Driving Mexico’s Sustainable Transition with ESG Bonds

Thematic bonds and those linked to sustainability are attracting more and more interest among debt issuers in Latin America and the Caribbean (LAC). According to a post developed on the IDB Invest blog, in Mexico these bonds can be key to a sustainable transition in the financial sector and securities markets.

According to the article, in order to attract investors, the availability, transparency and quality of information before and during the term of the bond are key. Authors consider that it is necessary to have an action framework that influences the use of proceeds and objectives, and to have a second-party opinion to validate the ESG consideration. Additionally, these emissions must also be aligned with the ICMA principles.

IDB Invest and BIVA, the Institutional Stock Exchange of Mexico, are working to strengthen ESG capabilities in the Mexican and LAC markets, with tools such as the Green Bond Transparency Platform and the ESG Experience Platform.

The article concludes that, both in Mexico and in LAC in general, there is potential to attract more ESG issuers and investors, and this will become easier in the future as there is better information, clearer processes and skills development in the ESG field.