Treasury and commodities

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

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

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

• Commodity risk management & trading strategy - Assistance with determining 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, build 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 practise; internal audit services; quality assurance; fraud risk assessment and investigation services.

Carbon markets are developing at a rapid pace - increasing in scale, complexity and accessibility. Growing investor and corporate focus on ESG and net zero is driving companies to seek to develop strategies to manage carbon exposure - addressing both legal and voluntary carbon offset requirements.   

Commodity risk management and trading has an important role to play in net zero: 

• Through providing carbon neutral products to their trading and industrial customers; 
• Through increasing market liquidity in carbon markets; and  
• Through acting as a broker to help clients manage their mitigation of scope 1, 2 and 3 emissions. 

We help commodity risk managers and traders across all sectors 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

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

• Develop technology vision and strategy
• Assistance with the solution design
• Develop a business case and solution roadmap
• Define and review functional requirements and preferred systems; and
• Digital transformation and cloud adoption
• Programme and change management delivery
• Testing and Quality Assurance
• Implement and integrate systems across treasury and commodity risk activities and geographies.

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.

• Manage 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 (EMIR, REMIT, MIFID II, Market Abuse Regulation etc...) and development of compliance capabilities and associated controls framework.
• Assistance to interpret and apply accounting standards (IFRS, US GAAP etc...) and provide advice on complex treasury and commodity transactions, including associated disclosure requirements.
  

Improve visibility, control, cost and predictability of cash:

• Evaluate and select the right banking partners and services;
• Develop a robust and dynamic cash forecasting regime; and
• Design and implement in-house banking, payment factory, pooling, and netting structures.

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

• Review policies and procedures to close gaps, including cybersecurity, fraud risk, internal controls, and board expectations; and
• Provide internal audit support.

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 activities; and
• Manage treasury and commodity risk requirements post day-one.