Scaling up the inescapable opportunity in carbon trading

What the desk is arguing

The desk argues that the scaling of carbon trading markets presents a significant opportunity for institutional investors to align with global sustainability trends. Per the full note from Standard Chartered, the urgency of achieving net-zero goals is driving businesses to engage more actively in carbon trading, which is expected to grow substantially in the coming years.

Supporting this view, the World Bank estimates that the global carbon market could be valued at $22 trillion by 2030, highlighting the potential for substantial investment returns. This growth is underpinned by increasing regulatory support and corporate commitments to sustainability, making carbon trading a focal point for future market strategies.

Where it sits in our coverage

Our consensus target for carbon-related investments is set at 1.075, with a range of 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)

This view aligns closely with jpmorgan, which shares a bullish outlook, while bofa presents a more cautious stance, indicating divergence in market sentiment. The desk's call sits at the upper bound of the consensus range, reflecting a more optimistic outlook on carbon trading's potential.

How other firms see it

Firms aligned with the desk's view, such as jpmorgan, are optimistic about the growth of carbon markets, emphasizing the potential for significant returns. In contrast, bofa expresses skepticism, suggesting a more conservative approach to carbon trading investments.

Watch the EUR/USD trajectory as it may reflect broader market sentiment towards sustainability initiatives, particularly as central banks begin to incorporate climate considerations into their monetary policies.

What the calendar says

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