Mexican Companies Face Rising ESG Reporting Expectations

As governments, investors, and consumers  increasingly demand sustainable business practices, environmental, social, and governance (ESG) reporting is set to become a mandatory feature of corporate operations. For Mexican companies, this will require understanding both domestic and international ESG reporting requirements, meeting the evolving expectations of investors and consumers, and recognizing the business benefits of sustainable practices.

In Mexico, all companies issuing financial reports must comply with the new Sustainability Information Standards (NIS) introduced this year by the Mexican Council of Financial and Sustainability Information Standards (CINIF). The first standard, NIS A-1, provides a conceptual framework  for drafting ESG reports, while the second, NIS B-1, is more consequential. NIS B-1 defines 30 basic sustainability indicators that companies must disclose, including greenhouse gas (GHG) inventories, energy consumption, sustainable water use, land use in or near biodiversity risk areas, waste management, human capital investment, occupational health and safety, and corporate governance. Reporting will begin in 2026, covering the 2025 fiscal year.

Miguel Chavarría of South Pole, a decarbonization consultancy, notes that these standards mark a major shift for corporate ESG reporting in Mexico. “Traditionally, companies have relied on voluntary international standards such as the Global Reporting Initiative (GRI). Now, reporting will be regulated,” he explains.

Mexican companies will also face international pressures, such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which begins in 2026. CBAM aims to prevent carbon leakage by requiring exporters to offset the carbon intensity of their goods, with costs calculated based on the EU Emissions Trading System (ETS) at the time of import. Chavarría warns that without accurate carbon accounting and transparent reporting, exporters could face competitive disadvantages.

Investor pressures further reinforce the need for robust ESG reporting. A KPMG survey found that 80% of business leaders consider ESG disclosures in M&A evaluations, with 45% reporting that ESG findings significantly affect deal decisions. Over half of those reported deals falling through due to negative ESG due diligence. A Stanford University study also found that nearly half of asset managers in Europe and North America factor ESG reports into investment decisions. For Mexican companies seeking foreign investment, meeting the most rigorous ESG standards is becoming essential.

Consumers are also driving change. A 2024 PwC survey of over 20,000 consumers found that 85% consider corporate sustainability in purchase decisions and are willing to pay an average 9.7% premium for eco-friendly products. A 2023 Bain & Company study found that 50% of consumers rank sustainability among their top four purchase criteria, with willingness to pay a 12% premium. With over half of Mexican consumers skeptical of companies’ ESG commitments, those perceived as failing to transparently disclose ESG data, or greenwashing, will struggle for market share. 

Beyond regulatory compliance, ESG reporting can also reveal opportunities for efficiency and cost savings. A 2020 McKinsey study found that companies with strong ESG practices can reduce operating costs by up to 60% through resource efficiency and waste reduction. Chavarría emphasizes that ESG reporting should be viewed as a tool for resource optimization, helping companies reduce defects, minimize waste, improve efficiency, and generate savings. He notes that sustainability projects identified through ESG reporting can deliver internal rates of return of 10%–15%. “ESG reporting is no longer a decorative function—it is a core driver of profitability,” he concludes.

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