Competition Markets Authority
- Guidance to give firms greater clarity about agreements addressing environmental sustainability including climate change
- CMA to offer open-door policy for businesses seeking guidance
- Campaign includes checklist and video to help businesses navigate different categories of risk
The new Green Agreements Guidance, published today by the Competition and Markets Authority (CMA) following extensive consultation, explains how competition law applies to environmental sustainability agreements between firms operating at the same level of the supply chain, to help them act on climate change and environmental sustainability.
The Green Agreements Guidance - formally, Guidance on the application of the Competition Act 1998 to environmental sustainability agreements - sets out the key principles which apply, along with practical 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 does not expect to take enforcement action against agreements that are in line with the guidance. There is also a chapter dealing specifically with how agreements tackling climate change will be considered.
The guidance follows the environmental sustainability advice the CMA provided to the UK government in March 2022. As part of that work, the CMA found businesses wanted more clarity about what is, and what is not, legal when working together towards environmental sustainability goals. The CMA publicly consulted on a draft of this guidance earlier this year, and this final version reflects the useful comments received from a wide range of interested people and businesses.
This is part of a wider awareness campaign which the CMA has launched today which includes a video and a roadmap. The roadmap focuses on different categories of risk to help businesses navigate what they need to consider as a first step before reading the full CMA guidance document or seeking legal advice.
Example: The fashion sector agrees to set targets for gradually increasing the amount of sustainable materials used in their clothing ranges. The CMAs guidance explains how this should be done so these businesses can be confident their agreement complies with competition law.
For companies which are in doubt, the CMA is operating an open-door policy where businesses (and representative bodies such as trade associations), non-governmental organisations and charities can approach the CMA for informal guidance on proposed environmental sustainability initiatives. You can read more about the CMA open-door policy here.
Sarah Cardell, CMA Chief Executive, said:
We know that tackling climate change and promoting environmental sustainability matters, and supporting businesses to do this is a priority for the CMA. So, we have developed the Green Agreements Guidance for all companies who are considering collaborating so they can understand how to agree green goals without breaking the law.
The guidance goes further than before - it gives firms greater certainty about when agreements that genuinely contribute to addressing climate change will be exempt from competition law. Our open-door policy means we can work with companies to give them tailored informal guidance on how they can work together to boost the green economy.
The Green Agreements Guidance published today is part of a wider range of documents on agreements between businesses at the same level of the supply chain (so-called horizontal agreements). This follows work from the CMAs Sustainability Taskforce after it published its environmental sustainability advice to the UK government in March 2022.
Notes to editors
- To discuss initiatives on environmental sustainability, and make use of our open-door policy, please get in touch with the Sustainability Taskforce via sustainabilityguidance@cma.gov.uk
- In line with the CMAs strategy, there are three main ways the CMA is seeking to promote environmental sustainability and help accelerate the transition to a net zero economy. These are helping to ensure: i) that markets for environmentally sustainable products or services develop in ways favourable to competition and consumers (see for example the market study on electric vehicle charging points), ii) that consumers are able to make informed choices about the environmental impact of the goods and services they use (see work on green claims) and iii) that competition law is not an unnecessary barrier to companies pursuing environmental sustainability initiatives. This Guidance on Green Agreements is part of this third area of focus.
- The CMA Annual Plan 2023 to 2024 outlines the strategy to promote environmental sustainability.
- For media enquiries, please contact the press office via press@cma.gov.uk o