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A new ICC report unveils how monopoly power can be used to accelerate climate action and tackle unsustainable practices. The report follows an analysis in 2023 which showed that competition authorities are increasingly offering business guidance on sustainability co-operation agreements. While much has been accomplished since, more remains to be done to transform competition policy from a barrier into an enabler of a sustainable economy.
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Competition policy vs sustainability goals?
Combatting climate change will require contributions on many fronts, and businesses and competition authorities alike play a crucial role in this context.
Businesses can, need and want to work together to help fight climate change and be part of the solution
However, competition authorities and legislators could and should adjust antitrust policy to ensure a more transparent and certain environment for companies to pursue sustainability goals jointly, and to assess cooperations pragmatically when the parties can demonstrate that the main objective is reaching a sustainability goal.
Competition authorities and law makers can and must do more to enable business collaboration and reduce this chilling effect.
Giving companies incentives to align their practices with sustainability and climate objectives will demand a comprehensive set of policies and regulations that cover all sectors of the economy
How far have we come in aligning competition policy with climate goals?
Businesses commonly cite a lack of clear guidelines, experience, debate and legal uncertainty as a reason for dialling back on joint initiatives with competitors aimed at addressing climate change.
In the recent past, several competition authorities have acted on those and other concerns of businesses and followed ICC’s call in 2022 to maximise efforts in aligning competition policies with global sustainability goals.
They have since published guidelines to enhance transparency in antitrust assessments and organised seminars with academic and business representatives.
The new 2024 report highlights several key points:
- The guidelines on sustainability agreements provided by competition authorities should be updated in the light of practical experience.
- Businesses need to come forward with more real-life examples of projects they would like to carry out in areas where existing guidelines do not yet provide sufficient guidance.
- Future guidelines should look beyond climate change and place a stronger emphasis on other existential threats to humanity such as biodiversity loss.
- The greatest progress in aligning competition policy with climate goals has been made in Europe. While some countries like Australia, Japan and Singapore are catching up, progress in China and the US remains a top priority.
Broader recognition of the benefit of cooperation
A general trend has evolved in the last year towards broader recognition of the potential benefits of sustainability cooperation, even as antitrust authorities stay wary of and keep taking action against greenwashing and collusion.
New green guidelines, case law and studies
The attention given to the topic has increased tremendously since the 2022 United Nations Conference of the Parties (COP27). In the report, ICC highlights that a growing number of competition authorities provide practical guidance to business to help advance green projects. This includes green guidelines and soft law documents clarifying how they assess sustainability agreements, legislative amendments, new case law, sandbox projects and seminars promoted by the agencies to keep the agenda moving forward.
More awareness of the role of competition authorities
There is growing consensus around the world that competition authorities have a key role to play in fostering sustainable development, by allowing businesses to collaborate in initiatives supporting the environment and sustainability. But not everyone is on board yet. The report identifies a particular need for US and Chinese antitrust agencies, among others, to join in the trend.
Taking the chill factor out of climate action
A progress report on aligning competition policy with global sustainability goals
In this 2023 report, ICC looks at how competition authorities are helping businesses achieve their sustainability goals, highlighting the importance of transparent policies and regulations to encourage companies to jointly pursue sustainability goals.
When chilling contributes to warming
How competition policy acts as a barrier to climate action
At COP27 in November 2022, ICC presented 12 real-world business cases of companies looking to cooperate with competitors to support the fight against climate change. They show the gloomy reality of businesses abandoning initiatives for fear of breaking competition laws.
Further, it proposes a list of dos and don’ts for businesses keen to cooperate.
Competition policy and environmental sustainability
In this 2020 working paper, ICC 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. Moreover, it sets out proposals for further action by competition authorities, governments, international bodies, business, advisers and other stakeholders.
How can competition policy further support climate action?
A key step to supporting climate action is to properly integrate sustainability economics in competition policy, taking account of market failures and collective action problems. Examples for supportive measures are guidelines that assess concrete cases involving in-depth discussions on the intersection between sustainability and competition.
How is ICC contributing to the fight against climate change from an antitrust perspective?
Leveraging our diverse and experienced global network, ICC continues to provide real-world business cases of companies looking to cooperate with competitors or take sustainability-driven actions to contribute to the fight against climate change. The cases show initiatives that were abandoned for fear of breaking competition rules and resulting lessons learned.
By listing key developments in several jurisdictions, ICC aims to raise awareness of potential benefits and areas of sustainability cooperation. Both looking back and ahead, ICC welcomes efforts by competition authorities who adapted or plan to adapt antitrust policies in alignment with sustainable objectives.
ICC response to revised green guidelines in Japan
ICC contributed business input on new green guidelines of the Japan Fair Trade Commission revised in 2024. Through this work, ICC aims to improve clarity for corporate sustainability collaborations and to encourage further alignment with antitrust authorities globally.
