Competition law and sustainability - A study conducted for the SPF Economy by Slo and Simont Braun
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This executive summary presents the key findings of a study conducted by Slo, in partnership with Simont Braun, for the FPS Economy. The study explores how companies operating in Belgium perceive the interaction between competition law and sustainability cooperation, identifying key challenges and pathways to enable more effective and legally secure collaboration for the transition.
Link to the study (in French): https://economie.fgov.be/fr/file/7472289/download?token=CEVWuG1
Table of contents
1.Context
In response to the environmental and climate crisis, and the broader sustainability demands, an increasing number of businesses are launching collaborative projects to reduce their environmental and climate footprint while improving their social and society-related practices. Many of these initiatives take the form of so-called “green” or “sustainability” agreements. These agreements typically involve information exchange and the adoption of common practices. They play a pivotal role in supporting the sustainable transition of the economy. In particular, they help to reduce the competitive disadvantages faced by trailblazing businesses that adopt more sustainable production methods, which are often more expensive (first-mover disadvantage). Furthermore, they enable the sharing of resources, infrastructure, and expertise, accelerating environmental and social transitions in sectors such as the manufacturing industry, agriculture, and logistics. Moreover, cooperation between competing businesses can result in efficiency gains that benefit consumers while increasing the share of sustainable consumption in overall consumption patterns.
2.Problem definition
However, the willingness to cooperate with other market players — including direct competitors — is hindered by a persistent fear of potentially breaching competition law. This legal uncertainty represents a significant barrier to the development of sustainability-focused collaborative initiatives.
3.Objectives of the study
This study explores whether Belgium should introduce additional mechanisms, similar to those adopted by other Member States, in order to better support businesses that are committed to the sustainable transition. It examines the legal conditions under which Belgian businesses can enter into sustainability agreements without violating competition rules. The study contributes to the broader EU-level reflection on reconciling sustainability objectives with competition law, which remains largely focused on maximising consumer welfare, based on assessing traditional criteria such as price, quality, and freedom of choice.
3.1.Part. 1: Overview of Belgian and European Competition law
Part I provides an overview of the current legal framework. It analyses to what extent Belgian and European competition law is applicable to sustainability agreements, with particular attention to possible exemptions and the assessment criteria used by competition authorities.
3.1.1.Classification of sustainability agreements
Sustainability agreements between businesses raise competition law concerns under Article 101 of the TFEU and Article IV.1 of the Belgian Code of Economic Law (CEL) only if the restriction of competition is by object, or if they have appreciable negative actual or potential effects on competition. An agreement restricts competition within the meaning of Article 101(1) of the TFEU and Article IV.1(1) of the CEL if it potentially impacts the parameters of competition in a given market.
There are three categories of agreements:
Category 1: agreements which have neither the object nor the effect of restricting competition;
Category 2: agreements that restrict competition but that are not prohibited because they meet the exemption criteria stipulated in Article 101(3) TFEU / IV.1(3) CEL;
Category 3: prohibited agreements between businesses.
Not all sustainability agreements necessarily restrict competition, and not all restrictive agreements are prohibited. It is therefore necessary to distinguish between sustainability agreements that are prohibited by European and Belgian competition law and those that are not.
3.1.2.European Commission Position
The 2023 adoption of the European Commission’s Guidelines on horizontal cooperation agreements marks a significant development in this field. For the first time, a specific chapter is dedicated to sustainability agreements. This text clarifies under which conditions these agreements are considered compatible with Article 101 TFEU, distinguishing in particular between those that are not prohibited (because restriction is not their object and because they do not have appreciable negative effects on competition) and those that may benefit from the exemption stipulated in Article 101(3) TFEU. The Guidelines also outline cases where certain sustainability agreements are presumed to comply with EU law, and detail the application of the four conditions for exemption, especially concerning the fair distribution of benefits to consumers.
The possibility of exempting an agreement that generates positive effects – particularly environmental effects – outside the relevant market, but at the expense of consumer welfare in that market, currently seems to be ruled out. Recognition of long-term collective benefits, or benefits realised outside the territory of the Union, also remains limited. However, that may change as authorities become more attuned to the specific needs of businesses that are committed to sustainability.
