CCSI and Sabin Center Release New Report – Antitrust and Sustainability: A Landscape Analysis
Today, the Columbia Center on Sustainable Investment (CCSI) and the Sabin Center for Climate Change Law have released a new report – Antitrust and Sustainability: A Landscape Analysis. The report gives an overview of the broad purview of antitrust law, and the myriad and complex ways in which it intersects with and affects sustainability goals.
This month, Congress has held both ‘anti-ESG’ hearings and has brought Lina Khan, the Chair of the Federal Trade Commission, to testify in an effort to undermine her stronger approach to antitrust enforcement. The intersection of ESG and financial risk management issues, sustainability concerns, and antitrust principles is increasingly confused, and therefore it is increasingly critical to separate narrative fiction from legal reality.
Within the past year, antitrust language and concepts have been weaponized to undermine private-sector collaboration on climate initiatives. For example, financial sector climate alliances and other investor coalitions have been accused of boycotting fossil fuel companies, in violation of antitrust principles. And state-level anti-ESG bills have similarly employed “boycott” language in ways that would not be considered antitrust boycotts under traditional legal principles.
More broadly, over the past few years, there have been growing academic, political, and social debates about the boundaries of competition and collaboration in markets for non-economic benefits, including efforts to mitigate environmental impacts, to accelerate the energy transition, to protect human rights, and to advance worker rights and prosperity. Narratively, antitrust is said to be standing in the way of private-sector coordination because of its focus on competition. But, the big questions antitrust seeks to answer are: who should be allowed to coordinate in markets? For what purposes? And in whose benefit? Competition policy is a profound shaper of market structure.
“It is now widely accepted that competition policy – both its aims and its enforcement – has wider societal impacts beyond competition, including effects on democracy, economic inequality, growth and innovation, racial and gender imbalances, privacy, geopolitical implications and more. Its effects on the environment can also no longer be ignored,” said Denise Hearn, a Senior Fellow at the Columbia Center of Sustainable Investment and co-author of the report.
Increasingly, antitrust law is said to be chilling necessary private-sector action to address climate and other sustainability-related challenges. “The private sector and financial actors have tremendous power – and therefore responsibility – to ensure economic activity is positively aligned with global goals and rights,” said Lisa Sachs, Director of the Columbia Center on Sustainable Investment and co-author of the report. “Their power and potential to influence market participants is greater when they can collaborate with others in their sector or with other investors or financiers – which also makes such collaborations ripe for political attack. The questions, therefore, about what forms of collaboration are desirable and permissible are timely and urgent.”
In Europe and the UK, competition agencies have included sustainability analyses in their enforcement agenda and have issued updated competitor collaboration guidelines. In the US, the agencies have been largely silent on the issue due to political constraint and differing theories of change. The US is also a complex jurisdiction, as antitrust law is enforced at both the state and federal level, and across multiple federal agencies; private plaintiffs can also bring suits.
“The purpose of this report is to provoke and support engaged and informed conversation among policymakers, private firms, and the wider public around the appropriate competition policy framework which can support sustainable development broadly. It considers the range of inherent complexities and aims to chart a path forward in a thoughtful manner,” said Cynthia Hanawalt, Senior Fellow at the Sabin Center for Climate Change Law and co-author of the report.
Ultimately, competition policy and its enforcement agencies are one component of a broad policy framework that shapes private sector activities and their alignment with, or contributions to, climate or other sustainability-related policy objectives. Incentivizing private actors to align their practices with sustainability and climate goals will require policies and regulations throughout the economy. Antitrust policies and agencies should be a coherent part of this robust policy framework.
For media inquiries, please contact:
Tiffany Challe, 914-434-8975, Communications Associate at Sabin Center (email@example.com)
About the Columbia Center on Sustainable Investment
The Columbia Center on Sustainable Investment, a joint Center of Columbia Law School and Columbia Climate School, is an applied research center that works to develop critical understanding, practical approaches, and governance tools for governments, investors, communities, and other stakeholders to maximize the benefits and minimize the potential harms of international investment for sustainable development.