Normally, when competing companies agree strategies they are in breach of the Competition Act 1998. But an exception is made for environmental sustainability policies.

The Green Agreements Guidance, published by the Competition & Markets Authority (CMA), explains how competition law applies to environmental sustainability agreements between firms operating at the same level of the supply chain, to help them act on climate change and environmental sustainability.

It sets out the principles that apply, along with examples that businesses can use to inform their own decisions when working with other companies on environmental sustainability initiatives. It explains that the CMA does not expect to take enforcement action against agreements that are in line with the guidance. There is also a chapter dealing specifically with how agreements tackling climate change will be considered.

CMA chief executive Sarah Cardell said: “We know that tackling climate change and promoting environmental sustainability matters, and supporting businesses to do this is a priority for the CMA. So, we have developed the Green Agreements Guidance for all companies who are considering collaborating so they can understand how to agree green goals without breaking the law.

“The guidance goes further than before – it gives firms greater certainty about when agreements that genuinely contribute to addressing climate change will be exempt from competition law. Our open-door policy means we can work with companies to give them tailored informal guidance on how they can work together to boost the green economy.”

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