Trusting Corporations by Weakening Antitrust?

This September, many socially conscious corporations have donated to climate change mitigation and sustainability. Ikea has devoted $44.6 million to the We Mean Business coalition, which began at a UNFCCC Business and Industry Day to provide a platform to “amplify the business voice and catalyze bold climate action.” Mars just pledged $1 billion in investments towards climate change, poverty and scarcity of resources by targeting renewable energy, food sourcing, industry coalitions, and support for farmers. Energy companies such as Pacific Gas and Electric have pledged their support for renewable energy. On a global scale, even supermarkets have collaborated to show their environmentally progressive intent for the future (although they were ultimately shut down because of antitrust and collusion issues). This current corporate support is a good sign for climate change as corporations prove their influence on climate policy.

Corporate Influence and Climate Change

Click on image to see full spectrum of corporate stances on environmental sustainability.

In light of all of this, legal scholar, Inara Scott, asks if U.S. antitrust law makes it “nearly impossible for corporations to collaborate on sustainability initiatives.” Scott asks whether the Sherman act (the original 1890 statute that broke up major U.S. monopolies) is actually a barrier for corporations to act sustainably because it outlaws collusion and collaboration amongst companies. Scott tells a story of Proctor & Gamble and Unilever. In the late 2000s the two companies planned to release a more efficient laundry detergent but were concerned about consumer reactions. So to avoid a price war they agreed to freeze their prices and market share. This violated antitrust laws so when regulators in Europe found out, they fined the companies more than 300 million Euro.

Two brand names tried to work together to fight climate change rather than each other.

Consumer protection was the ideal that spurred current U.S. antitrust law.  Scott invokes consumer to protection to muse that companies should be able to argue that collusion and collaboration is best for long term consumer protection. Scott imagines that long term consumer protection would include sustainability goals that consider the scarcity of resources and is mindful of GHG emissions. Weakening antitrust policy would allow corporations to collaborate and respond to the problems of sustainability, resource depletion, and climate change in a market efficient manner. A particular issue with Scott’s antitrust theory is whether the American courts or legislators could trust corporations enough to allow them the power to collaborate.

Ikea displays their commitment to renewable energy in its stores.

Ikea displays their commitment to renewable energy in its stores.

Scott’s solution is to create a regulatory counsel to analyze cases of collusion for environmental protection. This will alleviate concerns about corporate greed and corruption. There is a lot of distrust amongst American consumers and American corporations. Capitalist ideals often push corporations to strive for the lowest cost with maximum benefit, often forsaking consumers or the environment. But “’sustainability issues are profitability issues so [Scott] think[s] the altruism is [of companies] tied up in the long-term health of these companies.” So between corporate environmental sustainability, corporate collaboration, and government regulation – climate change policy may look more and more like business.