Businesses call for changes to competition rules to boost collaboration on climate change

Businesses call for changes to competition rules to boost collaboration on climate change

Nicole Kar

Nearly six in ten businesses have had to walk away from cross-industry environmental initiatives because the legal risk was too high, according to new research by Linklaters.

This is despite an overwhelming number of businesses (93 per cent) expressing a desire to work closely with peers in responding to climate change. 

As competition authorities around the world relax competition rules in a range of sectors to allow for essential cooperation to respond to the implications of COVID-19, businesses would welcome a similar approach for sustainability initiatives.

In a poll of 200 sustainability leaders across five countries, over a third (36 per cent) want to see an exemption from competition rules for sustainability and an additional third (32 per cent) are calling for explicit guidance from competition authorities on what counts as lawful and unlawful cooperation.

Nicole Kar, head of UK competition at Linklaters, said: “Mounting social, political and investor pressure is being directed at companies to tackle climate change issues. Whilst responses will vary across industries depending on the challenges they face; a consensus is forming that greater collaboration between players is needed in order to bring about long-lasting and radical change.

“This remains true in the current crisis where there is an expectation that corporates receiving government money will have strings attached in terms of achieving government policy objectives, including sustainability. 

“In addition, authorities around the world have responded rapidly to provide exemptions from or comfort that competition law will not be invoked where necessary in those sectors most affected by COVID-19. This should provide a blueprint for how competition law is flexible enough to accommodate action in response to a crisis, namely the climate emergency we face. Companies should be encouraged to work together for the benefit of all citizens where it is necessary for the greater good.”

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