Mexico's Sustainable Finance Panorama: Highlights From 2022

The Mexican sustainable finance market witnessed substantial growth in 2022, marking a milestone in investment and financing with ESG criteria, as shown in the State of the Market Report 2022, published by the British Embassy in Mexico.

Through the UK PACT program for the Mexican Council for Sustainable Finance, advances are evident across multiple sectors of the Mexican financial system. This includes the stock market, banking institutions, and regulators, all of which are actively committed to sustainability and corporate social responsibility.

In 2022, the Mexican Stock Exchange revealed that 44% of the funds raised through long-term debt issuances were tied to sustainability, denoted by green, social, sustainable, or related labels on the bonds. This achievement stands out as one of the most significant advances in the national market, highlights the report. Furthermore, the institution recorded the issuance of eight labeled bonds, totaling MX$17.2 billion (US$987.95 million) that year. As a result, the overall amount of labeled debt saw a remarkable 44.17% increase compared to the figures from 2021.

The Mexican Association of Real Estate FIBRAs (AMEFIBRA) reported a cumulative figure of over US$1.5 billion in labeled bond issuances, green credits, and sustainability-linked transactions. Moreover, there was a notable increase in LEED, EDGE, and BOMBA certifications for real estate assets, ensuring efficiency practices across properties. Certified space grew substantially, escalating from 2.8 million m2 in 2021 to 6.15 million m2 in 2022, which represents a 219% surge. 

The report underscores a record-breaking issuance of labeled bond certificates, with significant participation from the federal government and corporate issuers. Likewise, it emphasizes progress of institutional investors in incorporating ESG criteria into decision-making and in fostering specialized talent for the analysis of environmental and social risks. 

Meanwhile, the banking sector showcased efforts to amplify sustainable financing and reshape its credit portfolios through Development Banking. In this context, Banobras reported a comprehensive portfolio balance in sustainable projects reaching MX$80.2 billion and documented a total of MX$5.4 billion in sustainable loans for 2022. Additionally, the institution issued sustainable bonds with a gender perspective, accounting for MX$4.4 billion. Similarly, FIRA reported a sustainable project financing balance of MX$16.8 billion at the end of 2022. 

In terms of accountability, companies exhibited significant growth in disclosing ESG information, with an increase in the use of SASB (Sustainability Accounting Standards Board) standards and greater alignment with the recommendations of the TCFD (Task Force on Climate-Related Financial Disclosures). Meanwhile, regulators continued to work on the national sustainable financing agenda, involving diverse actions such as sustainable taxonomy, climate risk analysis, ESG disclosure, and capital mobilization.