ESG Budgets Rise in Mexico, Central America, KPMG Finds

Eight in 10 companies in Mexico and Central America now allocate annual budgets to environmental, social and governance (ESG) initiatives, but most spending remains focused on regulatory compliance, according to Panorama ASG en México y Centroamérica 2025, a new study by KPMG México.  The survey, conducted in October 2025, gathered responses from 90 business leaders across industries including finance, manufacturing, energy, telecom, transport, retail, automotive, and food and beverage. The companies operate in eight countries and range in size from under US$25 million to more than US$1.5 billion in annual revenue.

KPMG found that 57% of ESG budgets in Mexico and 40% in Central America are directed toward meeting environmental and social regulations. Half of companies in Mexico and 60% in Central America said ESG contributes to improving quality of life and environmental protection. Additionally, 39% and 42%, respectively, view ESG as essential for business viability, while 59% and 60% said ESG information helps anticipate risks and opportunities.

“The conversation on ESG accelerated after the pandemic. Now it is essential to move from discourse to measurable action,” said Juan Carlos Reséndiz, lead partner for Corporate Governance, Risk and Sustainability Advisory, KPMG México. “Organizations increasingly recognize the importance of ESG for anticipating risks and ensuring business continuity.”

Despite rising awareness, only 35% of companies in Mexico and 39% in Central America have achieved a high level of ESG integration in operations and strategy. Another 33% and 19% operate at a medium level, incorporating only two of the three pillars. As a result, just 33% of Mexican companies and 36% of Central American firms have a formal sustainability strategy aligned with business goals. Nearly half in Mexico and more than a third in Central America run ESG initiatives without strategic alignment, while only 43% and 35% use ESG data to inform decision-making.

A key theme throughout the report is the lack of strong financial commitments toward ESG targets. In Mexico, 27% of companies allocate less than US$40,000 annually to ESG, compared with 21% in Central America. Mexican companies direct 41% of budgets toward compliance with new Sustainability Information Standards linked to financial reporting and 39% to ESG reporting. In Central America, 47% invest in community initiatives and 42% in reporting.

Governance structures also remain inconsistent. One-third of companies in Mexico and 43% in Central America said boards actively lead ESG initiatives, while 30% and 19% see ESG mostly as a compliance matter. More critically, 53% in Mexico and 60% in Central America do not include ESG metrics in executive compensation.

“The regional sustainability vision must go beyond compliance,” said Cristina Gutiérrez, consulting director, KPMG Costa Rica. “Integrating ESG into business models helps anticipate risks, drive innovation, and sustain long-term market presence.”

Key risks for companies include health and safety—cited by 40% in Mexico and 49% in Central America—and energy generation and efficiency, identified by 40% and 23% respectively. Emissions are the top environmental concern for 56% of firms in Mexico and 42% in Central America. Social concerns vary, with 32% of Mexican respondents citing work-life balance and 49% in Central America pointing to community impacts.

For reporting, the Sustainable Development Goals are the most commonly adopted communication framework—58% in Mexico and 36% in Central America. Global Reporting Initiative standards are used by 48% of firms in Central America and 42% in Mexico. However, companies continue to face technological and data-related constraints that hinder traceability and risk forecasting.

“The real value will emerge when companies make sustainability a cross-cutting business driver,” said Jessica Jiménez, sustainability advisory partner, KPMG México. “Clear, consistent, and data-driven communication will strengthen stakeholder trust and support more resilient business models.”