CMA launches Green Agreements Guidance to help businesses co-operate on environmental goals

The Competition and Markets Authority has published a press release to inform of the issuance of its final guidance as to agreements made between companies, including competitors, to promote sustainability in UK without violating Chapter I provisions of the Competition Act 1998. The Competition Act prohibits agreements, practices, and conduct that may have the effect of preventing, restricting, or distorting competition within the UK. This includes actions such as price-fixing, market-sharing, and other anti-competitive agreements.
In view of the fact that firms are increasingly forced to cooperate with other firms on the same business level in the supply chain (horizontal cooperation or agreements) to promote sustainability, this guidance sets out
– key principles and criteria that apply and shall be considered for any such agreements;
– an illustrative list of sustainability agreements that are deemed not to be violating the Competition Act;
– an illustrative list of sustainability agreements that are likely to violate the Competition Act;
– an illustrative list of agreements that are violating the Competition Act, but may qualify for an exemption under the Act; and
– a general exemption for climate change agreements.
The CMA notes that businesses can use this guidance to inform and shape their own decisions when working with other companies on environmental sustainability initiatives. Furthermore, the CMA states that it does not expect to take enforcement action against agreements that are in line with the guidance.