Mexico has taken a landmark step in corporate transparency and sustainable finance. In January 2025, the country amended its General Provisions to establish mandatory annual sustainability reporting obligations for securities issuers and other securities market participants. This reform positions Mexico as the first country in North America to mandate the International Sustainability Standards Board (ISSB) disclosure standards developed under the International Financial Reporting Standards (IFRS) Foundation, specifically IFRS S1 and IFRS S2, signaling a decisive shift toward globally aligned sustainability transparency.
The new framework requires publicly listed companies to disclose sustainability-related risks and opportunities that could affect cash flows, access to financing, or cost of capital over the short, medium, and long term. These disclosures must address governance structures, strategic approaches to sustainability matters, risk management processes, and relevant metrics and targets. The objective is to facilitate capital flow toward investments that foster economic development through environmental and social sustainability, while enhancing transparency and supporting long-term value creation.
With the first reporting period covering fiscal year 2025 and disclosures due in 2026, companies face an accelerated timeline to build the necessary capabilities, governance structures, and data systems to meet these comprehensive requirements. External assurance requirements will phase in beginning in 2027, underscoring the need for investment-grade sustainability information and robust internal controls.
What This Means for Issuers
For listed companies, this marks a shift from voluntary narratives to investor-grade disclosure tied to governance, strategy, risk, and metrics, integrated with financial reporting cycles. Companies should expect increased scrutiny from regulators and investors and prioritize robust governance, internal controls, and data systems to meet filing and assurance expectations.
Key Features of Mexico’s Sustainability Reporting Requirements for Public Companies:
1. Scope and Applicability
Applies to all public companies with securities listed in Mexico, including foreign issuers operating locally. Government entities and financial institutions follow separate regulations.
2. Reporting Standards
Companies must publish a standalone sustainability report aligned with IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) issued by the ISSB, incorporating the principles of the Task Force on Climate-related Financial Disclosures. The regulation makes no modifications to the ISSB standards and does not extend the transition reliefs provided in IFRS S1 and S2.
3. Required Disclosures
Reports must cover sustainability-related risks and opportunities that could impact financial performance, including:
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- Governance structures and sustainability strategy
- Climate-related risks and transition plans
- GHG emissions (Scopes 1, 2, and material Scope 3)
- Metrics, targets, and performance against goals
4. Filing and Assurance Timeline
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- 2026: First reports due (covering FY 2025), no assurance required
- 2027: Limited assurance becomes mandatory
- 2028: Reasonable assurance (audit-level) required by accredited verifiers
5. Financial Integration
Sustainability information must be consistent and interconnected with financial disclosures, offering investors a comprehensive view of performance and risk.
6. Noncompliance
Noncompliance may result in fines, public notices, or restricted access to capital markets.
Turning New Standards Into Opportunity
Meeting Mexico’s new sustainability disclosure standards is more than a compliance exercise—it’s a strategic opportunity to strengthen investor confidence, enhance market access, and demonstrate leadership in transparency. Companies that act early will be best positioned to attract capital, manage risk, and differentiate in an evolving investment landscape.
What Mexican Public Companies Should Prioritize:
- Compliance Readiness: Evaluate existing sustainability practices, governance structures, and data systems against IFRS S1 and S2 requirements to identify gaps and priorities.
- Materiality Analysis: Identify sustainability-related risks and opportunities that could reasonably be expected to influence investors’ decisions or affect a company’s enterprise value over the short, medium, and long term.
- Climate Risk Screening & Assessment: Conduct a qualitative review of physical and transition climate risks across operations and value chain, evaluating their likely impact on business resilience and financial performance.
- Disclosure & Reporting Advisory: Provide guidance on sustainability reports aligned with IFRS S1 and S2, business priorities, and investor expectations.
- Implementation Support: Streamline collaboration among internal teams and external partners to ensure alignment, accuracy, and consistency in sustainability reporting.
ICR partners with public companies, across Mexico and globally, to help them navigate regulatory transitions, strengthen governance and reporting capabilities, and develop disclosures that meet regulatory expectations and reinforce market credibility.
ICR’s Governance & Shareholder Advisory team can support your company in preparing for Mexico’s new sustainability reporting requirements. Connect with us to learn more about how we can assess your IFRS S1 and S2 readiness.
Gabriel Hasson serves as Global Head of Governance & Shareholder Advisory at ICR, guiding companies through the intricacies of corporate governance, shareholder engagement, and capital markets strategy. Prior to joining ICR, Gabe was an Investment Stewardship Director at BlackRock, overseeing a portfolio of more than $400 billion in the U.S., Canada and Latin America, and held senior roles at Deloitte and ISS. Gabe currently serves on the Public Policy Committee of the International Corporate Governance Network (ICGN) and is an advisory board member of BH Compliance.
Dynara Eang is a Senior Vice President at ICR, with responsibilities spanning regulatory reporting compliance, corporate sustainability strategy, and shareholder engagement. She brings extensive advisory experience helping companies navigate evolving disclosure standards, integrate sustainability into business practices, and strengthen stakeholder trust through transparent communication.
