Mexico’s route to sustainability


Mexico’s route to sustainability Ethical BoardroomBy Sofia Solley, Head of Finance at Anahuac University and member of Mexico’s Center of Excellence in Corporate Governance


We understand corporate governance to be the guidelines and structure of a company that enables business goals to be fulfilled in a manner that adds value while at the same time keeping in mind the best interests of all shareholders. In the last 10 years, Mexico has been witness to a growing and richer corporate governance culture and companies have seen the benefits and profits of its application. But is it enough?

Investors and key stakeholders increasingly demand that organisations implement environmental, social and governance (ESG) programmes in their core strategy and operations and, moreover, they demand transparency and disclosure from these ESG practices.

In light of these national and global trends, the Mexican Stock Exchange (BMV) created a sustainability index integrated by the best ESG-rated companies (32 out of 111 Mexican companies). The rating methodology was developed by the Anahuac University, which collects and analyses information related to corporate governance, social responsibility and environmental issues of listed companies on the BMV.

What we are looking for…

Successful sustainability and corporate responsibility programmes do great things for their organisations and all stakeholders. Companies that want to embrace sustainability practices should aim to have governance structures that adequately support the vision of implementing social responsibility and environmental initiatives within organisations. In order to achieve this, establishing a governance structure to operate sustainability and corporate responsibility programmes is essential.

Mexico’s sustainability index focusses on three principles and a company must ensure that there is a timely and accurate disclosure of all matters relating to these principles in order to assure accountability and transparency to investors.

The first rated principle is the corporate governance framework, which should protect and facilitate the exercise of ownership and stakeholder rights and equal treatment of all shareholders. The firm must be strategically oriented by the board, which should effectively control executives and management and it should always encourage the communication of all relevant information, including conflicts of interest.

Second, social responsibility is measured by how the company commits to values and human rights. The objective selection of values is fundamental for the transcendence of any firm but the core pillar of any organisation is its collaborators and therefore we encourage companies to incentivise, train, educate and care for all working personnel they hire. Plus, they should take into account the characteristics of the society that surrounds them and be aware  of the positive and negative externalities their operations may derive from.

Last but not least, the organisation should show a formal commitment to environmental care matters. Management strategies should contribute to achieving environmental goals and the board should actively monitor them.

What the evidence tells us…

After five years of rating listed companies of all different sectors in Mexico, we have experienced a constant improvement regarding ESG implementation and reporting. It seems that now, more than ever, companies understand the importance of sustainability and governance matters with practitioners designated to transform an organisation by minimising negative impact while maximising value for stakeholders.

Mexico has a rich history of family businesses for which changing their board structure might be difficult. But as time has evolved, we have seen how the percentage of independent board members has increased and how now very few companies select their CEO as their board chairperson.

Furthermore, many companies who did not report anything regarding environmental and social responsibility now release comprehensive sustainability reports in both Spanish and English.

In the chart below we can appreciate the percentage of best practices achievement from 2010 to 2015 divided by industry sector. The improvement has been remarkable and of great impact in growth and profit for both companies and investors.

Mexico’s route to sustainability Ethical Boardroom

The rewards…

According to the UN’s Principles for Responsible Investment, ‘responsible investment is driven by a growing recognition in the financial community that effective research, analysis and evaluation of ESG issues is a fundamental part of assessing the value and performance of an investment over the medium and longer term’.

Proof of this is the steadfast upward behaviour that international sustainability indexes have had in recent years. As we can see in the graphic (below), Mexico’s Sustainability Index has followed the same global trend, presenting even higher returns than average in the last thee years.

Mexico’s route to sustainability Ethical Boardroom

It has been these results that have motivated companies to increasingly immerse themselves in social responsibility, environment and corporate governance. Boards have now taken a more active role in the development of their organisation’s strategies and values related to ESG.

Our purpose…

We believe there is no better way to encourage organisations and investors to continue down this road than experiencing actual results and returns for themselves. The improvement and enthusiasm companies have shown is outstanding, but there is still a long way to go.

As a crucial entity in financial education, the Anahuac University, along with the BMV, is committed to remain on this journey. Our goal is to encourage all listed companies to follow the corporate actions taken by the ones selected for the sustainability index.

Looking forward, we make it our purpose to infuse smaller family businesses in Mexico with corporate governance and sustainability education. This will promote their growth and stimulate them to become public companies, inducing capital markets and the economy of Mexico to grow.

About the Author:

Sofia Solley is Head of Finance at Anahuac University and member of Mexico’s Center of Excellence in Corporate Governance (CEGC). As a member, she led the project for developing CEGC’s Corporate Governance Best Practices and Stock Market Incorporation Practical Guide which was published in 2010 to encourage Mexican companies to become public and boost capital markets in Mexico.

Sofia spent several years in GBM (Grupo Bursátil Mexicano) managing and optimizing clients’ portfolios in Private Banking. This experience, along with her Masters in Finance, led her to develop the curriculum for the Financial Management Degree at Anahuac University. Apart from her regular responsibilities as Head of Finance and leading professor, she is responsible for rating eligible companies in corporate governance, social responsibility and environment for the Mexican Stock Exchange Sustainability Index. You can contact her at