UK competition regulator the Competition and Markets Authority (CMA) has said investor agreements on environmental voting and agreements to target sectors collaboratively will be unlikely to infringe competition law in its final guidance on environmental sustainability agreements published on Thursday.

The document is intended to provide guidance on the application of competition law to sustainability agreements, as well as areas where “a more permissive approach to assessing the benefits of the agreements” has been adopted.

The investor-specific section covers both voting agreements and agreements by investors to target businesses that compete with each other in the market.

In both cases, the CMA says the agreements can be within the law.

For voting, an agreement between shareholders of a single business to vote in support of corporate climate or environmental policies, against those which do not, or to “lobby jointly” for corporate changes “will be unlikely to infringe competition law”.

Similarly, the guidance says that, where there is an agreement covering shareholder conduct “in relation to several businesses that are competitors in a market”, it is unlikely to have a negative impact on competition if the changes or policies that investors advocate for support the adoption of other environmental agreements set out in the guidance such as the withdrawal of non-sustainable products.

However, some joint shareholder activity should still be assessed against other sections, including those sections covering impacts and environmental agreements that have competition restriction as their object, the CMA warns.

The final guidance is 12 pages longer than the initial draft, and the section covering investors is new entirely. Both ShareAction and the Investment Association had called for this to be included in their consultation responses.

A spokesperson for the Investment Assocation told Responsible Investor it welcomed the clarity provided in the final guidance, making it explicit that the regime applies to investment managers and trade bodies.

“The new guidance will help shareholders when engaging with companies on environmental sustainability objectives. It is also important that the FCA has welcomed the guidance and committed to considering the CMA’s approach when exercising its own competition powers,” they said.

Concerns around the application of competition law to climate agreements in the financial services industry have grown over the past year.

In the US, a group of Republican state attorneys general have targeted a number of initiatives including Climate Action 100+ and the Net Zero Insurance Alliance, alleging that there may be breaches of antitrust regulation. Both groups say they operate within the law.

The Net Zero Insurance Alliance subsequently saw the departure of the majority of its members, with Munich Re CEO warning that “the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited that it is more effective to pursue our climate ambition to reduce global warming individually”.

In Germany, investors looking to establish a collaborative engagement platform are hoping for more clarification from regulator BaFin about its approach to acting in concert rules after it issued a response to a number of hypothetical engagement scenarios earlier this year.