THE Competition and Markets Authority (CMA) has called on the introduction of legislated definitions for ‘potentially misleading’ terms like ‘recyclable’ and ‘carbon neutral’.
It said that it would help make it easier for shoppers to make sustainable choices, with standard definitions for commonly used terminology aiding shoppers to compare similar items.
Furthermore, the CMA said it would compliment its work on the green claims code, which helps businesses accurately communicate their green credentials to shoppers in an ‘honest and transparent’ way.
It added that it is possible for companies to work together to lessen the environmental impact of their sector by pooling resources or expertise without breaching competition rules – thus there is not ‘sufficient’ evidence that competition law prevents firms from acting sustainably, it said.
However, the CMA has found that more clarity about what is, and is not, legal would help firms work towards sustainability goals without worrying that they are breaking the law in the process.
In its advice, the CMA has expressed a view on the ongoing international debate around the circumstances in which agreements that restrict competition can qualify for exemption under competition law. These agreements between businesses could include working together to reduce waste or improve biodiversity.
For an agreement to be exempt from competition law the CMA said  the businesses’ customers should receive a ‘fair share’ of the resulting benefits – which may typically be through lower prices or higher quality goods.
Overall, the CMA said it thinks that there is some flexibility under the current rules to take environmental benefits into account when considering exemptions for agreements that restrict competition, and has committed to bringing forward more detailed guidance in this area.
To build on its advice, the CMA has launched a sustainability taskforce which will lead its work in developing formal guidance; lead discussion with government, industry and partner organisations; and continually review the case for legislative change.
Sarah Cardell, general counsel at the CMA, said, “We want it to be as easy as possible for businesses and, ultimately, shoppers to make choices which are better for the environment.
“That’s why we plan to shine a light on what businesses can and can’t do under current competition and consumer laws, as well as advising the government on changes that will help people shop more sustainably.
“Our new taskforce will take a leading role in helping to make sure the UK’s economy not only serves the interests of consumers but also delivers on its environmental responsibilities.”
