Reporting Standards, NDC 3.0 and COP30: 2025 in Sustainability

2025 brought with it both progress and continued challenges for sustainability in Mexico. In January, a pair of new sustainability reporting standards came into effect in Mexico,  requiring nearly all Mexican companies to submit rigorous, standardized ESG disclosures.  However, these requirements have yet to drive deep transformations in corporate business models, fueling growing public skepticism about companies’ genuine commitment to addressing climate change.

At the COP30 climate summit in Brazil, the Mexican government presented its updated Nationally Determined Contribution, outlining the country’s commitments to keeping global warming under 2°C above pre-industrial levels. The ambitious document was the result of a lengthy consultation process carried out by the Ministry of Environment and Natural Resources (SEMARNAT), involving academia, civil society and the private sector. Still, commitments to cut greenhouse gas emissions by 35% within a decade clashed with the steep cuts to federal environmental institutions and programs contained in President Claudia Sheinebaum's first federal budget for 2026.

On the international stage, Mexico assumed a leadership role, adopting progressive stances during negotiations on a UN Global Plastics Treaty and the COP30 Final Agreement, while hosting several regional climate conferences. Despite the efforts of Minister of Environment and Natural Resources Alicia Bárcena — a veteran environmentalist and climate scientist — Mexico’s pro-environment foreign policy was overshadowed by that of the United States. Under the administration of President Donald Trump, Washington has forcefully pushed back against climate policies at home and abroad, contributing to gridlock in international climate negotiations and a global rollback of corporate ESG commitments. 

Looking towards 2026, Ricardo Monreal Ávila, President of the Political Coordination Board (Jucopo) in the Chamber of Deputies, has called on Mexico to remain ambitious in the fight against climate change. “To preserve its climate leadership in Latin America, our country must strengthen its environmental institutions, ensure citizen participation, and prevent its standards from being weakened by trade pressures,” says Monreal. He emphasizes that while the US may pull back its climate commitments, “Mexico still has the opportunity to reaffirm that its vision of development is based on the collective right to a viable and environmentally just future.” 

New Corporate Sustainability Reporting Standards

Effective Jan. 1, 2025, all Mexican companies issuing financial reports were required to comply with the new Sustainability Information Standards (NIS) introduced in 2024 by the Mexican Council of Financial and Sustainability Information Standards (CINIF). 

The first standard, NIS A-1, establishes a framework for the development of individual NIS and their application in drafting ESG reports, setting quality requirements for the terminology and data included within them. 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. NIS-compliant reporting will begin in 2026, covering the 2025 fiscal year.

To support small and medium-sized enterprises (SMEs), CINIF launched a free, public GHG Emissions Calculator in July 2025. The tool enables companies to calculate Scope 1 (direct) and Scope 2 (indirect) emissions, as well as total and renewable energy consumption. Starting in 2026, failure to submit NIS-compliant sustainability disclosures may result in sanctions ranging from fines to administrative arrest and, in extreme cases, business closure. While companies may include 2025 sustainability data in the notes to their 2026 financial statements, disclosures for fiscal year 2026 must be presented in a standalone sustainability report.

Separately, on Jan. 28, 2025, the federal government issued a decree requiring issuers listed on Mexican stock exchanges to publish annual sustainability reports aligned with the IFRS Sustainability Disclosure Standards (IFRS S1 and S2), issued by the International Sustainability Standards Board (ISSB) in 2023. IFRS S1 sets general disclosure requirements for sustainability-related risks and opportunities that may affect financial performance, cash flows and access to capital. Meanwhile, IFRS S2 focuses specifically on climate-related risks and opportunities, with emphasis on metrics such as GHG emissions (Scopes 1, 2 and relevant Scope 3), climate exposure, capital allocation, internal carbon pricing and executive remuneration linked to climate targets. As with the NIS, IFRS-aligned reporting becomes mandatory in 2026 for fiscal year 2025, with sustainability reports filed separately from financial statements.