The analysis shows that, while some agreements qualify for exemption based on the efficiency gains they generate for consumers, the current approach continues to focus largely on immediate, measurable, and market-related benefits. This approach leaves little room for the assessment of systemic, delayed, or diffuse benefits, particularly when they relate to the environment or to society.
3.1.3. Vertical agreements
Vertical agreements (between businesses at different levels of the supply chain) are generally viewed favourably under competition law and can be a valuable tool to support sustainable distribution models. Although the European Commission does not categorise these agreements separately, they may pursue sustainability goals and qualify for the exemption laid down in Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the TFEU, provided that they meet the general conditions for application of that regulation.
3.1.4. Risk of greenwashing
The risk of greenwashing is raising increasingly serious concerns over the misuse of sustainability agreements to mask anti-competitive practices. Some national authorities, such as Germany’s Federal Cartel Office (Bundeskartellamt), already imposed sanctions on allegedly green agreements that were in fact designed to restrict competition. A distinction is needed between consumer greenwashing, which refers to misleading claims targeting consumers, and greenwashing in competition law, which refers to a collaboration that is framed as sustainable but that is actually intended to force competitors out of the market or to fix prices. The study discusses several high-profile cases (“DSD”, “GGA”, “Agrardialog Milch”) that exemplify this risk. Some experts even argue that competition restriction is the purpose of these practices, and believe that they should be marked as such and serve as an aggravating factor when determining sanctions.
3.2.Part. 2: Benchmarking of national initiatives in the EU
Part II provides a comparative analysis of eight jurisdictions: the Netherlands, Greece, Austria, Germany, Italy, France, Portugal, and the United Kingdom. Several national authorities introduced guidelines or piloted innovative tools: a greater integration of the sustainability concept in competition analysis, open-door policies, prior notification procedures, and regulatory sandboxes.
These tools aim to remove legal uncertainty, secure sustainable investments and foster leading-edge initiatives, while containing the restrictive effects on competition.
The Netherlands and the United Kingdom developed advanced guidelines, incorporating a more flexible interpretation of certain exemption conditions and explicitly recognising diffuse or long-term environmental benefits. Greece distinguished itself by setting up a sustainability sandbox, providing a structured framework for legal experimentation. Austria introduced a specific legal exemption for environmental goals, accompanied by guidelines. France, Portugal and Italy adopted a more procedural or sectoral approach (notably in agriculture), while Germany combines individual decisions, public consultations, studies, and reflections on modernising the competition framework and policy. These initiatives illustrate a shared ambition to align sustainability and competition law, albeit with varying levels of innovation and scope depending on the country.
3.2.Part. 3: Analysis of sustainable cooperation practices between companies - perceptions, obstacles, and levers for action in the context of competition law
Part III is based on an empirical analysis of the practices and perceptions of Belgian businesses, using a confidential survey distributed to organisations in a variety of sectors, including energy, logistics, agri-food, construction, finance, and NGOs. Through a structured questionnaire and several qualitative interviews, this field approach allowed the researchers to gather accurate data on how businesses perceive the current legal framework, the challenges they face in their sustainable cooperation projects, and the changes they deem necessary. Although not statistically representative of the Belgian economy as a whole, the results provide significant insights into the perceived obstacles, the grey areas of the current framework, and the expectations expressed by businesses.
The survey results show that all the businesses surveyed are involved, to varying degrees, in sustainability initiatives carried out in partnership with other entities, such as suppliers, customers, or sometimes even competitors. These collaborations take a wide variety of forms, ranging from sharing environmental data to joint research projects, circular supply chain management, and the development of sustainable labels. However, one-third of respondents reported having already encountered difficulties related to competition law, and 17% have even had to abandon or adjust a project for this reason. Moreover, the majority of businesses surveyed pointed out a lack of clarity regarding the applicable rules, particularly regarding the acceptable limits for information sharing or the very definition of a compliant sustainability agreement.
