Cambios en las divulgaciones relacionadas con el clima y la sostenibilidad en América Latina - Shifts in Latin American climate and sustainability-related disclosures
Isabelle Guerrero is an Intern Analyst at Canbury, with expertise in international relations and social policy in Latin America. She has achieved Distinctions in her BA of International Relations at King’s College London.
Isabelle Guerrero is a trainee analyst at Canbury, with experience in international relations and social policy in Latin America. She earned distinctions for her BA in International Relations from King’s College London.
Latin American governments are improving climate change measures, aligned with international reporting standards. These moves are driven by the region, which is experiencing its hottest year on record, marked by exacerbated droughts and extreme weather conditions.
Taxonomies
This shift is evident in the implementation of green taxonomies across the region. Green taxonomy frameworks have already been implemented in Mexico and Colombia, while Argentina, Brazil, Chile, Panama, Peru, and the Dominican Republic are in the process of developing their own .
Although both Mexico’s and Colombia’s taxonomy are not intended for regulatory purposes, they align with the Paris Agreement’s 1.5°C trajectory and the country’s Nationally Determined Contributions (NDCs), setting a precedent for developing sustainable policies.
Given their leadership in taxonomy work, Mexico and Colombia are good case studies for understanding current regional and national movements related to climate and sustainability disclosure regulations.
Mexico’s commitment to sustainable investment
Mexico, Latin America’s second-largest economy, saw an increase in social and environmental policies targeting inequality and sustainability under the last six years of leftist President Andrés Manuel López Obrador (AMLO).
In September 2023, Mexico adopted a strategy to align its financial markets with international climate agreements. This led to a decree in December 2023 requiring the Ministry of Finance to issue provisions within one year to promote sustainable development, strengthen corporate governance, improve market practices, and promote gender equality in the securities market.
These new policies will revitalize the current sustainability policies in the financial sector, which currently require two key reports:
- Companies listed on the Mexican Stock Exchange (BMV) must submit annual sustainability reports that cover environmental, social, and governance (ESG) factors, climate change strategies, and greenhouse gas emissions data.
- The National Banking and Securities Commission (CNBV) requires publicly traded financial institutions to disclose climate-related risks in their annual reports.
On the social front, Mexico has reformed and expanded its pension system, becoming one of the fastest-growing pension fund markets in the world. This growth amplifies the need for robust sustainability disclosure requirements. Pension funds, with their long-term focus, prioritize ESG factors and drive demand for sustainability reporting as they grow. Therefore, Mexico must strengthen its disclosure standards to meet the needs of this growing investor base and promote responsible investment.
This push for sustainability is expected to continue with Claudia Sheinbaum’s upcoming presidency. Sheinbaum, a climatologist and former environment secretary for Mexico City, as well as a collaborator with the UN’s International Panel on Climate Change (IPCC), has promised greater environmental considerations in her program. She has already committed to investing more than $13 billion in Mexico’s transition to clean energy.
Colombia’s ecological leadership
At the same time, Colombia, host of the United Nations COP16 on Biodiversity, has emerged as a regional leader in sustainability and green policies.
This was evident in 2021, when it implemented green bonds for the first time in the region, with the support of the World Bank Group. This initiative is part of the “Greening the Colombian Financial System” program overseen by the Colombian Financial Superintendency (SFC). The program targets the Colombian financial sector through the implementation of a climate action plan, increased regulations on the financial sector, primarily banks and investors, and the implementation of a climate risk stress test.
This program has guided the SFC’s actions in recent years. As a result, the SFC has published best practices for risk management, governance, and disclosure in the banking sector, and issued decrees on ESG and climate risk disclosure for institutional investors.
Existing climate reporting requirements include:
- El artículo 5.2.4.1.2 del Decreto 151 de 2021 que obliga a “informar sobre los aspectos ESG que sean relevantes para cualquier inversor. Además, el decreto exige que los informes y divulgaciones consideren los riesgos provocados por los cambios en los criterios ESG. Este enfoque se inspiró en gran medida en el enfoque TCFD.
- Circular 008 de 2022 aplicable a los emisores de bonos vinculados a la sostenibilidad, que regula la divulgación mínima sobre los objetivos de desempeño sostenible.
Los acontecimientos recientes en Colombia y México han creado un entorno favorable para la expansión de las regulaciones de divulgación climática y de sostenibilidad. Los gobiernos que implementan mayores consideraciones ambientales y sociales en sus programas, tal vez vinculadas a la marea rosa, la publicación de taxonomías, la adopción temprana en Colombia de prácticas de divulgación similares a las del TCFD y el creciente enfoque en cuestiones ambientales y sociales, han establecido las bases para el progreso. Además, el aumento de la demanda por parte de las empresas e inversores internacionales de normas de información sólidas está impulsando el cambio. Estos factores combinados proporcionan una base sólida para el crecimiento de las regulaciones de divulgación relacionadas con el clima y la sostenibilidad en ambos países, lo que indica un cambio hacia prácticas comerciales más transparentes y responsables en la región.
¿Cómo puede Canbury ayudarlo a navegar por las regulaciones de divulgación?
