Does antitrust law stand in the way of Net Zero Alliances?

At the start of 2025, JP Morgan announced that it was exiting the Net Zero Banking Alliance (NZBA), a UN- convened group of leading global banks - launched in April 2021 - to align their lending, investment and capital markets activities with net zero greenhouse gas emissions by 2050. JP Morgan is the latest bank to leave the NZBA, which has seen other major US banks, such as Goldman Sachs, Wells Fargo, Citi, Bank of America and Morgan Stanley, all leave in the space of a month. Like most of the other banks, JP Morgan did not state any clear reasons for its decision to exit. But the exit follows the launch of investigations by numerous US State Attorneys General (AGs) - alleging that the Alliance’s net zero efforts violate antitrust laws - and a broader ESG backlash by conservative politicians in the US.

The NZBA formed part of the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed umbrella group of net zero-focused financial sector coalitions, including the Net Zero Asset Managers Initiative (NZAM), the Net Zero Insurance Alliance (NZIA) and the Net Zero Financial Service Providers Alliance (NZFSPA). Many of these Alliances have suffered a similar fate in recent years. For example, several global insurers, including Lloyds of London, Axa and Allianz left the NZIA in May 2023. Founding member Munich Re had already left the Alliance in March that year citing “material antitrust risks” of the “collective approach” as the reason for leaving. Similar exits from the NZAM resulted in this alliance announcing, on 13 January 2025, it would suspend all activities  pending a review in light of “recent developments in the U.S. and different regulatory and client expectations in investors’ respective jurisdictions”. Many of the firms who have exited the Alliances have, however, announced, or continued, their own individual climate commitments.

This post offers some insights into the intersection of antitrust enforcement and climate conscious collaborations, such as the Net Zero Alliances. It concludes that businesses involved in similar international cooperation should be aware of the potential for inconsistent or conflicting approaches by antitrust agencies and should ensure that any collaborations meet the conditions for exemptions in all relevant jurisdictions.

When did membership of Net Zero Alliances become controversial?

We first covered the topic of Net Zero Alliances and antitrust law compliance in a blog post in August 2022 (see here). The post focused on the NZIA’s decision not to require its members to stop underwriting new thermal coal projects considering legal advice it had received that such a move could be anti-competitive. The NZIA said that while its members were committed to taking the steps necessary to reach their net zero goals, it did not have the legal power to prescribe how they did so. Insurers should instead engage with energy companies and encourage them to decarbonise. This decision was taken even though, at that time, updated criteria issued by its accrediting body, the UN’s Race to Zero, required corporations and investors to phase out all unabated fossil fuels and restrict the development of new fossil fuel assets to retain affiliation. 

From that point onwards, the uncertainty around compliance with antitrust rules was used by opponents of these initiatives to challenge their legality, especially in the US. One of the boldest challenges to date has been the complaint of a coalition of 11 AGs, filed in November 2024, against investment firms Vanguard, BlackRock and State Street - who were members of the NZAM. The complaint alleges these firms colluded to suppress coal production and raise prices through ESG initiatives.

How are antitrust agencies responding?

So what are antitrust agencies saying about sustainability-related collaborations amongst competitors? In the US, the issue has so far received relatively little attention from the Federal Trade Commission (FTC) and Department of Justice (DOJ). In response to questions about the antitrust implications of collective net zero commitments during a hearing of the US Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, in September 2022, both FTC Chair Lina Khan and DOJ Assistant Attorney General Jonathan Kanter ‘simply’ said that such commitments do not benefit from any special treatment or exemptions under the US antitrust rules, a statement Khan repeated at the 2023 ABA antitrust meeting. The US agencies’ appetite for intervention against collaborations amongst competitors could heighten, however, considering the rising ESG backlash in the US, which, given the political climate, is unlikely to abate any time soon.

By contrast, in Europe, many antitrust agencies have said that antitrust rules should not stand in the way of agreements that contribute towards a more sustainable society. Some agencies have also provided both general and fact-specific guidance to allow such agreements to take place in a compliant way. For example, the European Commission (EC) (re-)introduced a dedicated chapter on sustainability agreements in its revised 2023 Horizontal Guidelines bringing greater certainty for businesses (see here). The guidance makes it clear, for example, that where such agreements lead to price rises, consumers harmed by such rises must be fully compensated by receiving a ‘fair share’ of the resulting benefits. When assessing whether consumers receive a ‘fair share’ of benefits, the relevant consumers are generally those of the products / services to which the agreement relates (i.e. consumers within the relevant market).

The 2023 EC guidance followed – and aimed to introduce some EU-wide consistency to – general guidance by several national antitrust agencies in the EU, including the Dutch (who had taken a more liberal approach) and Austrian agencies. 

In the UK, the Competition and Markets Authority (CMA) released its ‘Green Agreements Guidance’ in October 2023 reflecting the CMA’s increasing focus on environmental issues (see our briefing: here). Interestingly, the CMA Guidance allows for a more permissive approach to ‘climate change agreements’ and gives the following example of such an agreement, “an agreement between financial service providers not to provide support such as financing or insurance to fossil fuel projects.” And, when assessing consumer benefits of a climate change agreement, the CMA Guidance permits the totality of the benefits accruing to all UK consumers arising from the agreement to be considered, rather than only those accruing to ‘in-market’ consumers (or those in a related market).

Some agencies have also issued useful, informal guidance - under an ‘open door’ policy - in relation to specific collaborations, such as: 

• the Dutch agency in relation to plans by the Royal Dutch association for coffee and tea companies to collaborate with coffee producers to recycle coffee capsules; 
• the French agency to two groups representing companies in the animal nutrition sector regarding guidance for a standardised methodology for calculating a product’s environmental footprint (see our blog post: here); and
• the CMA in relation to a joint commitment by UK supermarkets to help reduce greenhouse gas emissions in their supply chains by increasing the number of suppliers setting net zero, science-based targets (see our blog posts: here and here). 

What should businesses do?

The controversy around the global Net Zero Alliances shows businesses that they should not assume their sustainability initiatives with rivals will benefit from a blanket exemption under antitrust rules, even when endorsed by the UN. They should therefore seek legal advice before undertaking such sustainability initiatives to assess whether the proposed initiatives raise any antitrust risks, and if so, what changes can be made to ensure compliance with the relevant antitrust rules. Where appropriate, they should also consider discussing their proposals with those antitrust agencies that are willing to provide specific, informal guidance. 

Businesses involved in international cooperation should also be aware of the inconsistent or conflicting approaches by antitrust agencies and should ensure that any collaborations meet the conditions for exemptions in all relevant jurisdictions or, if possible, carve out ‘problematic’ jurisdictions.