Competition law: a bridge or a barrier to sustainability?

The climate change emergency is driving governments and companies around the world to set increasingly ambitious sustainability targets – yet the pace of progress continues to be slow. What is becoming clear is that industry-wide collaborations will be key to effect real and swift progress – such as allowing companies to undertake joint research, commit to binding minimum standards and agree to phase-out the least sustainable products in order to create sufficient impact. State aid may be necessary as companies seek to implement transformation processes that require substantial investment, and some mergers may be inevitable to drive the sustainability agenda.

Competition law is, however, sometimes seen as a barrier to companies hoping to take the lead in this area. In particular, there is concern that the current framework – which has traditionally focused on direct consumer benefits in the short- to medium-term – is ill-equipped to recognise and quantify wider and longer-term societal benefits. At the same time, regulators are directing their gaze towards transparency and disclosure, with the aim to prevent “greenwashing”.

Throughout 2020, European antitrust authorities showed that they are ready and willing to take a more flexible approach to the assessment of green collaborations and to drive the global debate on how competition policy can best promote and support sustainability objectives. To maintain this momentum, it will now be important for companies to actively engage in constructive dialogue with the authorities around concrete sustainability initiatives and investment needs. For any changes to have a real and lasting impact, international convergence on the competition policy approach ultimately taken will also be critical, given that sustainability issues and initiatives transcend national borders. Beyond the realm of regulation, private enforcement action is gaining traction and will increasingly affect companies’ business policies and broader sustainability strategies.

In the latest episode in our Essential Antitrust podcast series, host Jenn Mellot speaks to Ninette Dodoo (partner and co-head of the firm’s competition practice in China), Paul van den Berg (partner, Amsterdam and Brussels) and Maria Dreher (counsel, Vienna and Brussels) about the current landscape and ongoing debate on how competition law might contribute to a more sustainable outcome, and what opportunities and risks companies considering green collaborations should bear in mind going forward.   

Listen to the podcast now

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To read more about these issues and developments globally, please see also our Global antitrust in 2021: 10 key themes report – Sustainability and antitrust.