ESG Reporting Obligations Under Mexico's NIS Standard
Overview
In May 2024, the Mexican Council for Financial and Sustainability Reporting Standards (Consejo Mexicano de Normas de Información Financiera y Sostenibilidad, "CINIF") published Mexico's first Sustainability Reporting Standards (Normas de Información de Sostenibilidad, "NIS")—specifically NIS A-1 and NIS B-1.
These standards took effect on January 1, 2025, and state that entities preparing financial statements under Mexican Financial Reporting Standards (Normas de Información Financiera, "NIF") must include specified sustainability information—including greenhouse gas ("GHG") emissions—in their financial reports beginning with fiscal year 2025 (i.e., in reports issued in 2026).
What the NIS Requires
The NIS framework currently consists of two standards. NIS A-1, titled "Conceptual Framework of Sustainability Information Standards," establishes the conceptual basis for sustainability reporting under NIF, including definitions of relevance and materiality.
NIS B-1, titled "Basic Sustainability Indicators" (Indicadores Básicos de Sostenibilidad, "IBSO"), requires disclosure of 30 specific metrics covering environmental, social, and governance matters as supplementary notes to an entity's financial statements.
The relationship between the two standards reflects a phased implementation strategy adopted by CINIF: NIS B-1 represents the initial phase focusing on pre-identified metrics, while NIS A-1 provides the broader conceptual architecture that will guide future, more complex standards.
Who Must Comply
According to CINIF, entities that issue financial statements under the NIF must prepare and disclose sustainability information in the notes to their main financial statements, in accordance with the NIS, beginning with fiscal year 2025 (reported in 2026). The sustainability information must refer to the same economic entity that issues the basic financial statements and its notes.
No Materiality Assessment Required—Yet
At this initial stage, entities reporting under NIS are required to disclose only the 30 IBSO metrics in NIS B-1—no broader materiality assessment is required.
NIS A-1 previews that future standards may require reporting entities to disclose all sustainability information that is considered "material" (defined as information whose omission, misstatement, or concealment could reasonably be expected to influence users' decision-making), but NIS B-1 does not yet go that far.
The 30 IBSO Metrics
NIS B-1 identifies 30 key indicators that must be disclosed as supplementary notes to a reporting entity's financial statements. These indicators span three pillars:
(i) Environmental ("A" indicators): Scope 1, 2, and 3 greenhouse gas emissions; energy consumption; water inflow and optimization; ozone-depleting substances; hazardous and non-hazardous waste generation and optimization.
(ii) Social ("B" indicators): Gender pay equity, workforce composition, employment practices, and other social metrics.
(iii) Governance ("C" indicators): Governance policies, anticorruption practices, and the existence of independent supervisory bodies.
Each quantitative indicator must be reported with both its absolute value (the raw, unadjusted measurement—such as total emissions or water intake—expressed in physical or monetary units) and its relative value (an intensity metric that normalizes the figure against net revenues to show performance or efficiency, e.g., metric tons of CO₂e per monetary unit of output). Qualitative indicators (such as governance indicators C.4 through C.8) do not require absolute and relative values but instead require descriptive disclosure.
Universal Applicability
CINIF considers the IBSO "universally applicable" regardless of the economic sector to which an entity belongs, explaining that they are "those considered most useful for the generality of entities." The IBSO are based on the Guidance on Core Indicators ("GCI") developed by the United Nations Conference on Trade and Development ("UNCTAD"), which are considered "indispensable for evaluating the economic, environmental, social, and governance impacts of an entity."
Transitional Relief
NIS B-1 contains a transitional provision permitting entities to omit disclosure of Scope 3 GHG emissions (A.3) and Sustainable Investment (A.6) during the first year of application due to calculation complexity, provided they disclose this fact. This is the only explicit allowance for non-inclusion. The framework also allows entities to make estimates where direct measurement is not possible, provided they are based on "all reasonable and supported information that is available at the date of issuance of the sustainability information."
Audit Implications
The Mexican Institute of Public Accountants (Instituto Mexicano de Contadores Públicos, A.C., "IMCP") has clarified that sustainability information under NIS does not form part of the audit scope for financial statements. Where NIS disclosures are included in financial statement notes, they are treated as "other information" under auditing standards, meaning the auditor must read them for material inconsistencies but does not opine on them.
Future Developments
The regulatory landscape continues to evolve. Over the long-term, the NIS framework is expected to include additional standards to achieve full convergence with international frameworks such as the IFRS Sustainability Disclosure Standards.
The National Banking and Securities Commission has already required listed issuers to adopt IFRS Sustainability Disclosure Standards, and CINIF plans additional NIS standards specifying disclosures on risk management, strategy, and climate-related information, which will likely require a materiality assessment rather than relying on pre-determined metrics. Entities should monitor these developments closely.
