New Sustainability Standards for Mexican Companies

The Mexican Council for Financial and Sustainability Reporting Standards (CINIF) has stipulated that by 2025, all companies that report financial statements must also comply with Sustainability Reporting Standards (NIS). The NIS, effective Jan. 1, 2025, is a regulatory framework that establishes the criteria and requirements companies must follow to disclose relevant information about their sustainable practices.

NIS’ implementation aims to align sustainability reports internationally, ensuring greater comparability and transparency in the information companies provide to investors and society at large. Sustainability reports have become an essential requirement and a valuable tool for enhancing any company's value. 

According to the Global Compact, sustainability represents a business opportunity that benefits companies by improving their relationship with employees. By adopting sustainable practices, companies enhance their reputation, attract and retain talent, optimize resources, and strengthen their relationship with consumers.

“In a global context where environmental, social, and governance issues are increasingly significant, these standards enable Mexican companies to compete on equal footing internationally,” emphasized Patricia Moles, Member of the Issuing Council, CINIF, in an interview with Expok.

Moles pointed out that the NIS were issued in 2022 upon realizing that the financial information provided by the council lacked reports on companies' sustainability performance. The economist highlighted that effective sustainability management opens opportunities for value generation, which is why CINIF users need to consider this before making investments, granting loans, or issuing insurance, among other decisions.

The NIS consist of 30 quantitative and qualitative standards divided into three areas. First, environmental topics are evaluated, including greenhouse gas emissions (Scopes 1, 2, and 3), energy consumption, the proportion of renewable energy used, water usage and management, waste generation, recycling efforts, and more. The second area focuses on human capital management within the company, addressing issues such as wage gaps, employee training hours, work-related accidents and illnesses, and professional development opportunities for employees. Lastly, governance and corporate behavior are assessed.

Moles highlighted that the NIS profoundly impacts how Mexican companies operate and report their activities. She stressed that increased transparency would allow stakeholders to more accurately evaluate companies' achievements and areas for improvement. This openness will be crucial for informed decision-making by investors and consumers alike, Moles noted.

Moles assured that the NIS will promote sustainable investment in the country, as the standardized disclosure of sustainability information will attract greater investment flows from funds interested in supporting responsible and sustainable business practices. Moreover, companies that efficiently adopt these new standards can enhance their image, gain better access to international markets, and unlock new business opportunities. Furthermore, the obligation to publicly disclose sustainability efforts will drive companies to seek new solutions and technologies to reduce their environmental footprint and improve their social impact. “In the long term, this will incentivize innovation and strengthen sustainable business strategies,” Moles stated.

Implementing the NIS presents significant challenges, however. One of the main obstacles for companies will be collecting and analyzing the required information, according to Moles, which can be a costly and complex process, especially for SMEs.

In this regard, a potential solution could be the digitization of operations and the implementation of AI. The second Global Sustainability Barometer report, developed by Microsoft and Kyndryl, shows that data integration and reporting tools can align sustainability objectives with core business priorities. Furthermore, AI has the potential to optimize resources, enhance energy efficiency, and proactively address challenges, the study highlights.

Moles noted that trained personnel are required to ensure the quality and accuracy of reported data, which could add an additional workload. However, CINIF has taken an active role in this area by offering training sessions through its website.

CINIF considers that adopting the NIS enables companies to more effectively manage environmental and social risks, strengthen their relationship with various stakeholders, and contribute to the development of a more sustainable future for the country. “Adopting the NIS is not only a demonstration of commitment to sustainability but also a strategy to reduce risks, optimize resources, and generate long-term value in an increasingly demanding market,” Moles concluded.