Mexico’s BIVA, IFC Launch Sustainability Governance Framework

Mexico’s Institutional Stock Exchange (BIVA) and the International Finance Corporation (IFC) have signed a cooperation agreement aimed at strengthening sustainability-aligned corporate governance and climate-risk management across Mexico’s capital markets. The initiative seeks to raise issuer standards to international levels, broaden access to sustainable financing and attract new companies—particularly medium-sized firms—to the country’s debt and equity markets.

The agreement centers on developing a new BIVA listing designation based on IFC’s Governance for Sustainability (G4S) methodology, a framework designed to embed governance, climate and sustainability considerations into board oversight and enterprise risk management. The designation is intended to serve as a signal of credibility for institutional investors increasingly required to allocate capital under ESG mandates.

According to BIVA and IFC, the project has a dual objective. It aims to elevate governance practices among current issuers while positioning Mexico as a more competitive destination for global capital that benchmarks opportunities across markets. IFC frames the partnership as part of its sustainable capital markets agenda, which seeks to reduce financing costs, channel resources to strategic sectors and support business growth in emerging economies.

A key focus of the alliance is addressing Mexico’s structural challenge of limited market participation. The country has fewer than 200 active long-term debt issuers, representing under 2% of large taxpayers. Yet INEGI data show that Mexico has roughly 38,500 medium-sized companies that could access capital markets if they adopted stronger corporate governance, improved transparency and institutionalized risk-management systems.

To bridge this gap, BIVA and IFC plan to develop an acceleration program that prepares medium-sized companies for eventual listing. The program will help firms align with sustainability governance standards before becoming issuers, improving their risk profiles and making them more attractive to banks, pension funds, insurers and private capital.

The partnership also aims to leverage Mexico’s new simplified issuance framework, designed to reduce regulatory friction and lower costs for SMEs and mid-market companies entering the stock exchange. While simplified issuances ease procedural burdens, the model still requires disciplined governance and disclosure. Under the BIVA–IFC approach, companies seeking to issue securities—simplified or not—will need to demonstrate formal board structures, climate-risk management processes and ESG-aligned policies to access institutional capital at competitive terms.

For listed companies, the forthcoming BIVA designation will require internal adjustments, including strengthening board composition, integrating climate considerations into risk assessments and improving non-financial reporting. In exchange, companies may gain advantages such as clearer differentiation from peers, access to investors managing sustainability-linked mandates and better pricing conditions for thematic or sustainable debt as the market matures.

IFC Takes Lead in Climate Financing Within Mexico

The BIVA–IFC agreement forms part of IFC’s broader initiatives, including its “30 by 30 Zero” program, funded by the German government through the International Climate Initiative (IKI). The program is designed to expand climate-related financing within Mexico’s financial sector in alignment with the country’s Nationally Determined Contribution (NDC) commitments. Its goals include raising the share of climate financing in the portfolios of six participating banks from US$8.22 billion to US$27.15 billion between 2022 and 2027, reducing these banks’ exposure to the coal supply chain, supporting the growth of Mexico’s sustainable capital market by promoting the issuance of US$204 million in green and climate-themed bonds and facilitating US$300 million in IFC-supported climate financing for Mexican banks.

These objectives are being pursued through five components. The first involves working with regulators and supervisors to design climate-focused ESG public policies, including creating a national sustainable taxonomy, led by the World Bank. The second focuses on strengthening the sustainable capital market—particularly its climate segment—by engaging institutional investors such as pension funds, under IFC’s Financial Institutions Group (FIG). The third supports a priority real-economy sector linked to Mexico’s NDCs, led by IFC’s Climate Business Department (CBD). The fourth component assists six target banks in advancing their climate transition by increasing green business and integrating climate-risk considerations, also led by IFC FIG. The fifth component aims to raise awareness and build capacity across the financial sector to expand climate finance, again under IFC FIG.