In January 2020, EDF Trading appointed its first female head when Béatrice Bigois, then Managing Director for Customers at EDF Energy, became one of the few female leaders of a major trading house. Here, she talks to Damian Stewart, Managing Partner EMEA and Asia at Human Capital, about culture, strategy, and building a trading platform for the future.
Béatrice Bigois joined French state-owned electricity company EDF in 1994 and held a variety of roles in finance and risk management. She moved to London in 1999 to take up a role at EDF Energy, initially to set up and run the risk management department. That same year, EDF Trading was born via a joint venture with Louis Dreyfus, to risk manage EDF Group’s global power generation assets. Four years later, EDF bought out Louis Dreyfus and EDF Trading became a wholly owned subsidiary of EDF Group, and in 2006 Bigois arrived, first as head of the Paris branch, then as Chief Financial Officer.
In 2014, Bigois was appointed Managing Director, Customers at EDF Energy, a role she held for six years only to return to EDF Trading at the start of 2020 as CEO. Today, the business is a prominent player across global energy markets, active throughout the value chain in electricity, natural gas, LPG, and environmental products as well as LNG and coal (through JERA Global Markets) and managing assets from production, shipping, transportation, and supply.
“EDF Trading was established as a joint venture with a trader, with a vision to really centralise and ringfence energy market risks but also to accelerate the group’s development of energy market activities,” says Bigois. “The group was really conscious that it would not manage to be a first-rate player unless it brought in external experience and skills, which would have been hard to do without a partnership of some sort.”
That tie-up with Louis Dreyfus set the tone for what the business was to become, acting as an enabler, incubator, and accelerator to get the trading division off the ground. “The vision stands today,” says Bigois. “Our vision remains to provide a dedicated environment where EDF Group energy risks are centralised and managed, while maximising the value of group and third-party assets. We have expanded very quickly, leveraging our platform to generate earnings through third-party trading activities.”
The trading business employs around 800 people across Europe, the United States, Canada, and Asia and has become one of the world’s largest and most profitable commodity trading businesses. Shareholder equity has grown from €460m in 2004 to around €3bn today.
Bigois has put agility and innovation at the heart of the corporate culture: “It is because we are agile and innovative that we can seize the right market opportunities,” she says. “In practice, that means we invest in people, we invest in technology, we seek to enter new markets, trial them, and if it doesn’t work, we try something else.”
Building a trading culture as part of one of Europe’s largest utilities was never going to be easy, even with the head start provided by Louis Dreyfus. “If you look at EDF, it’s not one culture, it’s many cultures. But trading is a different culture again, with different skillsets, economics, and career paths. EDF understood that they couldn’t do that organically and they needed to start it outside the main business.”
She adds: “Over time we developed people with an ability to understand both the utility culture and the trading culture. We needed to build those bridges in order to develop trading, as well as to organise some disruption from within.”
The Houston office was set-up in late 2008 and established EDF Trading as one of the major players in the North American wholesale power markets and a leading gas marketer. Before that, came a partnership with Japanese utility Chubu Electric Power in Nagoya earlier that year. That arrangement saw EDF Trading putting its trading skills and knowhow to work to help Chubu optimise coal procurement for its domestic power stations, allowing both to engage more effectively with the international coal and freight market from Nagoya and then subsequently from Singapore.
In 2015, Chubu formed a joint venture with Japanese utility Tokyo Electric Power, called Jera, and in 2017, EDF Trading sold its coal trading division to Jera while keeping a 33% stake in the JV. This move allowed EDF to recentre coal activities around Asia and scale up the existing partnership with Chubu Electric.
Jera is also the largest buyer of LNG in the world, with around 35 million tonnes purchased per annum. “Very quickly we realised we could also apply our skills to LNG procurement and optimisation around the energy portfolio of Jera for the mutual benefit of the JV partners,” says Bigois. “That led to the incorporation of the JV around LNG in April 2019.”
EDF Trading was able to bring a competitive edge in Europe and North America through its gas trading activities, alongside its access to a portfolio of pipeline, storage, and re-gas assets. “We also bring the trading and risk management skills and systems; we have people who understand portfolio optimisation, physical trading, and the experience of managing relationships within a utility, because that’s what we do every day,” she says. “When Jera decided they wanted to accelerate their own learning on energy markets and developments around risk management, they decided on a JV with us. That partnership is going from strength to strength – it has been very successful to date and it is developing extremely fast thanks to the complementarity between the partners.”
Certainly, the decision by EDF to sell the coal business into the JV was motivated by a step back from coal: “The move out of coal-fired generation is well underway in Europe and it is interesting to see that move starting in Japan as well with Jera making some commitments to reduce their carbon footprint.”
Trading companies occupy a difficult position when it comes to decarbonisation, being neither producers or consumers but sitting in the middle and arguably in a position of influence. Bigois says: “Our role as a trader is not to set policy or influence policy. Instead, we facilitate the implementation of policies and, at the minute, the world is moving towards decarbonisation, which is enabled by data and digital technologies facilitating decentralisation. You have a real system change here, changing the way energy is produced and consumed.”
