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Mexico: ESG Development in the Public Equity Market – 2021

This week we are sharing our annual update of the Mexico: ESG Development in the Public Equity Market report, covering the 2021 reporting season data for publicly listed companies in Mexico. There is lots of interesting data in the report, so we recommend reading all of it. But for those of you who want the key highlights, here you go:

Executive Summary

  • We are sharing the annual update of our ESG Development Heatmaps, where we analyze where public companies in Mexico currently stand for both ESG strategy development and ESG communication efforts. These heatmaps can also help to compare companies with their industry peers and even with companies in other sectors (as they focus on the process and not on different exposures to different ESG topics which are inherent to different industries).
  • All sectors in the Mexican market made progress on their ESG strategies and communication efforts during 2021, but we still see a lot of room for improvement in ESG Development in the overall Mexican market.
  • There was a big increase in the adoption of SASB indicators in the 2021 reporting cycle. 40% of the sustainability reports in Mexico now include SASB (vs. 10% in 2020).
  • We reiterate that some companies that tick a lot of ESG boxes are not necessarily implementing ESG effectively into their day-to-day operations, and other companies that do not tick such boxes, may in fact be doing great ESG things, but keeping it to themselves. However, by focusing on the development of their public ESG strategies and communication processes, we believe we can find interesting data on who has made a real effort to institutionally establish a sustainability practice.
  • Based on our heatmaps, the most ESG-mature sectors in Mexico are Metals & Mining (for the second year in a row) and Transportation. The least ESG-mature sector in Mexico is Commercial Services Supplies.
  • We believe recent progress in the market, coupled with AFOREs integrating ESG more actively this year into the investment process, should incentivize companies who are still undecided on ESG to start developing a strategy. The exception may be in companies that despite being listed in a stock exchange are not that dependent on investors (that will maybe be delisted at some point) and are still not recognizing the benefits of broadening risk management to cover sustainability topics. We would expect these companies to be a minority in the market over the next 5 years.
  • It is easy to understand why larger companies (with more resources, larger teams) usually rank higher than smaller companies within the same industry, but ESG strategies can be tailored to different budgets. Smaller companies should not shy away from ESG just because of constrained resources.

I hope you find the report interesting and do let us know if you have any questions or comments on it. An 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