Citibanamex-BlackRock Launches ESG Option

Mexican consumers did not have to wait long to see their options for sustainable investments increase. After last week’s announcement by Santander that it would launch the country’s first ever ESG-compliant sustainable investment option, Citibanamex and BlackRock have done the same.

According to El Economista, the bank and investment management firm are to launch their Global ESG Balanced Strategy in Foreign Currency fund, backed by MSCI, with the intention of making it a central pillar in the portfolio of Mexican investors.

These sustainable funds reflect a more general change among consumers who now consider ethical and sustainable issues as important in their financial decisions. In April 2019, Bloomberg noted a 34 percent rise in global sustainable investments over the previous 24 months, reaching a value of US$30.7 trillion. BlackRock Mexico CEO Samantha Ricciardi told El Economista that sustainable investments would be central to the firm’s business strategy due to the increasing frequency that customers request them.

Though the interest in sustainable investments is growing globally, companies appear to be lagging behind what consumers are demanding in terms of transparency on their investments. The Global Sustainable Investment Alliance published a report in December last year on the implantation of the Task Force on Climate-Related Financial Disclosures (TCFD), an initiative that aims to “develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers and other stakeholders.” The report found that 34 percent of the 272 respondents had “already incorporated TCFD disclosures into their investment analysis,” while another 26 percent would do so by the end of 2020 and a further 9 percent some time after 2020. However, a whopping 87 percent did not “believe that markets are consistently and correctly pricing climate risks into company and sector valuations.”

As noted in Mexico Business Publishing last week, of the 9,000 ESG investment schemes around the world, just 350 are found in Latin America. Given the region’s environmental importance in the global fight against climate change, this number should grow rapidly.

The Inter-American Development Bank’s IndexAmericas rates the region’s companies in terms of their sustainability commitment. There are three Mexico-based companies in the index’s Top 100 list for 2019: America Movil, Grupo Financiero Banorte and Walmart de Mexico.