How can Mexico's sustainable taxonomy drive impact investment in the country?

Last March marked a significant breakthrough for Mexico in terms of green investment. The "Mexican Sustainable Taxonomy" was presented, which focuses on the financing criteria that classify economic activities with respect to their contribution to climate change mitigation and adaptation. The taxonomy not only sets rules and limits, but also provides a framework of trust for investors to recognize sustainable businesses and contribute to the nation's transformation toward a greener future (IASE Mexico, 2023).

The objective was to unify a single science-based rating system to identify sustainable practices. This system will facilitate access to information in a user-friendly manner and will also help identify, denounce, and reduce greenwashing. This will help investors invest in projects that positively impact the environment. However, it also includes gender equality and access to basic services in cities as part of its objectives (Secretaría de Hacienda y Crédito Público (SHCP), 2023).

Considering the objectives of this taxonomy, Mexico opens the door to expanding its market for impact investments. This is relevant as this sector is growing rapidly, mainly in Europe and the United States. Impact investing emerges within the ESG segment and focuses on investments that produce positive social and environmental effects with verifiable financial returns (Deloitte, 2021). Perhaps some of the challenges of impact investing are finding countries with stable financial regulations and reliable green taxonomies.

With this new taxonomy, Mexico can position itself on the international radar as a player that provides certainty and confidence in impacting investments through a regulated system. Impact investments would help a country achieve sustainable economic growth. There are very large sectors in the Mexican industry that would benefit from this type of investment. For example, the agricultural sector and ecotourism. This would also attract a new type of socially conscious investor to the country.

This move to regulate green finance adds to the wave of nearshoring that is currently taking place in Mexico and also helps diversify the financial system and economic activities. There are many opportunities for impact investments in Latin America's second-largest economy due to its economic sectors, ample natural resources, and vast territory.

In addition to other factors such as a stable central bank, a regulated financial sector, and a currency that remains low in volatility, among others, these are some of the reasons why impact investments should be made. Therefore, if you plan to make impact investments, it would be relevant to consider Mexico as a reliable country. If you make that decision, Mexpando can help you connect with the right contacts and assist you with the process.

Deloitte. (2021). Desmitificando las inversiones de impacto. 18.

IASE Mexico. (20. April 2023). Una taxonomía sostenible mexicana. Youtube. Von https://www.youtube.com/watch?v=lAMo_5zKAHI abgerufen

Lendo, E. (March 2023). Taxonomia Sostenible. Reforma.

Madry, K. (15. June 2022). Mexican financial system stable but global risks weigh -central bank. Reuters.

Secretaría de Hacienda y Crédito Público (SHCP). (2023). Taxonomia Sostenible de Mexico. CDMX: Primera Edicion.