Proceed with Caution: Transatlantic ESG Antitrust Guidance for Chemicals and Metals Businesses

Companies in the chemicals and metals industries are increasingly pursuing collaborative Environmental, Social, and Governance (“ESG”) initiatives, from reducing chemical emissions or phasing out hazardous substances to adopting responsible-sourcing standards. While these efforts can advance important sustainability goals, chemicals and metals companies should be aware of divergent antitrust risks in the United States and the European Union. Since President Donald Trump’s second term began, the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) have scrutinized competitor collaborations aimed at sustainability. Meanwhile, the European Union has taken a contrasting and more permissive approach with revised Horizontal Guidelines recognizing that many sustainability agreements fall entirely outside EU cartel prohibitions.

For companies in the chemicals and metals industries with transatlantic operations, this divergence creates a complex compliance landscape requiring careful navigation. This article examines the key antitrust considerations on both sides of the Atlantic and offers practical guidance for structuring ESG collaborations that minimize enforcement risk while lawfully pursuing sustainability objectives.

ESG Under the Antitrust Microscope: Key Risks for US Operations

In the US, the FTC, led by Chair Andrew N. Ferguson, has publicly theorized that any type of collaboration among competitors that increases prices, reduces consumer choice, or decreases product output “threatens the exact harm the antitrust laws are intended to prevent: higher prices, diminished quality, and less choice.” While enforcement actions against ESG initiatives by the DOJ, FTC, and state attorneys general have primarily targeted industries such as oil and gas, transportation, and consumer goods, chemicals and metals companies can be similarly situated and should avoid certain conduct that could attract antitrust scrutiny. In particular:

• Exercise caution when pursuing collaborative sustainability initiatives that may lead to industry-wide cost increases (and could lead to price increases). For example, agreements among competitors to transition to lower-temperature or more sustainable production methods to reduce CO2 emissions or establish a shared reuse system to reduce plastic waste, while promoting sustainability in the industry, could risk antitrust scrutiny if such initiatives could increase prices for consumers. To mitigate this risk, chemical companies should ensure that any collaborative sustainability efforts are structured, including documentation, to preserve independent decision-making as to customer pricing and the methods chosen to achieve sustainability end goals.
• Maintain voluntary participation in industry transparency initiatives. Industry transparency initiatives, such as the Extractive Industries Transparency Initiative and the Initiative for Responsible Mining Assurance, facilitate the adoption of environmental and social standards among industry participants. However, enforcers in the first Trump Administration scrutinized similar initiatives in the automobile industry, theorizing that they constitute an agreement to reduce output. Companies operating in the chemicals and metals industries should ensure that participation in such initiatives remains voluntary in reality.
• Avoid joint responsible sourcing agreements that may function as group boycotts. Section 1502 of the Dodd-Frank Act requires companies to trace and disclose the origin of the minerals sourced from conflict-affected areas. While companies may seek to collaborate on responsible-sourcing efforts, they should avoid entering into joint agreements that could function as an agreement to cut off financing, services, or trade with non-complying companies.¹ Such agreements (known as group boycotts) risk reducing consumer choice and industry output, about which the current FTC and DOJ have raised concern.
• Independently evaluate joint commitments. Members of Congress and state attorneys general have recently scrutinized competitors’ joint adoption of ESG initiatives at the encouragement of investors, such as the Climate Action 100+, an investor-led initiative to take action on climate change.² As chemical companies evaluate similar industry initiatives, such as phasing out PFAS or adopting emission-reduction standards, they should make sure to maintain independence in decision-making.

Sustainability Cooperation in the European Union: A More Open Road, but Watch the Guardrails

In the European Union, the approach is different. The European Commission’s revised Horizontal Guidelines³ include a dedicated chapter on “sustainability agreements” (defined as any horizontal cooperation agreement pursuing a sustainability objective). The Guidelines explicitly acknowledge that many such agreements fall entirely outside the scope of the EU cartel prohibition under Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”). Even where a sustainability agreement does restrict competition, it may be justified under Article 101(3) TFEU if it produces efficiency gains, is indispensable, passes benefits on to consumers—including, notably, “collective societal benefits” that accrue to a wider section of society—and does not eliminate competition.

In furtherance of this more lenient approach, on September 3, 2026, the European Commission issued revised antitrust guidelines on dominance (Article 102 TFEU) that allow dominant companies to justify otherwise anticompetitive conduct if their business practices are sustainable.⁴ Examples of such practices include ensuring reduced use of raw materials, producing less pollution, or increasing use of recyclable products.

At the same time, a growing body of EU regulation goes further, actively compelling or incentivizing types of industry collaboration that may attract antitrust scrutiny in the United States. For chemicals and metals companies with transatlantic operations, understanding the EU framework is essential. In particular:

• Be aware of the European Union’s more permissive framework for sustainability cooperation. The Commission identifies several categories of ESG cooperation that are unlikely to raise competition concerns at all, including agreements ensuring compliance with binding international treaties or national laws—such as prohibitions on the use of certain pollutants under the Regulation on the Registration, Evaluation, Authorization, and Restriction of Chemicals (“REACH”)—agreements concerning only internal corporate conduct, the creation of supplier databases containing general sustainability information, and industry-wide awareness campaigns.
• Monitor national competition authority practice across EU Member States. National competition authorities also take a pragmatic approach to ESG collaborations. For example, the German Federal Cartel Office has reviewed several sustainability initiatives—including the Cocoa Forum promoting living incomes for cocoa farmers and a banana sector initiative promoting living wages in Ecuador—and concluded that neither raised competitive concerns, provided participation was voluntary, no binding minimum prices were set, and no competitively sensitive information was exchanged. The German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz) similarly requires companies to consider collaboration with others as part of their remedial actions (see Section 7(2)(2)).
• Assess EU sustainability reporting and due diligence obligations that may drive data-sharing among competitors. For chemicals and metals companies with complex global supply chains involving conflict minerals or hazardous substances, these corporate sustainability reporting and supply chain due diligence directives create a legal framework that actively encourages the types of joint responsible-sourcing and remediation efforts that may raise group boycott or information-sharing concerns under US antitrust law.

Bridging the Divide: Building a Dual-Track Compliance Strategy for Transatlantic Operations

The divergence between the US and EU approaches demands that chemicals and metals companies operating on both sides of the Atlantic structure their ESG initiatives to satisfy both regimes simultaneously. These core principles of compliant collaboration are sound under both legal systems:

(i) Participation in any cooperative initiative must be voluntary and non-exclusive;
(ii) Each company must retain full independence over its commercial decisions, including pricing, supplier selection, and output;
(iii) Companies must strictly avoid exchanging competitively sensitive information, including pricing, costs, margins, volumes, and future commercial strategies;
(iv) Meetings and discussions among competitors should be governed by pre-circulated agendas focused exclusively on the sustainability objective, with contemporaneous documentation; and
(v) Supplier databases should contain only general sustainability information and should not reveal which members purchase from which suppliers.

Transatlantic companies with significant US market exposure should exercise heightened caution for any joint discussions or remediation efforts that could affect prices or output in US markets, and should consider seeking antitrust counsel review on a case-by-case basis before engaging in cross-border sustainability cooperation.

¹ See, e.g., State Attorneys General Letter to Science Based Targets Initiative, August 8, 2025.

² See, e.g., House Republicans Letter to Climate Action 100+ and CalPERS, December 6, 2022; State Attorneys General Letter to U.S. Asset Managers, March 30, 2023.

³ EU Commission, Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements, 1 June 2023.

⁴ EU Commission, Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings, 3 September 2026.