Bringing Clarity to Volatility: Benchmarking Interest Rate Risk for a Global Energy Logistics Business

Global market turbulence and the shifting interest rate environment have intensified uncertainty for corporate treasuries in recent years. This has forced greater attention on financial risk – particularly for businesses operating across multiple continents and managing exposure to volatile financing costs. For our global energy logistics client, these external pressures arrived at the same time as major internal changes, presenting an ideal opportunity to reassess existing treasury practices. 

“There were a lot of new faces and new knowledge with the changes at the company – it seemed a logical moment to also review all the policies and procedures in place,” says a company treasurer. “This triggered a discussion on risk management – what policies we had in place and whether they were still fit for purpose.” 

Time for pragmatism and validation 

While hedging policies existed, they were informal and inconsistently applied. As market volatility increased, it became clear that the company needed a more formal, structured framework to provide the clarity now expected – both internally and by regulators. 

“We decided it was time to formalize our policies,” the company treasurer adds. “There was more focus internally on how market volatility could impact our results. We were regularly being asked what was driving revaluations in our financials and how we could smooth this by structuring differently or applying hedge accounting.” 

The treasury team embarked on a large-scale project to refresh and refine policies and document their future risk management approach. However, while internal discussions clarified objectives and processes, to have complete confidence in their approach required more than just internal agreement. They also needed to be sure that their policies were aligned with market best practices and that their hedging strategies would withstand the scrutiny of management, auditors and regulators.  

“We realized we needed validation,” the client explains. “We wanted to know whether what we were doing was correct, whether we were missing something and how our approach compared to market practice. Were we under-hedged or over-hedged compared to peers?” 

Making risk tangible 

Zanders was a natural choice to conduct this benchmarking exercise and provide the independent, expert view the company needed. The treasury team trusted them from an earlier transfer pricing project and valued their approach – in particular the blend of technical depth and practical execution. 

We like Zanders’ pragmatic approach.

Company Treasurer

“Once you start talking about hedging policies, many consultants immediately ask for SAP dumps going back 15 years and expect you to fill an entire data room. I was afraid of that. We weren’t at the start of a project – we were almost finished – we needed a partner who could validate our work without creating a massive administrative burden. Zanders understood this.” 

Instead of a heavy data-driven exercise, Zanders designed a focused, efficient process structured around two interactive workshops: an exploratory session to discuss and map existing processes and a second session to validate conclusions. 

It really helped to get validation from an external consultant, you want to know whether what you’ve built actually makes sense, whether you’re missing something, and how competitors approach the same issues.

Company Treasurer

Within just a few months, Zanders delivered a clear validation report accompanied by a set of practical recommendations. One of the most valuable was linking hedge decisions more closely to the company’s financial sensitivities – a shift that has made it far easier to communicate risk to senior management.  

“These are really pragmatic solutions that have improved our policies, and our top management can see the results immediately,” says the company treasurer. “When we explain why we hedge, or what happens if we don’t, the impact becomes tangible. It’s no longer abstract. We can show: ‘If you do this, here’s the risk. If you do that, here’s the outcome.’ It makes presenting the figures much easier, and it helps management truly understand the numbers rather than just percentages.” 

Reshaping perspectives on risk 

By combining structured validation with practical recommendations, the project not only strengthened the company’s interest rate risk framework but also gave the treasury team renewed confidence in their approach. 

“Overall, the outcome of the project wasn’t to radically change our approach – it confirmed we were on the right track,” says the company treasurer. “But it also led to changes that have created more awareness and understanding across the company about the importance of risk management.”  

Perhaps most importantly, the exercise reframed the company’s view of risk in the core. “We used to think of risk management purely as minimizing risk,” the company treasurer says. “Now we see it as balancing risk, cost and impact – making informed decisions rather than automatic ones on multiple levels.” 

Looking to elevate your interest rate risk strategy? 

From volatility in global markets to rising expectations from boards, auditors and regulators, interest rate risk management has never been more critical. Zanders brings the expertise, structure and independent perspective needed to strengthen your framework and turn risk insights into strategic clarity. 

Get in touch to discover how we can help you build a clearer, more resilient approach to interest rate risk – ensuring transparency, control and confidence across your financial decision-making.