ESG reporting for Afores

Today we want to discuss an implication of the recent modification to the Circular Única Financiera (CUF) that impacts Afores in Mexico.

Among other things, the modification issued on February 16, 2024, discusses ESG reporting regulation for Afores. In simple terms, Afores must now report sustainability-related information about the portfolios they manage to CONSAR, aligning with a recognized reporting framework.

How is this seen in other countries?

Many pension funds globally have adopted the integration of ESG factors into their investment processes. Here are 5 good examples of how to disclose this integration:

1. CPPIB (Canada Pension Plan Investment Board): This Canadian pension fund has implemented strategies to address ESG factors and has a clear policy on responsible investments. Here you can see its latest sustainability report where it discusses its management approach and portfolio results.
2. Norges Bank Investment Management (NBIM): Norway’s sovereign wealth fund, also known as the Government Pension Fund, is known for its focus on integrating ESG into its investment strategy. Its report showcases how it achieves this and how it measures its progress.
3. AustralianSuper: One of Australia’s largest pension funds, AustralianSuper integrates ESG factors into its investment decisions and publishes sustainability reports, including a climate change report where it shares its progress.
4. USS (Universities Superannuation Scheme): The UK university pension fund also has a responsible investment policy that incorporates ESG factors into its decision-making process. Its annual report discusses how it integrates these factors.
5. Ontario Teachers’ Pension Plan (OTPP): This other Canadian pension fund is recognized for its focus on responsible investing. Its annual report discusses its vision and shares key ESG data.

These pension funds are just a few examples of institutions that are leading the way in integrating ESG factors into their investment strategies. Each of them regularly publishes reports on their ESG-related activities and their impact on their portfolios.

It will be interesting to see how the Afores begin to share this information now.

I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.

Best,

Marimar

CEO, Miranda ESG