The results highlight a clear need for guidance: 83% of businesses are calling for clear and contextualised national guidelines with sector-specific examples. Many of them also emphasise the need for support in the early stages, through an open-door policy or a secure pre-assessment mechanism, which would enable them to test the compatibility of their projects without exposing themselves to high legal risks. The idea of a fast track or sandbox dedicated to sustainability projects is attracting considerable interest, particularly from businesses facing dissuasive regulatory deadlines.
In addition to these general trends, the study provides qualitative insights into certain categories of stakeholders, enriching the analysis of the quantitative data. For example, the interview with an agri-food business highlights internal tensions linked to the complexity of collaborative projects: the departments tend to operate separately, and knowledge of competition law does not always extend beyond the legal departments. The business also reports an urgent need for clarity on what can be shared with its partners, for example in terms of carbon emissions, without running the risk of being accused of collusion. Furthermore, significant efforts are being made to align definitions, for example in the field of regenerative agriculture, but differences in interpretation between partners remain an operational obstacle.
The perspective of an environmental organisation, also included in the analysis, provides additional insight into the current limitations of the framework. The organisation points out that some cooperation initiatives with a real potential for impact, particularly those aimed at withdrawing financial support for polluting activities, are now being abandoned for fear of sanctions, especially in more conservative jurisdictions. It calls for an explicit recognition of the transformative value of such forms of cooperation, even if they lead to a temporary reduction in competition.
Lastly, the position of the International Chamber of Commerce (ICC), as set out in its 2023 Report, confirms these findings. The ICC calls on regulators to adopt a more flexible and pragmatic interpretation of competition law, taking into account the economic realities and market failures that hinder sustainability initiatives. It stresses the need for greater alignment between jurisdictions to prevent legal uncertainty from deterring international initiatives. Above all, it warns of a growing paradox: businesses that are transition leaders are sometimes at a competitive disadvantage because their efforts are not always protected, or their true value is not recognised.
4.Conclusions and recommendations
In light of the in-depth analysis of the initiatives implemented in several European jurisdictions, complemented by feedback from Belgian businesses, this study highlights five key findings and formulates a series of specific recommendations aimed at improving the Belgian regulatory framework for sustainable cooperation between businesses.
These recommendations are:
1. Clarify – Develop national guidelines
The first step is to clarify the rules by developing national guidelines that are adapted to the specifics of Belgium, illustrated with practical examples from the Belgian economic fabric and good practices abroad.
These guidelines are to provide a clear framework, illustrated with sectoral examples, distinguishing between different types of sustainability agreements and specifying the conditions for compliance with Belgian and European competition law.
2. Guide – Establish an ex-ante support and advisory policy
Secondly, proactive support for businesses is recommended, through an open-door policy and/or the development of innovative tools such as a green fast track for projects with a significant sustainable impact, or a legally regulated sandbox, similar to the one set up in Greece.
Moreover, the study recommends that these mechanisms are designed to evolve, with a regular evaluation system involving all stakeholders, including public authorities, legal experts (particularly those specialising in competition law), businesses and business networks, and sustainability experts.
3. Assess – Establish a participatory follow-up system
A multi-stakeholder committee could ensure the regular assessment of the implemented mechanisms, suggest specific adjustments, and compile an annual report based on shared indicators.
4. Sanction – Combat greenwashing
To ensure the consistency of the overall framework, it is suggested to strengthen the mechanisms that combat greenwashing, by incorporating this dimension as an aggravating factor in competition law analysis and by supporting the set-up of independent verification tools.
5. Coordinate – Improve European and international alignment
Belgium should be part of the European dynamic and actively participate in international forums to promote the convergence of standards and practices.
6. Raise awareness – Equip businesses
Awareness-raising materials (such as video clips, infographics, FAQs), sector-specific workshops, and a network of “competition and sustainability experts” would help to strengthen trust and improve legal certainty around collaborative projects.
Finally, the study highlights the need to align competition law and the sustainable transition more clearly. This does not mean relaxing the requirements but rather putting them at the service of an economy that respects the limits of our planet through a robust, coherent and conducive regulatory framework. That would enable the Belgian strategy to be part of a broader movement to adapt competition policies and pave the way for sustainable innovation and ecological resilience.
Written by Géraldine Wirtz, co-founder of Slo and Cédric Henet, Senior Associate at Simont Braun
