ESG Criteria for Mexico in 2024

As global awareness of Environmental, Social, and Governance (ESG) criteria grows, businesses looking to expand into new markets face increasing pressure to meet these standards. Mexico, a key player in Latin America's economic landscape, presents both challenges and opportunities for companies committed to sustainability. Therefore, understanding the ESG criteria in Mexico is essential for businesses aiming to establish a responsible and compliant presence in this dynamic market.

Environmental Regulations and Policies

Mexico has made significant progress in protecting the environment, focusing on renewable energy, waste management and emissions reduction. The General Law on Climate Change establishes ambitious objectives for reducing greenhouse gas emissions, to which companies must align. In fact, companies are encouraged to adopt sustainable practices, such as energy efficiency and waste reduction, not only to meet regulatory requirements but also to gain market approval.

In addition, Mexico's National Institute of Ecology and Climate Change (INECC) plays a fundamental role in monitoring and enforcing environmental regulations. INECC oversees the implementation of environmental policies, conducts scientific research and ensures compliance with environmental regulations. They monitor emissions, conduct environmental impact assessments, and make periodic inspections of industrial activities to enforce compliance. Through these actions, INECC ensures that companies operate within legal environmental frameworks and contribute to national sustainability goals.

It can be highlighted that, within the regulatory framework that governs environmental criteria in Mexico, the General Law of Ecological Balance and Environmental Protection is included, which lays the foundations for environmental responsibility. It requires companies to conduct environmental impact assessments and comply with specific regulations designed to protect natural resources and biodiversity.

Social Impact and Community Engagement

Social criteria emphasize the importance of fair labor practices, community participation and social development initiatives. Businesses must comply with labor laws that protect workers' rights, promote fair wages, and ensure safe working conditions. This is essential to maintaining a positive relationship with the workforce and avoiding legal problems.

Engaging with local communities and investing in social projects can also improve a company's reputation and foster long-term relationships. In a way, within the social criterion in Mexico, more corporate social responsibility (CSR) initiatives are expected, focused on education, health and the development of local infrastructure.

To highlight, it must be noted that the social regulatory framework includes the Federal Labor Law, which enforces standards for fair labor practices, worker safety and equitable wages. Companies must also consider the Social Security Law, which requires benefits and protections for employees, guaranteeing their well-being and safety.

Governance and Corporate Responsibility

Strong governance practices are crucial to building trust and maintaining transparency with stakeholders. In Mexico, companies are expected to implement robust anti-corruption measures, ensuring ethical business conduct and compliance with local and international standards. Effective governance includes clear policies on board diversity, executive compensation and shareholder rights.

Likewise, governance frameworks must also address risk management and ensure that decision-making processes are aligned with long-term sustainability objectives. This allows companies to be better equipped to face regulatory challenges and maintain investor confidence.

Additionally, the Mexican Stock Exchange (BMV) has implemented guidelines to improve the corporate governance of listed companies, promoting transparency and accountability.

It is important to mention that the regulatory framework for governance includes the Securities Market Law, which dictates transparency and disclosure requirements for public companies. It also emphasizes the importance of ethical business practices and anti-corruption measures, crucial to maintaining investor confidence and operational integrity.

How ESG is Measured in Mexico?

In addition to the INECC, the Federal Labor Law and the Social Security Law and the Mexican Stock Exchange, the Business Monitor of Corporate Reputation (MERCO) plays an important role in evaluating ESG performance. MERCO rankings consider corporate governance, environmental sustainability and social responsibility, based on surveys and evaluations of various interest groups. This multifaceted approach ensures that companies in Mexico contribute positively to sustainable development and social well-being, while maintaining high standards of corporate governance.

Why Choose Ongresso for ESG Sustainability Consulting?

Ongresso stands out as a premier partner in ESG sustainability consulting by offering a combination of extensive experience and personalized support to help companies succeed in the Mexican market. At Ongresso, you can expect:

1. Customized ESG Solutions: Our consultants offer customized ESG strategies that meet regional demands, foster sustainable growth, and ensure compliance with local regulations.
   
   
2. Regulatory compliance and risk management: Leveraging our experience, we help companies address potential challenges and operate smoothly within the legal framework.
   
   
3. Comprehensive ESG Reporting: Ongresso ensures compliance with strict reporting standards, including those of the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB).
   
   
4. Experience in Mexico's Green Taxonomy: Our knowledge of Mexico's specific guidelines, such as those detailed in national regulations and policies, positions us as leaders in advising companies on environmentally friendly investments.