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Climate | 27 April 2022

Revised draft Horizontal Guidelines on Sustainability Agreements

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Revised draft Horizontal Guidelines on Sustainability Agreements

ClientEarth and Simon Holmes’ contribution to the Commission’s public consultation 

We find much to welcome in the Commission’s new Chapter 9 on Sustainability Agreements of the Horizontal Guidelines– particularly the relatively broad definition of sustainability; clarification of where sustainability agreements may fall outside Article 101 TFEU completely; the guidance on standardisation agreements; the recognition of the broad benefits of sustainability agreements; and the improvements made to how consumers may receive a “fair share” of these (particularly the existence of out-of-market benefits in the form of collective benefits).

However, the Commission can and must go further if it is to enable business to cooperate on sustainability issues to the extent necessary to fight climate change and put our economy on a sustainable basis.

The principal modification required is a move away from the “full compensation” theory and towards the “fair share”/ polluter pays approach required by the Treaties. In particular, a more global approach would allow a better consideration of out-of-market benefits such as the protection and restoration of biodiversity as a whole, the reduction of greenhouse gas emissions, the reduction of pollutants, the provision of clean air, the prevention of de-forestation – including when those would be located outside of the EU.