Why Sustainability Needs Antitrust

Below is an overview of the in-depth Environmental Law Reporter article, “Why Sustainability Needs Antitrust,” authored by Keller and Heckman Senior Counsel Peter de la Cruz and Partner Sheila Millar, published on June 3, 2024.

Governments are promoting sustainability initiatives, including circular economy, recycling, and climate change. The success of those initiatives rests on both individual efforts and increased collaboration. Antitrust asks whether collaboration among competitors will harm competition. Precisely because the social value of sustainability is widely recognized, companies may mistakenly assume that good intent is an antitrust defense. That is not true, even if the action advances government environmental and social policies. 
 
Sustainability and antitrust have laudable goals, but neither precisely answer how their goals are best achieved in any particular situation or identify when past solutions need to be reconsidered for changing circumstances. Sustainability sets more expansive goals for the planet and its people, while antitrust seeks to preserve competition and prevent joint action by private entities that harms competition or manipulates markets. 
 
Globally, countries are taking different approaches, informed by their varying competition laws, market conditions, and histories. However, the probability is low for new legislation in the United States that creates a sustainability exemption from antitrust laws, and the need to act is increasingly urgent. The logical and expedient approach is for businesses to work together to advance sustainability goals consistent with antitrust considerations. Further, ignoring antitrust may lead to less competition and less innovation in the long term, clearly antagonist to sustainability goals. These are not aspirations or academic projections, but realistic objectives based on the authors’ experience in counseling companies and associations seeking to improve their sustainability and ESG performance.

The article demonstrates that antirust:

• Can help ensure healthy competition in markets relevant to sustainability and avoid harm to competition from standard-setting, certification, and statistical programs that might hinder innovation or unfairly exclude competitors; 
• Does not consider whether an action promotes or deters sustainability, nor is that a proper role for competition authorities; 
• Reviews of competitor collaborations need to consider the context and structure of modern markets, as do sustainability evaluations; and 
• Allows meaningful and constructive joint efforts to promote sustainability. 

Antitrust is not an enemy of sustainability goals, but an essential companion and a helpful analytical tool in finding the optimum balance among sustainability’s goals to maintain modern markets that support competition-driven efficiencies and innovation, which promote consumer choice and truthful commercial communications.

To read more about this topic, please click here for the full article, “Why Sustainability Needs Antitrust,” published in the Environmental Law Reporter on June 3, 2024. If you have questions, please do not hesitate to contact the authors, Peter de la Cruz (delacruz@khlaw.com) and Sheila Millar (millar@khlaw.com).