Sustainability disclosure obligations for issuers in Mexico
Oscar Vázquez
Chevez Ruiz Zamarripa, Mexico City
Mariana Chavarria Juarez
Chevez Ruiz Zamarripa, Mexico City
Alan Israel Tapia Coria
Chevez Ruiz Zamarripa, Mexico City
Introduction
In recent times, sustainability has evolved from the realm of voluntary corporate practices to being a mandatory element of financial and regulatory reporting. This type of disclosure obligation began as aspirational guidelines and non-binding frameworks, commonly referred to as soft law, and are now becoming enforceable obligations set out in hard law. This shift is reshaping how market participants, particularly securities issuers, approach environmental, social and governance (ESG) disclosures.
Mexico is no exception to this global trend. The Mexican authorities have mandated sustainability reporting by businesses. Recently published regulations applicable to securities issuers mark a pivotal moment in this regulatory shift: as of 2026, sustainability reports will be mandatory and will also require external assurance.
This article outlines the key changes to Mexico’s legal framework on sustainability disclosures, the implications of the country’s alignment with global standards, such as the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 standards, and the practical considerations Mexican issuers must address in order to achieve effective implementation.
The new disclosure obligations for securities issuers
On 28 January 2025, the resolution that modifies the General Provisions applicable to issuers of securities and other participants in the securities market (Resolución que modifica las Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes del mercado de valores) (the provisions and the Decree, respectively) was published in the Official Journal of the Mexican Federation (Diario Oficial de la Federación or DOF). The Decree sets out, among other rules, the obligation that issuers prepare an annual sustainability report aligned with the IFRS Sustainability Disclosure Standards (the IFRS S), issued by the ISSB, in particular IFRS S1 and IFRS S2, which is mandatory as of 2026 for fiscal year 2025. This annual sustainability report must be submitted separately from the business’s financial statements, following the IFRS S standards. Pursuant to the amended provisions, the sustainability information to be submitted in 2026 with respect to the fiscal year 2025 must not be assured by an external auditor, while for fiscal year 2026, it will be mandatory for such information to have a certain limited amount of assurance provided by an external auditor and, starting in 2027, such information must have reasonable assurance by an external auditor.
The purpose of the foregoing is to provide investors with better tools for decision-making and to promote sustainability, transparency and long-term strategies in regard to issuers’ activities, improve risk management, support the growth of the Mexican stock market and align the country in terms of reporting with international standards.
The ISSB’s Sustainability Disclosure Standards
The ISSB was created in 2021 to develop sustainability standards that meet the information needed for decision-making, considering the risks and opportunities presented by a company’s interactions with its stakeholders, society, the economy and the environment, across different time scales. The ISSB’s goal is to provide reliable, comparable and useful disclosure standards in regard to decision-making through the use of a transparent and rigorous process. In June 2023, the ISSB issued IFRS S1 and IFRS S2, which are focused on four areas, namely governance, strategy, risk management and metrics and objectives, consistent with the requirements of the Task Force on Climate-Related Financial Disclosures and building on other related frameworks (ie, on climate-related financial disclosures).
IFRS S1: general requirements for financial information disclosures related to sustainability
IFRS S1 requires that entities disclose sustainability-related risks and opportunities relevant to their financial decision-making. These disclosures reflect how the company’s interactions with stakeholders, the economy and the environment affect cash flows, financing and capital costs over time. Entities must report on:
- governance, namely how risks and opportunities are overseen and managed;
- strategy, namely the entity’s approach to addressing sustainability risks and opportunities;
- risk management, namely how such risks are identified, assessed and monitored; and
- metrics and targets, namely performance indicators and the progress made towards defined goals.
The standard also provides guidance on identifying and reassessing material ESG risks across the value chain.
IFRS S2: climate-related disclosures
IFRS S2 builds on IFRS S1 and focuses specifically on climate-related risks, both physical and transition-related, and the opportunities they present. It requires entities to disclose how these factors impact their operations and financial outlook, as follows:
- governance, namely related to the oversight and management of climate-related issues;
- strategy, namely how the entity addresses climate risks and opportunities;
- risk management, namely how climate risks are identified and integrated into broader risk management frameworks; and
- metrics and targets, namely the firm’s performance and progress made towards climate-related goals. Entities must report on key indicators, including:
- greenhouse gas emissions (Scopes 1 and 2, and Scope 3 if material),
- climate transition risks and physical hazards,
- capital allocations to climate strategies,
- internal carbon pricing, and
- executive compensation tied to climate objectives.
Finally, the Decree provides the following key points:
- the provisions define ‘sustainability information’ as information about the risks and opportunities faced by the issuer that could reasonably be expected to affect its cash flows, access to financing or cost of capital in the short, medium or long term, and will include information about the governance, strategy and management of such risks and opportunities, as well as related metrics and objectives;
- all securities registration applications must include the sustainability report;
- issuers must provide annually to the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores), to the stock exchanges where it is listed and to the public, the report containing sustainability information, no later than the third business day after the annual general shareholders’ meeting is held. For trust securities, restricted offerings or development certificates that relate to investments of at least 70 per cent in unlisted collective investment mechanisms, the deadline is 30 June;
- foreign issuers must submit reports in accordance with IFRS S1 and S2, or with the equivalent standards in their home jurisdiction, provided their compatibility with the IFRS is explained; and
- the relevant sustainability reports must have limited assurance in 2026 and reasonable assurance from an external auditor as of 2027.
Our recommendations
In light of the Decree’s applicability, starting in 2026, issuers with securities registered by the National Securities Registry (Registro Nacional de Valores) should take the following steps to ensure compliance and strengthen their sustainability practices within Mexico’s evolving regulatory framework:
- review their existing sustainability policies, criteria, internal controls and other administrative actions;
- identify key ESG risks and indicators and assess their impact on short-, medium- and long-term cash flows;
- evaluate the internal and external teams responsible for regulatory compliance; and
- develop and implement a strategy for data generation, timeline management and report preparation in line with the provisions.