Credit Agricole, France's second-largest bank with a significant global footprint, is making a strategic shift in its trading operations. The bank will gradually phase out its precious metals trading, particularly gold, to prioritise activities in compliance carbon markets.
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This decision aligns with Credit Agricole’s broader commitment to environmentally sustainable practices. By focusing on carbon markets, the bank is positioning itself to support and benefit from the growing momentum behind global decarbonisation efforts. The move is seen as a vote of confidence in the European Emissions Trading System (EU ETS), which has become a cornerstone of the European Union’s strategy to reduce industrial carbon emissions.
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The EU ETS and other similar systems worldwide are anticipated to grow significantly, having reached a combined value of $979 billion in 2023, with the EU ETS representing nearly 90% of this figure. Credit Agricole plans to commence carbon trading by 2025, a strategic entry as demand for emissions allowances is expected to surpass supply in the near future.
The decision to exit precious metals trading, particularly gold, stems from several years of poor performance in this sector, exacerbated by the COVID-19 pandemic. Disruptions in logistics and refinery operations during the pandemic led to significant supply chain challenges, which in turn caused price discrepancies between key trading hubs in New York and London. As many in the market held onto their positions, Credit Agricole chose to cut its losses and pivot towards more sustainable investments.
This shift is part of a broader trend at Credit Agricole towards ESG-oriented strategies, following their December 2023 decision to cease new investments in oil and gas projects.
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