Ad Hoc Expert Meeting on Competition, Consumer Protection and Sustainability

Sustainability has become an important area of discussion in the competition and consumer protection law and policy circles. Competition, consumer protection and sustainability are all intersecting. Consumer empowerment and business efforts can significantly contribute to promoting sustainable consumption and production and to the achievement of the United Nations Sustainable Development Goals. When empowered consumers value the importance of sustainable products and make well-informed decisions, businesses have an incentive become more sustainable.

Competition and sustainability

Competition law is, in principle, aligned with sustainability goals. However, there may be tensions between the two in certain circumstances. For instance, it is costly to invest in sustainable products which may in turn lead to price increases and hamper competitiveness. A firm would not take the risk of incurring additional costs to become more sustainable if it is the only one to do so. To avoid such a risk, firms may need to cooperate or collaborate on sustainability initiatives with their competitors, which is in principle prohibited by competition law.

Competition authorities need to consider to what extent cooperation or coordination on sustainability can be permitted. With that in mind, the European Commission, in March 2022, launched a public consultation on two draft revised Horizontal Block Exemptions (Research and Development, and Specialization) and Horizontal Guidelines which included a new chapter on the assessment of horizontal agreements pursuing sustainability objectives.[1]

The first session will address different views and perspectives for encouraging sustainability initiatives on the one hand and ensuring market competition on the other hand.

Questions for discussion:

• Should competition authorities shift to a more lenient approach regarding sustainability agreements? To what extent should competition authorities consider out of-market efficiencies in their competition considerations?
• Apart from sustainability agreements between competitors, what areas of competition law enforcement could conflict with sustainability initiatives? How should competition authorities approach so called “green killer acquisition”?
• To date, apart from the European Union Green deal, there may not be sustainability initiatives with a regional dimension. In the future how can regional economic organizations contribute to coordination between competition and sustainability objectives?
• What are the challenges developing countries are facing and how can they be addressed? How can UNCTAD assist them in responding to those challenges?

Consumer protection and sustainability

Consumer protection law and policy plays a central role in promoting sustainable development. The United Nations Guidelines for Consumer Protection (UNGCP) contain detailed and valuable recommendations on improving sustainable consumption in order to harness the transformative power of consumers. Initiatives include consumer education and awareness-raising initiatives on sustainability and as well as monitoring green claims for consumers’ informed decisions. Businesses should engage in sustainability initiatives in a responsible manner such as Voluntary Sustainability Standards (VSS) and adhere to BioTrade Principles as means to get their activities towards sustainable outcomes. The rights of consumers to safe and effective products and services go together with their responsibility to help preserve the planet. Member states need to bring up more holistic and strategic initiatives and tools to nudge consumers towards more sustainable consumption habits.

The second session will address how to shape and enhance consumer empowerment to promote sustainable consumption and production.

Questions for discussion:

• What are the challenges developing countries are facing in implementing initiatives on promoting sustainable consumption?
• How can member States design and formulate consumer protection policy to nudge consumers towards sustainable consumption?
• How can businesses better communicate with consumers to encourage sustainable consumption? For instance, how can businesses induce consumers to consider biodiversity in their purchasing decisions? How can businesses enhance the credibility of Voluntary Sustainability Standards vis à vis consumers?
• How can international cooperation, namely through United Nations agencies and other international organizations, help to further promote sustainable consumption?