Dutch competition authority clears collaboration of banks in the field of sustainability reporting

In a bid to enhance transparency and comparability in sustainability reporting, the Netherlands Authority for Consumers and Markets (ACM) has cleared Dutch banks to collaborate on sustainability-related data projects (ACM press release). This approval comes after a request by the Dutch Banking Association (NVB) to assess whether such collaboration aligns with competition laws. The ACM's guidance underscores the importance of coordinated efforts in fostering sustainable business practices while adhering to existing regulatory frameworks.

ACM's approval decision

Dutch banks have received approval from the ACM to work together on sustainability reporting, particularly to improve the comparability of their reports. This joint effort is expected to benefit investors by enabling them to make more informed, sustainability-driven decisions. The NVB had requested ACM's evaluation of whether this collaboration complies with competition regulations, and ACM concluded that it does not present any risks such as increased prices or reduced service quality. This initiative involves banks sharing data and methods related to key sustainability (ESG) criteria, which they are required to report on, including looking at what data is needed, and what calculation methods are suitable and reliable to use. As part of this pilot project, the focus is on three specific sectors: transport, agriculture, and real estate. ACM Chairman Martijn Snoep highlighted that businesses are permitted to collaborate in pursuit of sustainability goals, and the ACM is open to addressing any questions or concerns regarding such collaborations. ACM even offers a "collaboration test" to help businesses determine if joint initiatives comply with competition rules.

Harmonisation of ESG Standards

As sustainability reporting requirements for banks continue to expand, particularly under regulations like the Corporate Sustainability Reporting Directive (CSRD), banks face challenges in interpreting ESG criteria and determining appropriate data and calculation methods. This has led to inconsistencies, with each bank developing its own approach, potentially making reports difficult to compare. The collaboration aims to address these issues by promoting common ESG interpretations based on reliable, transparent sources, while ensuring that each bank remains free to choose how it reports on specific criteria.

Outlook

The ACM’s approval falls into the broader field where collaboration among competitors for sustainability objectives and competition rules are on a potential collision course. In the EU (and even more worldwide) legislation and enforcers take a patchwork of approaches, leaving companies with the risk of legal uncertainty. The Dutch case is a welcome example of practical guidance and it would be helpful if companies could rely on it at a larger jurisdictional scale.