Credit Agricole CIB chooses carbon trading over gold, sources say

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🗞️ Driving the news: Credit Agricole CIB, the corporate banking arm of France's second-largest bank, is set to exit precious metals trading in favor of carbon markets by 2025, according to sources
• The shift aligns with the bank’s strategy to focus on the EU Emissions Trading System (ETS), the world’s most valuable carbon market
• This decision follows the bank's reduced presence in the gold market since the COVID-19 pandemic disrupted gold trading in 2020

🔭 The context: Credit Agricole’s precious metals business, once generating tens of millions annually, struggled after volatility in gold prices during the pandemic led to losses
• The global carbon market reached a record value of €881 billion in 2023, with the EU's ETS accounting for 87% of this total
• The bank sees carbon trading as a better fit for its green ambitions and future revenue streams

🌍 Why it matters for the planet: This move underscores the growing importance of carbon markets as financial tools to support global efforts in reducing emissions, reflecting a shift from traditional commodities to climate-related investments

⏭️ What's next: Credit Agricole plans to start carbon trading in 2025, transitioning its balance sheet to this growing market
• The bank aims to capitalize on increasing demand for carbon permits as stricter climate regulations take effect across Europe

💬 One quote: "The bank is instead looking to focus on carbon markets with a view to commencing trading next year," a source familiar with the matter said

📈 One stat: In 2023, the global carbon market reached €881 billion, with the EU ETS representing €770 billion of that total

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