As a result, 2025 saw Mexican companies publish increasingly standardized sustainability reports aligned with global norms. According to Universidad Panamericana and Roland Berger, 84% of Mexico’s top 100 companies now issue formal sustainability reports, and 93% disclose their reporting methodologies. However, improved reporting has not translated into full emissions transparency. A UN Global Compact Network Mexico and GlobeScan study found that only 50% of Mexican companies measure Scope 1 and 2 emissions, while nearly 75% do not measure Scope 3 emissions — which typically account for up to 90% of total corporate emissions. Reflecting these gaps, 55% of Mexicans surveyed expressed skepticism toward corporate ESG reporting, citing greenwashing as a primary concern.

Among companies reporting across all three scopes, PEMEX disclosed a 5.83% decline in total emissions in 2024, largely driven by reduced production and a drop in Scope 3 emissions from 396.51 to 372.91 million metric tons of CO₂e. Tetra Pak reported a 7% reduction in absolute emissions, while Aeroméxico reported a 7% increase. Heineken disclosed a 33% reduction in Scope 1 and 2 emissions compared with 2022 but did not report Scope 3 data. Home Depot México, which also omitted Scope 3 figures, reported a 2% increase in Scope 1 and 2 emissions. Grupo Aeropuertario del Centro Norte (OMA) fared worse, reporting a 40% year on year increase in emissions while similarly not reporting on Scope 3 emissions. 

Mexico’s New Climate Policy Under the Microscope 

2025 also marked the first full year in office for President Claudia Sheinbaum, an environmental engineer whose academic work prior to politics focused on energy efficiency and climate change mitigation strategies. Under her leadership, Mexico took a leadership role in the global fight against climate change, spearheaded by Minister of Environment and Natural Resources Alicia Bárcena — a renowned environmentalist and climate scientist whose resume includes posts at the United Nations Environment Program (UNEP), United Nations Development Program (UNDP) and Economic Commission for Latin America and the Caribbean (ECLAC). 

Bárcena led Mexico through the drafting of its updated Nationally Determined Contribution (NDC 3.0), as part of the country’s commitments to the 2015 Paris Agreement. The updated NDC, which was presented at COP30, outlines specific policies Mexico will take to reduce carbon emissions, strengthen adaptation and resilience, and keep global warming well below 2°C above pre-industrial levels. It replaces NDC 2.0, which was published in 2022 and criticized for having lofty goals — such as a 35% reduction in greenhouse gas emissions by 2030 — that were not supported by solid operational plans, clear budgets, or clearly designated institutions.

While NDC 2.0 was structured around only two elements — mitigation and adaptation — NDC 3.0 integrated three additional features: losses and damages; implementation of methods and enabling conditions; and transversal themes. The plan included a commitment to a 35% reduction in GHG emissions by 2035, including an absolute target of 564 million tons CO2 equivalent (tCO2e) to 604 million tCO2e. NDC 3.0 also includes goals of 38.5% clean electricity generation by 2030 and 43.3% by 2035, while supporting climate resilient construction, climate finance, risk mitigation and technology transfers. In a historic first, the plan commits to integrating the perspectives of women, Indigenous peoples, Afro-descendent communities, youth, and other underrepresented groups in climate policymaking. 

However, Bárcena’s reform agenda collided with the Sheinbaum Administration’s fiscal priorities. Under the proposed Federal Expenditure Budget Project (PPEF 2026), SEMARNAT’s budget falls to just over  US$103 million, a 4% real-term decline from 2025. Funding for the National Commission of Natural Protected Areas (CONANP) drops to roughly US$52 million — its lowest level in 21 years — while PROFEPA faces a 3.3% cut, leaving just US$1.5 million for operations.

In contrast, fossil fuel spending rises sharply. PEMEX will receive US$28.2 billion, up 7.7% year over year. The Ministry of Energy (SENER) sees an 86.8% budget increase to US$14.5 billion, of which only 1.4% is allocated to clean energy. Most renewable funding covers administrative expenses, leaving minimal resources for new projects.

Mexico Takes a Leadership Role on the International Stage

The first full year of the Sheinbaum administration also saw Mexico take on a leadership role within international climate negotiations. During UN negotiations on a Global Plastics Treaty in August, Mexico and Switzerland led proposals to phase out single-use plastics and eliminate hazardous chemicals, despite resistance from oil-exporting nations. Pedro Prata of the Ellen MacArthur Foundation praised Mexico’s position as “bold and forward-looking,” particularly given its role as a plastic resin producer.

