Competition Law remains a barrier to sustainability collaborations
A new survey commissioned by Linklaters has found that despite most businesses wanting to work together, 60% of survey respondents are still put off collaborating on ESG issues due to fear of breaking competition rules and the risk of litigation.
Exposure to antitrust liability, whether at the hands of an agency or a litigant, is a concern for companies when considering partnering with competitors on environmental, social and governance (ESG) issues despite the 360 pressure they are facing to improve their sustainability performance. The survey of over 500 sustainability professionals in the UK, USA, France, Germany and the Netherlands indicated that guidance from EU and UK antitrust regulators is starting to have an impact, with companies increasingly having the confidence to work together on sustainability projects. Linklaters commissioned the same survey in 2020 and have put together a new report which compares the findings to see how far the needle has moved.
Annamaria Mangiaracina, Partner in Linklaters’ Antitrust & Foreign Investment practice:
“Commitment to sustainability objectives continues to be high with 82% of those surveyed recognising the importance of working with peers to pursue sustainability goals. Indications that following the EU and UK Guidance, over half of those surveyed are prepared to take forward projects previously considered too risky are encouraging. Authorities have opened the door – businesses need to be prepared to step through.”
The European Commission, UK CMA and Dutch Authority (among others) have provided detailed guidance on when sustainability collaborations will fall outside competition rules and the approach they will take when assessing whether the benefits of a sustainability collaboration outweigh any harm to competition. However, the survey has revealed that over 1/3 of sustainability professionals are still unaware of the EU and UK guidance and around the same proportion do not feel confident that they understand what is and isn’t permitted, revealing that it is still early days.
Jonathan Ford, Partner in Linklaters’ Antitrust & Foreign Investment practice:
“We need to get to a point where sustainability leaders are no longer put off collaborating legitimately on ESG issues where needed, due to fear of breaking competition rules. Only then will we see larger strides in projects and initiatives around the green and wider sustainability agenda.”
The survey has revealed crucial progress is being made, with respondents reporting to have been involved in a range of sustainability collaborations – 34% have pooled logistics resources, 33% are working together to develop new green packaging, and 30% are working together to create a minimum standards within their sector.
Read the full report here.
Methodology
The research was conducted by Censuswide, of a sample of 502 sustainability professionals (middle managers, senior managers, c-suite and business owners) in the UK, US, Germany, France and the Netherlands, to understand the interplay between competition law and sustainability. Respondents were polled across a range of company sizes (based on annual revenue), types and sectors including corporates and financial institutions. The data was collected between 30.06.2023 – 14.07.2023. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct which is based on the ESOMAR principles.
