By Brian Wood, Senior Product Manager
Energy and commodity traders feel stretched thin across multiple risk management activities, but where do they most want to redirect their efforts?
To explore this question, we commissioned a research study of energy and commodity traders in North America and Europe, whose firms collectively manage tradable assets of $1.4 trillion.
The results show that traders want significantly more focus on investment due diligence and stress testing, while executives and front-line staff disagree on other key areas.
Investment due diligence and stress testing top the priority list
The survey results align with current market pressures. Investment due diligence and stress testing top the list of areas where traders want more focus, with over half (51%) saying their firms should devote more resources to due diligence and 44% calling for more stress testing.
Nearly half believe their firm spends about the right amount of time on cross-asset risk aggregation and data integration, while 29% believe they spend too much time on manual processes and legacy tools.
Portfolio analytics and risk management functions | Percentage of traders spending too much time and resources on it | Percentage of traders spending about right amount of time and resources on it | Percentage of traders who think they should spend more time and resources on it |
Investment due diligence and valuation | 15% | 34% | 51% |
Scenario analysis and stress testing | 20% | 36% | 44% |
Managing platforms | 18% | 41% | 41% |
Data integration and management | 16% | 46% | 38% |
Cross-asset risk aggregation | 15% | 48% | 37% |
Regulation and compliance | 18% | 45% | 37% |
Liquidity and cashflow planning | 21% | 43% | 36% |
Manual processes and legacy tools | 29% | 39% | 32% |
Executives and practitioners disagree on priorities
C-level executives and their quant/trader/analyst colleagues had significant differences of opinion on where to focus efforts. While both groups agreed on due diligence as most important, executives were more than twice as likely to say they should spend more time on cross-asset risk aggregation and data integration.
The quant/trader/analyst group was twice as likely to say they spend too much time on manual processes and legacy tools, as well as liquidity and cash flow planning. This frustration may reflect the reality that firms surveyed manage 53% of their trading, portfolio optimization, and risk management work through spreadsheets.
State of technology
While managing models, data integration, and cross-asset risk aggregation are frequent discussion topics in the industry, capabilities vary significantly across firms. Two-thirds of respondents felt that their firm’s governance and version control of models and analytics were good or excellent. And nearly half (48%) said it was easy for their firm to aggregate risks, exposures, hedges and yields across their portfolios.
These findings highlight a clear disconnect between current resource allocation and trader priorities. With over half of risk management work still handled through spreadsheets, and strong demand for more sophisticated due diligence and stress testing, firms have a clear roadmap for where to invest their technology and process improvement efforts. The question isn’t whether change is needed — it’s how quickly firms can realign their resources to match their teams’ priorities.
About This Research
Beacon Platform, a Clearwater Analytics company, Inc. commissioned independent research company Pure Profile to interview 100 senior energy and commodity traders at specialist trading firms, hedge funds, fund managers and investment banks responsible for total capital allocated or assets under management for trading of $1.4 trillion. Respondents were based in the US, UK, Europe and Canada. The research was conducted during March 2025 using an online methodology.
