Competition Policy and Environmental Sustainability

  • 10 December 2020

Competition Policy and Environmental Sustainability

There is an increasing recognition amongst the business community that climate change presents an existential crisis (and a growing commitment to the United Nations Sustainable Development Goals (UN SDGs)). Many businesses and entrepreneurs want to be part of the solution to this crisis. The need for collective action – in both business and within society at large – is now acknowledged, and cooperation amongst companies, with clear and consistent guidance on what is permitted under competition law, may significantly advance environmental sustainability.

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This working paper highlights the need for greater room for cooperation between businesses in the fight against climate change and the promotion of other vital environmental sustainability objectives – particularly in the light of the EU (and other) green deals. It shows how competition law (and, even more, the fear of unnecessarily restrictive or unpredictable competition law enforcement) is standing in the way of this. It identifies the key benefit for business, governments and society as a whole. It shows how the tide is turning on this and sets out proposals for further action by competition authorities, governments, international bodies, business, advisers and other stakeholders.

This paper focuses on climate change and the environment for two principal reasons. First, the world faces a climate emergency and this has to be the number one priority. Second, while other concerns (e.g. worker’s rights) are very important, bringing wider concerns into the “sustainability” net is more controversial and risks diluting or delaying urgent action to help competition law accommodate the fight against climate change.

While primarily focused on competition law and sustainability agreements, Annex 1 focuses on the need for sustainable development to be at the heart of state aid law and the need for further “green reform”.