and that needs to be addressed.
• Where regulation is inadequate, positive sustainability outcomes are likely to be realised through collaboration.
• Allowing collaboration amongst competitors and within the the supply chain as well as public/private partnerships to unlock investment and to tackle negative externalities is key to move to a more sustainable world.
• Few firms are willing to move without their competitors not only because of increased cost of production, but also because it is not always possible to move unilaterally due to the systemic nature of the problem.
• Competition law can act or be precieved to act as a roadblock for such collaboration. This needs to be addressed, as collaboration ought to be allowed if it is to tackle market failure.
• In allowing collaboration it will be important for competition authorities to distinguish between good collaboration to address market failure on the one hand and bad collaboration where the aim is only to increase price. Being able to understand the objective and the effects of a collaboration will become important.
• Even if we see good progress being made on a member state level across Europe and at the European level, this is a global issue.
• Firms operating on a global scale fear enforcement action in the US, which does not currently explicitly acknowledge the benefits of collaborations amongst competitors to address sustainability and climate issues.
• The Authority for consumers and Markets (ACM) has issued draft guidelines on sustainability agreements, the EU is working on its rules on horizontal corporation agreements between companies and the Competition and Markets Authority (CMA) is in the process of preparing guidelines for consultation.
• Several authorities around the world are starting to crack down on misleading sustainability claims to protect consumers against greenwashing. Action is needed to avoid consumers and investors losing trust in ESG funds.
• Global consensus is difficult, but convergence and standard setting is key and the International Competition Network(ICN) and OECD may have an important role to play.
The Competition Law Forum will host a second roundtable discussion once the CMA's forthcoming guidelines have been through consultation.