According to a Reuters report, Credit Agricole, France’s second-largest bank with a prominent international footprint, is shifting its focus towards trading in compliance carbon markets while scaling back its activities in precious metals.
Although no direct connection between these two sectors has been established, sources suggest that the bank aims to align its operations more closely with greener initiatives.
This strategic move could signal a rise in liquidity for the European Emissions Trading System (EU ETS), especially as Brussels intensifies its efforts to decarbonize the continent’s industrial sector.
Both the EU ETS and other emissions trading platforms are anticipated to grow further. The EU ETS reached a total value of $979 billion in 2023, representing nearly 90% of that figure.
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Credit Agricole intends to commence its trading activities in 2025, as the demand for emissions allowances is projected to surpass supply in the upcoming years.
Sources indicated that the primary factor behind this shift was the poor performance of the bank’s gold trading unit over the past few years, particularly during the COVID-19 pandemic.
Logistical disruptions and the shutdown of essential refineries severely affected gold production and transport, leading to challenges in deliveries and supply in early 2020 as various global measures were implemented.
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As a result, significant price discrepancies emerged between gold and silver in two major trading centres—New York and London—causing many market players to face losses. While numerous participants chose to maintain their positions and ride out the volatility, Credit Agricole cut its losses.
This renewed focus on carbon markets is not the bank’s first step toward more ESG-focused investing. In December 2023, it also decided to cease investing in new oil and gas projects.