The Competition and Markets Authority (CMA) has launched guidance to businesses on how to cooperate on sustainability without contravening competition law.
The CMA’s Green Agreements Guidance, which follows a consultation earlier this year, aims “to give firms greater clarity about agreements addressing environmental sustainability including climate change”.
It includes a checklist and video and the authority also pledged to offer “an open-door policy for businesses seeking guidance”.
The CMA said the guidance, formally entitled ‘Guidance on the application of the Competition Act 1998 to environmental sustainability agreements’, follows “extensive” consultation with business.
It 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 guidance sets out the principles which apply, with practical examples, and explains how agreements on tackling climate change will be considered.
It forms part of a wider awareness campaign launched today which includes a ‘roadmap’ on different categories of risk for businesses “to consider before reading the full CMA guidance or seeking legal advice”.
The associated ‘open-door policy’ will allow businesses and representative bodies, non-governmental organisations and charities to approach the CMA for informal guidance on environmental sustainability initiatives.
The CMA said it “does not expect to take enforcement action against agreements in line with the guidance”.
It noted: “Businesses want more clarity about what is and is not legal when working together towards environmental sustainability goals.”
CMA chief executive Sarah Cardell said: “We know 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 which are considering collaborating so they can understand how to agree green goals without breaking the law.”
She explained: “The guidance 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.”
The Green Agreements Guidance forms part of a wider range of documents on agreements between businesses at the same level of the supply chain, so-called ‘horizontal agreements’.
The CMA published a Green Claims Code in 2021 on the obligations of businesses under consumer protection law when making claims about their environmental sustainability.