Credit Agricole SA, the second-largest bank in France, will no longer participate in fossil fuel financing. Specifically, a spokesperson for this bank stated that it would “no longer participate in bond issuances for oil and gas producers that don't have a green focus.” This action echoes a similar pronouncement by BNP Paribas about three weeks ago, when that bank also announced that it would no longer participate in conventional bonds issued by the fossil fuel industry. 

With two of the largest banks in the EU (both based in France) ceasing financing for the fossil fuel industry, this could now be considered a trend among European banks. Such a trend likely reflects the far more stringent environmental regulations imposed by the European Union.

Perhaps most significantly, this development further demonstrates the increasing divergence between the European Union and the United States with respect to climate regulation. Although the immediate impact of this particular decision will be relatively modest--there are a number of financial institutions prepared to provide capital to the fossil fuel industry--it remains a possibility that this trend could accelerate, complicating the ability of the fossil fuel industry to access capital and continue its operations. (Indeed, such a result may have been desired by those crafting the relevant regulations.) It will be important to observe how widespread this trend of refusing to finance the fossil fuel industry becomes, and whether there are any countervailing developments.