Treasury and commodities

Stay ahead of risk and volatility to protect financial performance

Treasury and commodity risk management & trading communities are managing a wider range of risks and complexities than ever before.

Commodity trading, commodity risk management, cash forecasting / working capital management, foreign exchange (FX) volatility, market complexity, counterparty risk and changing regulations impact businesses in different ways, placing CFOs under increased pressure to stay on top of current and emerging issues. Successful businesses are getting ahead by transforming their treasury organizations and investing in value adding treasury, cash and payments technology to improve efficiency and control, reduce costs and better manage risk.

How we can help

Treasury and cash transformation

Flexible treasury advisory resources to help focus on strategic treasury transformation initiatives and enhance operational capabilities:

  • Evaluate treasury performance relative to peers;
  • Determine vision and target treasury operating model;
  • Enhance governance structure and organisational design; and
  • Execute treasury transformation.

Commodity risk management

We help clients across a range of industries from energy, oil & gas, LNG, petchems, metals, carbon and agricultural products among others to improve their management of commodity related risks:

  • Commodity risk management & trading strategy - Assistance with determining and developing the commodity risk appetite and risk management strategy (hedging strategy, trading strategy, and management of market, counterparty, contract, cash flow and operational risks), defining and implementing trading limits, target operating model and governance model
  • Trading analytics, surveillance and reporting - Design, select, implement and review trade surveillance models, develop analytics to help analyse trading performance and stay ahead of emerging energy and commodity trading issues.
  • Governance, risk, controls and internal audit - review commodity risk management and trading governance, risk & controls frameworks compared to good practice; internal audit services; quality assurance; fraud risk assessment and investigation services.

Commodity risk management - net zero transformation

We help clients to:

  • Develop their net zero commodity risk management and trading approach (including hedging strategy, trading strategy, measurement of emissions and management of market, counterparty, contract, cash flow, regulatory and operational risks)
  • Design their commodity risk management operating model, governance model and associated policies, procedures, reporting, controls and technology
  • Develop the valuation approach to carbon instruments and transactions
  • Provide advice on the interpretation and application of accounting standards (IFRS, US GAAP etc...) for carbon transactions in both primary and secondary markets
  • Provide advice on regulatory reporting and regulatory developments.

Treasury and commodity risk, cash payments and banking technology

Increase treasury process automation to enhance insight, efficiency, control and resource utilisation:

  • Develop treasury technology vision and strategy
  • Technology functionality covering; Treasury management systems (TMS), payments, bank interfaces, finance systems and cash management / forecasting
  • Assistance with the treasury system solution design
  • Develop a TMS business case and system(s) roadmap
  • Define and review functional requirements and preferred treasury systems; and
  • Digital transformation and cloud adoption
  • Programme and change management delivery
  • Treasury system testing and Quality Assurance
  • Implement and integrate systems across treasury and commodity risk activities and geographies.

Currency and other financial risk management

Reduce volatility of margins, earnings and cash flows:

  • Analyse key risks, particularly foreign currency and interest rate;
  • Determine strategic, operational and financial management and hedging solutions; and
  • Design improved processes, controls, and reporting.

Treasury and Commodity accounting and regulation

  • Manage treasury accounting and regulatory change, achieve compliance and mitigate risk in relation to your treasury or commodity risk exposures and transactions.
  • Assistance with the strategic and operational response to UK, European and international regulatory requirements and reporting (GDPR, 15% global tax, Market Abuse Regulation etc...) and development of compliance capabilities and associated treasury controls framework.
  • Assistance to interpret and apply treasury accounting standards (IFRS, US GAAP etc...) and provide advice on complex treasury and commodity transactions, including associated disclosure requirements.

Cash management and cash forecasting

Improve visibility, control, cost and predictability of cash under treasury management:

  • Evaluate and select the right banking partners and services;
  • Spread counterparty exposure and explore alternatives to banks for investment / borrowing facilities;
  • Develop a robust and dynamic cash forecasting regime with use of AI; and
  • Design and implement in-house banking, payment factory, pooling, and netting structures.

Treasury and Commodity controls

Enhanced oversight and control over key treasury or commodity risk activities:

  • Review treasury policies and procedures to close gaps, including cybersecurity, fraud risk, internal controls, and board expectations; and
  • Provide internal audit support across specific areas or end to end treasury and commodities process and control reviews.

Supporting deals

Consider treasury and commodity issues in determining deal value then achieve a well-controlled and smooth transition to post-deal operations:

  • Support financial and operational due diligence, day-one planning, and post-day-one integration or separation of treasury and commodity activities; and
  • Manage treasury and commodity risk requirements post day-one.

Work with us

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“At the heart of our business are diverse and talented teams to help achieve our goal of being pioneers in a world of changing risk. Join us and you’ll be part of an inclusive culture that enables risk professionals to thrive by nurturing innovation and curiosity. Our investments in technology and digital give our people the tools and skills they need to help our clients solve the problems of tomorrow, not just today.”

Rebecca Cooke,People Leader for Risk

Contact us

Rob Waddington

Rob Waddington

Partner, Head UK Treasury and Commodities, PwC United Kingdom

Tel: +44 (0)7720 430125

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