UK regulator the Competition and Markets Authority (CMA) is aiming to relax antitrust safeguards to make it easier for businesses to work together on climate change initiatives.

New CMA chief executive Sarah Cardell told a business forum in Edinburgh, Scotland, that the regulator will start to consult next month on a measure that will “provide more clarity on what businesses can do”.

The move comes in response to lobbying from the Glasgow Financial Alliance for Net Zero (Gfanz) – a global coalition of financial institutions that aims to accelerate decarbonisation. The group, which claims 550 members, has voiced fears that co-ordinated action on climate change could leave businesses open to action over breaching competition law.

Fair share

Cardell has indicated that the CMA will look to incorporate sustainability initiatives into existing competition law exemption. Currently there is provision for companies to enter into agreements that would otherwise be seen as anti-competitive if benefits outweigh harms, and if customers receive a fair share of the benefits.

The proposal being examined by the CMA would class climate change mitigation as a benefit to society that would be classified under the fair share exemption. This would, for example, address fears raised by insurers that banning underwriting firms from insuring carbon-heavy sectors would fall foul of competition rules.

The CMA became an independent watchdog when the UK left the EU and the move will be seen in some quarters as a ‘Brexit benefit’. Irritation with how EU competition law hampered moves to co-ordinate action for practical benefits was one of the more substantial factors to be raised in the Brexit debate. But the European Commission has also drafted guidelines that would exempt sustainability agreements under a “collective benefit” definition.