Service Type: Physical Commodity Risk Management
Project: Commodity Risk Policy Redesign
Our client wanted to hedge its natural gas and diesel fuel purchases. The natural gas was input into their manufacturing process and the diesel fuel used in its product distribution network. The parent company had a well-developed risk management policy in place. However, the policy did not cover the new commodities the subsidiary wanted to hedge. Before executing the hedges, the risk management policy needed to be updated and approved by the Board of Directors.
Approach & Results:
Approach: We met with management and reviewed the current risk management policy. We then drafted an update to the document and met with the Risk Management Committee to ultimately get the new policy approved.
Results: Our experience with hedging best practices allowed us to efficiently write a new policy and quickly get it approved by the Risk Management Committee, saving the client significant time and money.