The CMA issues informal guidance on environmental cooperation in the UK construction industry under ‘open door’ policy

On 28 March 2025, the Competition and Markets Authority (CMA) published its latest piece of informal guidance under its ‘open door’ policy on sustainability agreements (BMF Guidance). Addressed to the Builders Merchants Federation (BMF), the guidance relates to the BMF’s proposal to recommend that the industry “uses a single provider of supply chain assurance services” under a “single preferred platform” model.

The BMF Guidance reflects the first time that (i) an undertaking appears to have submitted a revised proposal following open door engagement with the CMA and (ii) the CMA has responded to a request from a trade association, rather than a non-profit. We covered the CMA’s earlier guidance (provided to the WWF and Fairtrade Foundation, respectively) in previous posts on our Sustainable Matters blog.

The BMF’s proposal

The BMF asked the CMA for informal guidance on a proposal to facilitate and accelerate uptake of construction industry supply chain assessments. As the CMA acknowledged, supply chain assurance is becoming increasingly important as a means for businesses to track—and then improve—the alignment of their supply chains with environmental (and other) objectives.

The core proposal involved the BMF working with Verisio, a supply chain assurance provider, to develop:

• a standard ESG questionnaire to gather information from suppliers and enable assessment of their supply chain risk; and 
• a platform solution for processing suppliers’ responses to the questionnaire, including a dashboard for merchants to assess their supply chain risk exposure and view individual suppliers’ risk ratings.

Following feedback from the CMA, the BMF incorporated several “Additional Steps” into its proposal. These include: (i) running a competitive process within 24 months of launching the platform solution, to refresh its recommended supply chain assurance provider; (ii) ensuring data portability for suppliers and merchants across platforms; and (iii) ensuring that the questionnaire remains open source.

The CMA’s assessment

Noting that the proposal did not have an anti-competitive objective, the CMA assessed its likely effect on competition—focusing on whether use of a single preferred platform risked foreclosing competitors providing similar services. The CMA concluded that the risk of significant competitive harms was likely to be low, such that it does not expect to take enforcement action against the proposal.[1]

Key factors relevant to the CMA’s assessment included:

• Transparent and participative: the questionnaire would be developed in consultation with both BMF members and non-members, and potentially with other supply chain assurance providers. 
• Accessible on reasonable and non-discriminatory terms: the questionnaire (and, potentially, the risk rating methodology) would be available to the wider industry on an open source basis.
• Independent purchasing decisions: merchants would remain free to decide unilaterally whether to trade with a given supplier.
• Mitigated risk of competitor foreclosure: the Additional Steps adopted by the BMF adequately addressed the CMA’s concern that selecting a single preferred platform could confer an “unassailable competitive advantage” on that platform, foreclosing competitors.
• Mitigated risk of CSI exchange: neither BMF employees nor merchants would be able to see which merchants are linked to which suppliers (other than their own data). Pricing and purchasing volume data would not be shared.

The CMA also concluded that the benefits of the proposed agreement could outweigh any harm to competition, acknowledging:

• Benefits: the proposal would lead to both cost-reduction benefits and environmental benefits (including climate change benefits in the form of emissions reductions), which the BMF had quantified in its submission.
• Fair share: final consumers are likely to benefit through greater availability of assured goods and services, at lower cost for the assurance. The CMA noted that whilst the proposal as a whole was a “mixed agreement” (generating both climate change, and other environmental, benefits), it was nevertheless possible to take into account the climate change benefits accruing to all UK customers in relation to the climate change aspects of the agreement.
• Indispensability: the single preferred platform model is reasonably necessary to achieve the benefits set out, and would be more efficient than alternatives.
• No elimination of competition: the Additional Steps mitigated the risk of a substantial elimination of competition.

The CMA’s door continues to be open, at least for now

The CMA’s engagement with the BMF—which resulted in the inclusion of the Additional Steps— clearly signals that the “light-touch review” under the open door policy is not simply a rubber-stamping exercise. The detailed BMF Guidance provides useful indicators as to the factors the CMA will consider when assessing a proposal. Undertakings should be prepared for the CMA to raise any substantive competition concerns it identifies, and potentially require amendments to proposals. The revisions made by the BMF should, however, also reassure undertakings that approaching the CMA for informal guidance is not a ‘one-shot’ process, and that the open door policy reflects an opportunity for two-way dialogue with the CMA.

The BMF Guidance demonstrates that the CMA remains open to engaging with undertakings on the topic of sustainability-related collaborations—despite notably fewer references to sustainability in the CMA’s just-published Annual Plan for 2025/2026 and a more muted approach to publicising its work in this area. Given the UK Government’s recent growth-focused steer to the CMA and ESG headwinds across the Atlantic, it remains to be seen how sustainability objectives will fare in the near- and medium-term regulatory environment in the UK.

[1]The BMF’s proposal bears some similarity to a proposal by the Dutch Banking Association (NVB) to create a digital platform for banks that would enable more consistent interpretation and application of ESG reporting criteria. This proposal was reviewed by the Dutch Competition Authority (ACM) under its informal guidance scheme in late 2024, with the ACM concluding that the agreement did not appreciably restrict competition. This differs somewhat from the CMA’s more critical approach under the BMF Guidance, driven by concerns arising from the use of a single preferred platform operated by a third-party player (rather than the merchants themselves) in the market segment for supply chain assurance services. Under the NVB’s proposals, by contrast, it appeared that the banks themselves would be closely involved in developing and operating the platform.