ACCC Publishes Draft Guide on Sustainability Collaborations and Competition Law

Australia, Finance

The Australian Competition and Consumer Commission (ACCC) has recently published a draft guide on sustainability collaborations and Australian competition law.

The guide aims to help businesses understand the potential competition law risks when aiming for positive environmental outcomes through collaborations.

The ACCC Acting Chair Mick Keogh emphasized that as Australia moves towards a more sustainable economy, businesses may need to work together to achieve shared environmental goals.

However, such collaborations may risk breaching competition law, which is where ACCC authorisation becomes relevant.

ACCC authorisation grants businesses a legal exemption from the competition provisions in the Competition and Consumer Act.

The ACCC considers that authorisation is a viable option when it is satisfied with the likely public benefit resulting from the collaboration outweighs any potential harm to competition.

The ACCC can take a broad range of public benefits into account, such as those that contribute to protecting the environment and promoting sustainability.

These benefits may include reduced greenhouse gas emissions, improved biodiversity and water systems, and waste reduction.

The ACCC has already authorised various sustainability-related collaborations, such as industry stewardship schemes, joint buying of renewable energy, and collaboration to manage disruptions in recycling systems.

The draft guide provides businesses, peak bodies, and other stakeholders with essential information on the necessary steps to address competition law risks when collaborating for the environment.

To ensure the guide’s effectiveness, the ACCC is seeking feedback from relevant parties, with the consultation period closing on 26 July 2024.

This coincides with the ACCC’s enforcement and compliance priorities for 2024-25, which focus on consumer, product safety, fair trading, and competition concerns related to environmental claims and sustainability.

Considering the rise of ‘greenwashing,’ or false environmental claims, the ACCC published a ‘Making environmental claims’ guide in December 2023 to enhance the integrity of environmental and sustainability claims made by businesses, protecting consumers from misleading information.

The ACCC anticipates releasing the finalised guide on its website by the end of 2024, providing crucial guidance for businesses seeking to collaborate and enhance the competitive landscape while prioritizing sustainability.