Mexico’s ESG Policies as Key Growth Drivers: MSS 2024 Insights

In response to the anticipated effects of climate change, such as droughts, floods, and other natural disasters projected for the next decade, Mexico is making international commitments through its ESG regulations. Experts warn that these events could disrupt supply chains, emphasizing the urgent need for companies to adapt and implement mitigation strategies in the short to mid-term. The inaugural Mexico Sustainability Summit 2024, held in Mexico City, brought together industry leaders to discuss insights and challenges related to the implementation and adoption of ESG policies across various sectors. 

For businesses, adopting ESG strategies–from carbon emissions to diversity policies–is increasingly vital, as consumers demand more transparency and action, according to law firm Creel, García-cuéllar, Aiza y Enríquez. Retailers, financial institutions, and companies in the mining and energy sector are actively seeking ways to lessen their environmental impact and engage with shareholders who prioritize eco-conscious practices. 

Mexico currently lacks specific laws mandating companies to address ESG issues. “The landscape is very green,” noted Roberto Calvet, Director General, ROCAL. While the government still has work to do regarding regulations, many companies are proactively pursuing Net Zero strategies to align with the United Nations’ Sustainability Goals for 2030.  Practical considerations such as reputational risk and market demands have compelled businesses to disclose their ESG strategies. Companies are also setting carbon-neutral goals ahead of the impending Carbon Tax. At the summit, participants showcased significant initiatives, such as the restoration of Texcoco Lake and innovative communication strategies for ESG campaigns. 

“In a world where consumers and investors demand responsible practices, companies that lead in sustainability will gain a competitive advantage and be remembered for their contributions to a healthier and more equitable future,” stated Gustavo Vinacua, CEO, Net Positive Labs. He emphasized that climate change already threatens business stability, making ESG policies a strategic necessity for long-term success. By adopting responsible practices, companies can reduce their environmental footprint, enhance their competitive position, and satisfy consumer demand for sustainable products.

Effectively communicating these initiatives to stakeholders poses a challenge for companies, with transparency and consistency being crucial for building trust and credibility. Klaus German Phinder, President, Ganar Ganar magazine, stressed the importance of clear, data-driven communication, pointing out that consumers favor sustainable brands and expect genuine commitment from companies. Successful ESG strategies require tailored messaging across diverse channels, fostering engagement with employees, customers, investors, and communities, while also mitigating reputational risks.

Sustainability Across Industries

Heavy industries, particularly the mining sector, are increasingly focused on implementing ESG strategies to minimize environmental and social impacts while ensuring transparency and accountability. Companies like New Gold are investing in renewable energy, water management, and community engagement to lower their carbon footprint and contribute to local development. “Our industry is unique due to the hazardous materials we handle. Our teams face significant risks, which requires us to step up,” stated Faysal Rodriguez, Senior Vice President, Mexico, Torex Gold Resources. 

In the energy sector, Alfredo Bejos, Vice President, AMGN, anticipates that President Claudia Sheinbaum’s National Energy Plan will address pressing challenges long awaited by energy stakeholders during López Obrador’s administration. “The cap on national oil production and the establishment of PEMEX Energía to support CFE indicate a promising administration committed to tackling Mexico’s energy issues.”

Sergio Villalón, Senior Vice President & General Manager for Mexico and Central America, Signify, noted that Mexico's regulatory environment lags behind other regions where significant projects are progressing. He highlighted that Mexico holds substantial potential for energy development from renewable and natural gas sources.

Money Matters, Supply Chains, and Consumption

Finance experts assert that the future of sustainability in Mexico relies on securing financing to implement ESG strategies, with both public and private financial institutions playing a crucial role in helping companies meet these standards. 

In 2023, Mexico's Ministry of Finance (SE) launched the Sustainable Finance Mobilization Strategy to channel resources toward low-carbon, climate-resilient, and inclusive investments, boosting sustainable bond issuance. “It is virtually impossible to implement all necessary sustainable measures solely with public resources. There is a significant opportunity for financial institutions to support this transition,” stated Enrique Lendo, Director General of Business Development, Energy and Water Development Corp.

Companies like Liverpool, ENGIE Mexico, and Grupo Bimbo have fostered collaboration with local suppliers and SMEs while addressing challenges such as process standardization and communication to ensure sustainability and ethical practices throughout the supply chain. However, Magdalena García, ESG Chief, Grupo DEACERO, noted that the “lack of formalization restricts our ability to consistently enforce ESG standards, making it more challenging to maintain uniform sustainability practices across the supply chain.”

While the potential for economic growth serves as a strong incentive, true conviction is what drives meaningful change, according to Francisco Fernández, Director, Conscious Enterprise Center (CEC), Tecnológico de Monterrey. Companies must understand the principles of Conscious Capitalism, a transformative framework that prioritizes purpose over profit. This approach is built on four key principles: pursuing a higher purpose by addressing issues in a sustainable manner, recognizing the interdependence of stakeholders, fostering conscious leadership, and cultivating a genuine culture of care for individuals across all touchpoints. 

Mexican cities are implementing eco-conscious principles through urban planning that prioritizes green infrastructure. However, cities grapple with limited financial resources, complex regulatory environments, and logistical challenges, particularly with rampant real estate development, as Leticia Gutiérrez, Executive Director and Vice President, Conservation International Mexico, explained.

“One of the primary obstacles is reconciling ourselves with nature at all levels—a significant cultural barrier,” Gutiérrez noted. “The lack of resources at the neighborhood level complicates efforts to create green spaces.” Although municipalities face budget constraints, public-private partnerships (PPPs) can incentivize investment, she added.