Later that month, Mexico City hosted the “Ministerial Reunion of Latin America and the Caribbean for the Implementation of Regional Climate Action,” which gathered representatives from 22 countries across the region to coordinate a unified climate agenda ahead of the COP30 summit. The 19-point declaration issued at the close of the summit emphasized just mechanisms for climate finance and implementation, urging developed nations to assume greater responsibility for the energy transition. It also underscored the need to integrate small Caribbean nations, as well as Indigenous and Afro-descendant peoples, into global climate negotiations.

In September, SEMARNAT participated in NYC Climate Week, followed by Mexico’s first-ever Climate Week at the Papalote Museo del Niño, drawing over 10,000 attendees and 200 organizations. According to Ángela Barranco, Executive Director for North America at the Climate Group, Mexico Climate Week “positioned Mexico as a regional climate leader by showcasing its climate initiatives, fostering collaboration, and building momentum ahead of COP30 to drive ambitious action across Latin America.” 

At COP30 in Belem, Mexico joined Brazil, the UK and Colombia in backing a roadmap for phasing out fossil fuels. However, the final declaration omitted any reference to hydrocarbons amid opposition from oil-exporting countries. The summit was criticized by environmental and indigenous groups for the overwhelming presence of industry lobbyists, including more than 1,600 fossil fuel lobbyists and over 300 representatives from the agricultural sector. This came as many indigenous activists and groups were prevented from meaningful access to the negotiations. For its part, the US made history at COP30 by refusing to send an official country delegation for the first time in its history, despite active participation from individual US politicians such as California Governor Gavin Newsom and New Mexico Governor Michelle Lujan Grisham. 

US Pushes Back Against Climate Policies as ICJ Issues Landmark Ruling

Washington’s absence from COP30 epitomized another central theme of 2025: US President Donald Trump’s all out assault on climate policy. Upon taking office on Jan. 20, 2025, Trump immediately withdrew the US from the 2015 Paris Agreement for a second time, threatening the survival of the landmark UN treaty that aims to limit global warming to 1.5°C above pre-industrial levels. In July, the Environmental Protection Agency (EPA) rescinded the “Endangerment Finding,” a 2009 legal ruling declaring that greenhouse gas (GHG) emissions put public health and welfare at risk. The ruling provided the basis for the Clean Air Act, a tool that allowed the government to regulate emissions from vehicles, engines, power plants, and oil and gas operations. 

Trump also used Washington’s economic and geopolitical leverage to pressure other countries to scale back their own climate commitments. Throughout the year, his administration pledged to impose tariffs and port fees on nations seeking a global agreement to decarbonize the shipping industry, while requiring trading partners to purchase US oil and gas. This pressure has also extended to the private sector, with many companies and sectors scrapping their ESG policies in the hopes of avoiding the president’s wrath. In September, the Net-Zero Banking Alliance (NZBA) — a UN-backed coalition requiring members to tie lending and investment to climate targets — suspended its operations following a series of high-profile withdrawals from major banks. While a number of US banks including Goldman Sachs, Wells Fargo, Bank of America, Citigroup, Morgan Stanley, and JPMorgan Chase exited the alliance after Trump’s electoral victory in late 2024, 2025 saw international banks such as BMO, HSBC, UBS, and Barclays all leave the group.

While 2025 was characterized by an overall rollback of climate legislation and commitments, the year also ushered in a landmark advisory opinion on climate change by the International Court of Justice. The ruling, issued by a unanimous panel of 15 judges, affirmed that states have legally binding obligations under international law — including human rights treaties — to reduce greenhouse gas emissions (GHG) and protect vulnerable populations. Critically, the Court ruled that failure to act on climate change “may constitute an internationally wrongful act.” 

ICJ President Judge Yuji Iwasawa emphasized that states must “cooperate to achieve concrete emission reduction targets.” He concluded that access to “a clean, healthy and sustainable environment” is a fundamental human right, essential to the enjoyment of all other rights —  a ruling that is set to shape climate litigation and policy for decades to come.