Sustainable Sourcing: Imperative for Future Proof Supply Chains

Mexico’s proximity to the United States, its largest trading partner, and its access to both the Atlantic and Pacific oceans give it a unique position in global supply chains. However, the country faces new demands for greater local inclusion, ethical practices, and environmental stewardship, requiring companies to embed sustainability into all aspects of their operations.

In 2015, Mexico’s Ministry of Environment and Natural Resources (SEMARNAT) introduced the "Guidelines for Sustainable Supply Chains," providing companies with a comprehensive framework to incorporate sustainability into their operations. This framework focuses on environmental management, social responsibility, and ethical business practices while ensuring economic viability. In alignment with Mexico's national efforts, international financial institutions are stepping up to provide resources for sustainable supply chain financing. A notable initiative in this space is the US$500 million facility jointly established by the International Finance Corporation (IFC) and Citi.

María Andrea Rodríguez, Director of Communication, Culture, and Social Responsibility, Liverpool, emphasized the critical importance of exceeding current national and international standards. “It is essential for us to prioritize doing what is ethically right, rather than merely adhering to legal requirements. By adopting this proactive mindset, we can cultivate a culture of responsibility that not only aligns with regulations but also reflects our commitment to sustainability and social impact,” she stated. García further explained that this approach involves integrating sustainable practices into every aspect of the organization, from supply chain management to community engagement.

Ana Laura Ludlow, VP Chief Government Affairs & Sustainability Officer, ENGIE Mexico, highlighted that a crucial element of Mexico’s supply chain sustainability lies in its distributors. "To fully integrate ESG into our supply chain, we must look beyond large suppliers and focus on SMEs," Ludlow emphasized. She noted that ENGIE has developed a local procurement strategy centered on two key areas: awareness and training. This initiative aims to ensure local suppliers align with market needs and standards while promoting labor rights, human rights, and gender equity. "Supporting them in the medium term is essential for delivering long-term value," she added.

Jimena Hernández Cejudo, Global Sustainability Director, Grupo Bimbo, emphasized that the company’s supply chain strategy is built around three core pillars: developing better, simpler, and more natural recipes. “Achieving this vision requires robust partnerships with local suppliers. Together, we are developing resources that span the entire supply chain—from sourcing raw materials to improving packaging and distribution. This collaborative approach allows us to align with market demands while fostering sustainable practices across all touchpoints,” she explained.

García reiterated that although local distributors in Mexico have received increased support, they encounter numerous challenges when collaborating with large companies due to differing standards. “One of the major challenges is ensuring clear and accessible communication. New and smaller distributors need to have all the information necessary to meet our high standards. This is why we start with foundational training and progressively build their expertise through specialized modules, ensuring they acquire the most relevant knowledge,” she explained.

Magdalena García, ESG Chief, Grupo DEACERO, highlighted that the sector also faces significant challenges when collaborating with a diverse range of suppliers. “Working with a wide variety of distributors presents a unique challenge in terms of process standardization. We cannot hold a large, well-established company to the same expectations as a small, local business.” Magdalena García emphasized the sector’s difficulty in dealing with numerous informal suppliers—those who do not operate under formal contracts or agreements. “This lack of formalization restricts our ability to consistently enforce ESG standards, making it more challenging to maintain uniform sustainability practices across the supply chain,” she added.

Ludlow concluded that the key to building a robust sustainable supply chain is to make distributors feel like integral members of the company’s strategy. Experts agree that collaboration is essential, not only within individual company chains but also at the sector level. “Our collaboration extends beyond ourselves and immediate competitors; we aim to tackle challenges together. As a sector, we should establish standards in education, preventive health, risk mitigation, and more to foster a collective effort,” Magdalena García added.