2022 was another year of relentless and extreme volatility, driving outstanding trading performances for some markets participants, yet also precipitating an existential crisis for others. As HC Group’s co-founder Paul Chapman writes in the editorial of our Annual Review, 2022 will probably be remembered as a watershed year. The ripple effects of the global pandemic, the Russia-Ukraine war, inflation and higher interest rates will keep unfolding in 2023, promising a bumpy road ahead. And more than ever, the energy, metals, agriculture and key resource industries are at the center of the twin challenges facing the global economy and population: decarbonization and deglobalization.
Undeniably, the Russia-Ukraine war has stressed the necessity to accelerate the energy transition and reduce the dependence on fossil fuels. But in fact, securing energy supplies has taken precedence, leading in part to a resurgence in coal demand. For their part, hydrocarbons continued to attract healthy capital flows from private investors thanks to the healthy returns they yield compared to some green technologies, as debated in a recent HC podcast with Jeff Currie, Goldman Sachs’ Chief Economist for Commodities. The refining segment can be seen as a case in point. Talent demand has picked up significantly since 2022, as more investors aimed to capture value from strong margins.
With more volatility predicted in 2023, companies will continue to look for trading opportunities across gas, LNG, power, as well as carbon and environmental products. To hit net-zero targets, more companies have been building new teams and hiring originators to source high-quality offsets on voluntary markets. On compliance markets, activity has picked up in Europe with higher intraday volatility encouraging several funds to develop EUA options trading capabilities. HC Group’s Latin America practice, has seen that the growing interest in green hydrogen has created a breeding ground for talent demand in the renewable energy segment, especially in Brazil and Chile.
The drive from participants to either bolster their sustainability strategies or hire leaders to shape a new one is tangible. One critical challenge lies in finding senior talent in this space, or at least, talent with fully-fledged skills across the environmental, social and governance space, as argued in a previous HC Insight.
In the metals sector, sustainability and the energy transition represent a major underlying driver for growth in the green metals market, as countries strive to achieve their Paris agreement targets. Therefore, HC Group anticipates sustained demand for leadership roles in sales and marketing, business development and risk management.
Continued growth in the plant protein sector is expected to underpin renewed demand for specific skillsets in 2023. Meanwhile, the Russia-Ukraine war has underscored the vulnerability of the global supply chain for key grains and fertilizers. The imperative to constantly adjust and optimize agri trade flows promises a steady demand for commercial and origination talent in the months to come.
Participants will keep sophisticating their corporate functions and capabilities to operate as efficiently as possible. For example, legal and compliance functions have never been more strategic for businesses to face risks of new regulations, as more governments are stepping in to manage soaring energy and food prices, as discussed in a recent podcast with Doomberg.
With regards to tech talent, the highest recruitment needs in 2023 will likely remain focused on business-facing development and data, along with cyber talent as cyber-security risks have risen significantly in 2022 due to a combination of heightened geopolitical threats, and the digitalization of commodities and industries to support decarbonization efforts and boost businesses’ economic competitiveness and performance.
