Charting a path to successful sustainability partnerships
By Dan Wilcock, Head of Sustainability Governance and Michael Cooray, Sustainability Governance Intern
UN Global Compact Network Australia
Charting a path to successful sustainability partnerships
Dan Wilcock and Michael Cooray
In alignment with SDG 17 – Partnerships for the Goals, collaboration between businesses is essential to help advance sustainability goals. Yet businesses need to keep a careful lookout in developing collaborative initiatives, to avoid foundering on the rock of competition law.
The value of sustainability partnerships
Tackling some of the toughest global challenges cannot be achieved by one company or sector alone. Working in partnership can often lead to greater impact.
Business collaborations are a crucial mechanism to achieve sustainable development, as contemplated by the Sustainable Development Goals (SDGs) that form the heart of the United Nations’ 2030 Agenda for Sustainable Development. Indeed, SDG 17 – Partnerships for the Goals, explicitly acknowledges the important role of multi-stakeholder partnerships that mobilise and share knowledge, expertise, best practice, technology and financial resources, to support the achievement of the SDGs. For example, multi-party collaborations may be the most effective way to quickly develop and bring to market new processes and technologies to support the shift to a more sustainable society.
The interplay with competition law
When planning and implementing collaborative initiatives on sustainability, businesses should consider applicable competition laws and regulations.
Competition regulators around the world may scrutinise sustainability collaborations, particularly those involving competitors, for possible violations of cartel provisions that prohibit price-fixing, bid-rigging, market sharing and output restrictions.
In Australia, the Competition and Consumer Act 2010 (CCA) bans business behaviours that damage competition, including cartel agreements and other behaviours that substantially lessen competition.
However, it is critical to ensure that competition law does not function as an obstacle to sustainability collaborations, out of fear that businesses will be inappropriately subject to regulatory action by competition law enforcers.
For example, the UN Environment Programme’s Net-Zero Insurance Alliance (NZIA) was formally discontinued on 25 April 2024, after being undermined by allegations of anti-trust/competition law violations in the United States. Responding to attacks on the NZIA, UN Secretary-General António Guterres observed:
“Fossil fuel companies must also cease and desist influence peddling and legal threats designed to knee-cap progress. I am thinking particularly of recent attempts to subvert net zero alliances, invoking anti-trust [competition] legislation.”
The Australian Competition and Consumer Commission’s approach
Governments are pivotal in providing clear reassurance that sustainability collaborations have an important and legitimate role – and outlining how competition law can better support the transition to a low-carbon economy and sustainability goals.
Following the lead from competition authorities overseas, on 8 July 2024, the Australian Competition and Consumer Commission (ACCC) released a draft guide on sustainability collaborations and Australian competition law for public comment. The draft guide provides an outline of how Australian competition law might apply to sustainability collaborations, while relying significantly on the “authorisation” mechanism in Australian competition law. The ACCC may grant an authorisation for any conduct that could raise concerns under the competition provisions of the CCA when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.
The ACCC received over 30 written submissions in response to the draft guide. The submission by the UN Global Compact Network Australia was developed after a consultation with business participants earlier this year and makes several suggestions to improve the guide. The ACCC is currently considering the feedback it has received and is aiming to publish a final version later this year.
Current Australian examples of sustainability collaborations
- ResiLoop: ResiLoop is an initiative of the Australian Resilient Flooring Association to establish and operate a voluntary, industry-led product stewardship scheme to collect and recycle resilient flooring waste, funded by a levy on certain categories of products. ResiLoop sought authorisation from the ACCC on behalf of itself, its members and participants – which would provide it with an exemption from the operation of competition provisions of the CCA in relation to the scheme. In August 2024, the ACCC announced that it is proposing to grant authorisation, with a final determination anticipated in late 2024. ACCC Commissioner Liza Carver said “The Scheme is likely to result in environmental benefits by diverting resilient flooring waste from landfill to instead be reused.”
- Soft Plastics Taskforce: Following the suspension of the REDcycle collection program in late 2022, Coles, Woolworths and ALDI sought to collaborate with each other to recycle stockpiled soft plastics and to facilitate the resumption of an in-store collection program. The parties sought authorisation from the ACCC for this initiative and were granted interim authorisation in November 2022, leading to the establishment of the Soft Plastics Taskforce. In June 2023, the ACCC granted authorisation for one year to allow the supermarkets to collaborate with the Taskforce to process the plastic stockpiles, followed by a further interim authorisation in July 2024.
About the United Nations (UN) Global Compact Network
As a special initiative of the UN Secretary-General, the United Nations (UN) Global Compact is a call to companies everywhere to align their operations and strategies with ten universal principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of UN goals. With more than 20,000 companies, 5 Regional Hubs, 62 Global Compact Country Networks covering 73 countries, and 15 Country Managers establishing Networks in 34 other countries, the UN Global Compact is the world’s largest corporate sustainability initiative.
In Australia, UN Global Compact Network Australia (UNGCNA) brings together Australian participants of the UN Global Compact, including over 65 listed companies, other businesses, non-profits and universities, to advance the private sector’s contribution to sustainable development. We connect, enable and lead businesses and stakeholders to create a sustainable future by supporting businesses to act responsibly and helping them find opportunities to drive positive business outcomes.