Mexico and the Paris Agreement

Hope you are doing well. Welcome back to our brief thoughts on ESG.

Last week, the “Finanzas Sostenibles MX23” forum was held. During the event, it was discussed what is being done in the country to reach the Paris Agreement goals. In this week’s blog, we would like to share a brief recap.

In the public sector, the “Consejo Nacional de la Agenda 2030 para el Desarrollo Sostenible” was created in 2017. The SDGs in which the country could have an impact, as well as its commitments to comply with the 2030 Agenda and the ministries that would be part of the Council were identified in a document with 14 decrees. In 2022, the operating guidelines were published, detailing the issues that are most strongly promoted to date in Mexico:

1. Well-being: ending poverty, reducing economic inequality.
2. A just and equitable environmental transition: clean water and sanitation, sustainable cities, and communities by improving environmental infrastructure.
3. Economic reactivation: employment creation, fair labor conditions and formalization.
4. The promotion of equity and social justice: strengthening of the civil state.

In the private sector, investors are increasingly joining this transition and asking companies to have more sustainable corporate practices. The creation of financial instruments with favorable conditions, as well as the redirection of resources toward more transparent and holistic projects, has increased the weight given to ESG compliance.

How will these sectors come together?

The first edition of the Tax Ministry’s Taxonomy (Taxonomía Sostenible de México) was published this year (2023). Its goal is to identify, mobilize, and redirect public and private capital flows to sustainable actions that will bring the country closer to being able to allocate between 6.8% and 8.0% of GDP towards meeting the SDGs by 2030.

A taxonomy, by definition, refers to organizing and structuring information, data, or concepts in a systematic way. This should ease the search, recovery, and understanding of information, producing comparable information across industries.

What should you do?

Understand the Taxonomy. The SHCP published a free virtual training course with content tailored to the different users. As regulators continue to design and evaluate potential ESG measures, your company will be better prepared to respond the more you understand what is already in place.

There is still a long way to go in Mexico to have a system that is well-aligned with the Paris Agreement, but every step in the right direction will help.

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 ES