Competition and consumer policies can help build more sustainable economies, experts say.
© Shutterstock/ Extarz | A woman shops for organic vegetables at a supermarket in Rayong, Thailand.
Markets are failing to ensure sustainable economic and social outcomes, slowing progress towards the Sustainable Development Goals, experts said at UNCTAD’s ad hoc expert meeting on competition, consumer protection and sustainability on 28 September.
To turn the tide of businesses maximizing profits to the detriment of the planet, countries should address market failures through public policies, including those on competition and consumer protection.
“Markets can only work for more sustainable development if appropriate competition and consumer policies are in place and enforced,” said Teresa Moreira, head of competition and consumer policies at UNCTAD.
“We must provide clear guidance to businesses and information to consumers on governments’ strategic priorities.”
Power of informed consumers
Several experts called for better education and awareness initiatives to empower consumers to promote consumption that is environmentally, economically and socially sustainable, especially through their product choices.
Fighting greenwashing and simplifying the comprehension of sustainability labels is increasingly a priority for consumer protection authorities.
“Climate change is probably the biggest market failure in the history of mankind, which requires immediate action by everyone involved and justifies an extra step by competition authorities to remove any perceived legal risks of coordinated action,” said Martijn Snoep, chairperson of the Authority for Consumers and Markets of the Netherlands.
Promoting sustainable consumption
UN guidelines for consumer protection offer recommendations on how to craft policies for sustainable consumption and integrate them into other public policies.
They urge member states to develop and implement, in partnership with business and civil society organizations, strategies that promote sustainable consumption through a mix of policies.
These could include regulations, economic and social instruments, sectoral policies in areas such as land use, transport, energy and housing.
Also, they could include information programmes to raise awareness on the impact of consumption patterns, removal of subsidies that promote unsustainable patterns of consumption and production, and promotion of sector-specific best practices in environmental management.
“Sustainable consumption should be the easy option for consumers. We must work to reduce the confusion around sustainability, with marketplace actors making products safe, durable and resource-efficient, and providing clear and reliable information to better guide consumer choice,” said Peter Andrews, director of consumer rights, innovation and impact at Consumers International.
Rethinking competition policy
The experts also called for the rethinking of competition policy. Businesses around the world are increasingly taking responsibility for promoting sustainability by setting higher standards than required by applicable laws.
They often act individually but sometimes coordinated action with their competitors may be needed.
Competition law, in principle, prohibits cooperation agreements and could stand in the way of pursuing sustainability objectives.
But competition authorities are increasingly providing guidance on the types of sustainability agreements that restrict competition or not.
Empowering market actors for change
UNCTAD’s world consumer protection map shows that consumer protection law covers the promotion of sustainable consumption in only 31 of 104 countries that have provided information to the organization.
While developed jurisdictions such as the European Union and the United Kingdom have issued guidance on competition and sustainability, developing countries are yet to do so.
“The environmental, social and corporate governance agenda is directly related to the best competition practices. UNCTAD is a key forum for developing countries to reach a higher level on this issue and promote competition policy and sustainability,” said Juliana Domingues, attorney general at the Administrative Council for Economic Defense in Brazil.
UNCTAD is providing advisory services and technical assistance to developing countries so they can fully benefit from their integration into the world economy and ensure markets work for a more sustainable and inclusive world.