The UK’s Competition and Markets Authority (CMA) has unveiled a comprehensive guide titled the “Green Agreements Guidance,” outlining how businesses can collaborate on green initiatives without running afoul of competition laws. 

The guide was published after consultation with the business community, and seeks to provide clarity to companies operating in the same supply chain level, also known as horizontal agreements.

“The guidance goes further than before – it gives firms greater certainty about when agreements that genuinely contribute to addressing climate change will be exempt from competition law,” said Sarah Cardell, CMA chief executive.

“Our open-door policy means we can work with companies to give them tailored informal guidance on how they can work together to boost the green economy.”

The watchdog has emphasised that it does not anticipate taking enforcement action against agreements that align with the guidance. Furthermore, it elucidates how agreements between firms aimed at combating climate change will generally be viewed favourably.

The release of this guidance comes after the CMA’s Sustainability Taskforce provided advice to the UK Government in March of the previous year, as well as being based on feedback from a wide range of stakeholders and businesses following a draft published earlier this year.

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In response, the Financial Conduct Authority (FCA) said it will regard the guidance in the application of its concurrent competition powers. 

“We recognise that appropriate cooperation between industry participants can assist tackling ESG-related challenges effectively,” said the FCA in a release

“We welcome stakeholders bringing to our attention uncertainty in relation to specific potential ESG-related initiatives that may raise novel and significant concerns.”

The shift towards reaching for environmental sustainability in financial services comes on the heels of major financial institutions committing to net-zero targets by 2050, looking to become “the world’s first net zero aligned financial centre.”