The art of creating a corporate energy hedging programme
Risk managers and consultants say hedging corporate exposures to energy prices is more art than science. As a result, the development of a truly successful hedging programme requires several important questions to be carefully considered. Jay Maroo reports
I hedge therefore I am. Although this isn’t quite what French philosopher René Descartes said over 350 years ago, the statement occasionally rings true for corporates, for which hedging can sometimes mean the difference between survival and collapse. Consequently, it’s as important as ever for firms to think scrupulously about their exposure to energy price risks.
Putting together a hedging programme should involve careful thought, however. Successful hedging is often described as an art – and
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