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Is climate risk well understood in Mexico?

This week, I want to talk about how well understood climate change risks are within Mexican corporates. For starters, only 15 companies (or 26% of the publicly traded Mexican companies who have carried out materiality assessments) have “designing a strategy for climate change” as a material topic among their analyses’ results. Granted, 33 (or 58% of the materiality assessments) have energy efficiency as a material topic and another 26 of them (or 46% of the materiality assessments) have GHG Emissions. But considering that two thirds of the publicly traded companies have not even done a materiality assessment, it is fair to say the depth of climate change strategies in the Mexican market is not great.


Only 25 publicly traded Mexican companies answer CDP’s Climate Questionnaire (you can see the list here), compared to the US where 72% of the S&P 500 answers the questionnaire, or Latin America where 123 companies also participate in answering it.

So, the bigger question is whether companies are not truly seeing climate change as a big enough risk, or whether they do recognize the risk but do not know what to do about it (or how to report it).

If the problem is not recognizing the magnitude of this risk, we recommend thinking of the following risk categories:


  1. Physical risks: the impact of exacerbated weather events, flooding, water scarcity, etc.
  2. Transition risks: changes in technologies, customer preferences, demographic moves triggered by the response to climate change. This is especially true when you have customers in Europe or even the US.
  3. Regulatory and legal risks: as regulators and organizations increase scrutiny around climate-related factors, companies may face legal action in the future if they are not correctly managing their climate impact.
  4. Economic risks: if energy prices change, which could impact a specific type of energy source (as a second derivative to the transition risks mentioned above), all businesses which require that type of energy will see an impact in their cost lines.
  5. Financial market risks: as investors (both debt and equity) will start to shy away from investing in companies who do not meet their sustainability agenda.


All these risks could negatively impact your industry, your supply chain, your customers, the communities around you, and your physical assets, among other things.

But it is not all bad news. There are also business opportunities that arise from climate change, and companies would benefit from also giving this some thought. Is your industry likely to face climate-related disruption? If so, are there any new business lines or products which may benefit from this?

As Jamie Dimon said in his latest letter to shareholders: “Climate change is a critical issue of our time… The challenge we face is significant. While continuing to generate power for all of our needs, big and small — lighting and heating our homes, commuting to work, and charging our phones and computers, as well as operating manufacturing facilities that produce goods used around the world each day — we also need to bring energy to the nearly 800 million people who still don’t have reliable access to electricity. And we need to find a way to do all of these things while setting a path for achieving net-zero emissions by 2050.”

It has been decades since notions of climate risks and opportunities started to be discussed, and the level of this conversation has only increased in the past few years (and is set to increase more in coming years). It is time for everyone to really give this some deep thought.


I hope you found this interesting. As usual, if there is anything we can help you with, please reach out.



CEO, Miranda ESG

Contacts at Miranda Partners

Damian Fraser
Miranda Partners

Marimar Torreblanca
Miranda ESG