La adopción temprana de normas climáticas y sostenibles genera costos para las empresas que no cuentan con una estrategia desarrollada. En Canbury, minimizamos estos costes proporcionando servicios de consultoría para agilizar los informes climáticos para las empresas. Nuestras herramientas de IA desarrolladas internamente minimizan los costes y errores humanos, posicionando a las empresas como líderes en informes de sostenibilidad y clima. Nos asociamos con Acrux Partners, consultora de sostenibilidad con sede en Argentina, para brindar servicios a nuestros clientes de América Latina.
Para obtener más información sobre el desarrollo de una estrategia de informes climáticos para su empresa, póngase en contacto con nosotros en info@canbury.io.
Latin American governments are enhancing climate change measures, aligned with international reporting standards. These movements are propelled by the region knowing its hottest year on record, marked by exacerbated droughts and extreme weather conditions.
Taxononomies
This shift is visible by the implementation of green taxonomies around the region.
In Mexico and Colombia, the green taxonomy frameworks have already been implemented, whilst Argentina, Brazil, Chile, Dominican Republic, Panama, and Peru are in the process of developing their own.
Although both Mexico and Colombia’s taxonomy do not have regulatory purposes, they align with the Paris Agreement 1.5°C trajectory and the countries National Determined Contributions (NDC), setting a precedent for the development of sustainable policies.
Because of their leadership in taxonomy work, Mexico and Colombia are the best case studies to understand regional and national movements concerning climate and sustainability-related disclosure regulations today.
Mexico’s Sustainable Investing Commitment
Mexico, Latin America’s second-largest economy, saw, under the last sexxenium of left-wing president Andrés Manuel López Obrador (AMLO), increasing social and environmental policies targeting inequality and sustainability.
In September 2023, Mexico adopted a strategy to align its financial markets with international climate agreements. This led to a decree in December 2023 requiring the Ministry of Finance to issue provisions within a year to promote sustainable development, strengthen corporate governance, improve market practices, and advance gender equality in the securities market.
These new policies will reinvigorate the current sustainability policies in the finance sector, which currently mandate two key reports:
- Companies listed on the Mexican Stock Exchange (BMV) must submit annual sustainability reports covering environmental, social, and governance (ESG) factors, climate change strategies, and greenhouse gas emissions data.
- The Mexican Banking and Securities Commission (CNBV) requires listed financial institutions to disclose climate-related risks in their annual reports.
On the social side, Mexico has reformed and expanded its pension system, becoming one of the world’s fastest-growing pension fund markets. This growth amplifies the need for robust sustainability-disclosure requirements. Pension funds, with their long-term focus, prioritise ESG factors and drive demand for sustainability reporting as they grow. Mexico must therefore strengthen its disclosure standards to meet the needs of this expanding investor base and promote responsible investing.
This momentum for sustainability is expected to continue with the forthcoming presidency of Claudia Sheinbaum, AMLO’s protégée. Sheinbaum, a climate scientist and former Minister of the Environment for Mexico City, as well as a collaborator on the UN International Panel on Climate Change (IPCC), has promised greater environmental considerations in her programme. She has already committed to investing more than USD 13 billion in Mexico’s transition to clean energy.
Colombia’s Ecological Leadership
Concurrently, Colombia, the host of the UN COP16 on Biodiversity, has emerged as a regional leader in sustainability and ecological policy advancements.
This was highlighted in 2021, when it implemented green bonds for the first time in the region, with the support of the World Bank. This initiative is part of the “Greening the Colombian Financial System” program supervised by the Financial Superintendence of Colombia (SFC). The program targets the Colombian financial sector by instituting a climate action plan, increasing regulations on the financial sector, mostly banks and investors, and conducting a climate risk stress test.
This program has guided the SFC’s actions in recent years. As a result, the SFC has published best practices for risk management, governance, and disclosure in the banking sector, and issued decrees on ESG and climate risk disclosure for institutional investors.
Existing climate reporting requirements include:
- Article 5.2.4.1.2 of Decree 151 of 2021which mandates “the reporting of ESG aspects that would be material for any investors. Furthermore, the decree demands reports and disclosures to consider risks brought about by changes in ESG criteria. This approach was heavily inspired by the TCFD approach.
- Circular 008 of 2022 applicable to sustainability-linked bond issuers, regulating the minimum disclosure on sustainable performance objectives.
Recent developments in Colombia and Mexico have created a favorable environment for the expansion of climate and sustainability disclosure regulations. Governments implementing greater environmental and social considerations into their programs – perhaps linked to the pink tide, the publication of taxonomies, Colombia’s early adoption of TCFD-like disclosure practices, and the growing focus on environmental and social issues, have set the stage for progress. Additionally, increased demand from international firms and investors for robust reporting standards is driving change. These factors combined provide a strong foundation for the growth of climate and sustainability-related disclosure regulations in both countries, signaling a shift towards more transparent and responsible business practices in the region.
How can Canbury help you navigate disclosure regulations?
Early adoption of climate and sustainable standards often incurs costs for companies without a developed strategy. At Canbury, we minimize these costs by providing consulting services to streamline climate reporting for firms. Our in-house developed AI tools minimize human costs and errors, positioning companies as leaders in sustainability and climate reporting. We partner with Acrux Partners, Argentinian-based sustainability consultancy, to deliver services to our LATAM clients.
For more information on developing a climate reporting strategy for your firm, please contact us at info@canbury.io .