She adds: “As a trader, we see the risks but also the opportunities. Our role is to adapt and turn those opportunities into tangible commercial business lines. We are reactive, and in being innovative and fast-moving we can accelerate those movements.”
EDF Group has recently restated its purpose of working towards a net zero future: “We are providing services to the group, embracing those principles and focusing on the opportunities created by the transformation of the energy landscape,” says Bigois.
In her previous role with EDF Energy, she was heavily involved in the decentralisation of power markets, the growth in electric vehicles, and trends in battery storage. How much of a threat are the battery operators looking to establish themselves in the wholesale market, including non-incumbents like Tesla, Amazon, and Apple?
“The way the world is changing we need to adapt our way of looking at who is a competitor and who is a partner,” says Bigois. “You can have someone who is a customer and also a competitor as well as a partner. The world is getting more complex and whereas before everyone could stay in their own silos and tackle their own problems, that is no longer the case.”
She adds: “You can see people entering the market, especially at the customer end, with no prior knowledge of the industry and doing better business than the incumbents. Then you start realising that to do business you need to start opening up and partnering with others. It is not about trying to reinvent the wheel and build skills you don’t have but sharing skills and going into partnerships.”
She comes back to culture, and the need for diversity: “The complexity of the world means that boundaries between sectors are getting blurred and unless you develop a culture that allows you to partner up with others, there is a danger of getting lost. You need to be really sure about what you bring to the table. Diversity helps you grasp that complexity, because you need a diverse set of skills and diversity of thought to tackle some of the problems we are facing. That’s not specific to trading but applies to all sectors, particularly where digitisation is disrupting activities.”
As one of the few female CEOs at an energy trading business, she is passionate about building a diverse workforce across the industry. She says: “Gender diversity is interesting because it’s the most visible form of diversity, but the ultimate goal is to have diversity of thought.”
She feels the spotlight needs to be shone on encouraging girls into studying STEM subjects. “A lot of the roles in our industry require a STEM skillset,” says Bigois, “and the reality is that finding and identifying women for these roles can be a challenge; the pipeline is scarce. But the future demand for those skills is increasing, so we need to find ways to influence the choices made at a young age and to inspire young girls to choose STEM subjects.”
Both EDF and EDF Trading have a duty to contribute, she argues, pointing to a series of campaigns they have been involved with. Those include a partnership with the charity Stemettes, which focuses on encouraging girls into STEM subjects, that saw EDF Trading host a day in the office where school-age girls visited to see trading in action and get a tangible impression of the business.
Bigois has also put a focus on recruiting and removing bias from that process, including taking a close look at the wording of job advertisements and making efforts to see a more diverse pool of candidates for roles.
And, somewhat reluctantly, she has also accepted she needs to share her story: “I don’t think of myself as a role model – it’s difficult to think of yourself like that – but actually we are. In the place where we are, we have visibility, and it is important that we raise awareness of women leaders. People don’t have to put themselves out in public – I know I have been very sensitive to that, but when I’m approached by men or women to talk about their careers, I always say yes. It’s important we take time to do that.”
In her role as MD of Customers, Bigois picked up a loss-making business and turned it around, something she puts down to cost reduction but also a cultural shift. “Without the cultural shift we would have had good outcomes,” she says, “but the extraordinary outcomes came because of the cultural shift underpinning it. Part of that was around developing diversity and being a lot more open, not trying to reinvent things or do things we couldn’t do as well as others but knowing where our competitive edge was in the market.”
She adds: “We ended up, when I left, best in class for service, we were profitable, and we had reduced costs by a third. People understood it because it was very tangible over five or six years. It’s very difficult sometimes in an already successful business to land that point.”
At EDF Trading, the cultural focus has been on agility and innovation, while Bigois stays true to her belief in not trying to tackle everything when partnerships with others will be more effective.
Today’s challenges centre on digitisation: “We have an opportunity to seize around data,” she says. “We can’t start from scratch, because we have a massive asset already in the shape of data we have accumulated over many years. Even though we are a young company, we still have the pain of transformation but it’s worth going through it. We believe that if we manage to modernise our systems around data and leverage the assets we already have, that will be extremely powerful.”
So far, the business is yet to invest in industry initiatives around cryptography and tokenisation, but Bigois is watching the space: “We will certainly embrace those technologies; they have a place for sure. We remain open – as long as technology works and helps precipitate our business, we will embrace it.”
Having had the benefit of stepping away from EDF Trading for six years, she saw a big difference when she returned at the start of 2020: “The business has evolved and people have joined with data capabilities, developing new models, creating systems that store more data and pull more data to help us make decisions faster. The pace of trading has increased, the volumes have increased, and it’s only going one way – the speed of change is actually exponential.”
She is confident that the business she has known for so long stands ready to cope with whatever the future brings: “Because of our DNA, we adapt without knowing it sometimes,” she says. “It requires top-down vision as well as bottom-up initiatives to keep pace with the evolution of the market.”
In Conversation with…
The ICW series looks at key trends in the energy and commodities markets with senior industry leaders. Whether discussing diversity in the workforce or the impact of new technologies, the aim is to shine a light on some unique market perspectives, showcasing both the personalities at the pinnacle of the market and their views on the issues of the day.