Mexico City, April 3 2025
As result of the increasing Environmental, Social and Governance («ESG») risks affecting various companies both in Mexico and abroad, ranging from weather phenomena such as hurricanes, to the scarcity of resources like water and other resources impacted by climate change and global warming and considering that these risks have a direct impact on people and communities affected by corporate activities (the «Corporate Responsibility of Companies» or «CSR») and that under the CSR, there is a growing recognition that companies must not only focus on their financial performance, but also act consciously and take measures to reduce their social impact, both internally with their employees and externally with their stakeholders. In that sense, it is essential to consider these factors when assessing the viability of projects in which the Mexican government contracts private companies for the development of such projects.
Therefore, there is currently a need to clearly understand these risks and how they affect companies in their operations. For this reason, the Mexican government seeks to establish regulations and protection processes that require companies to conduct an analysis of the ESG risks related to the services or products they offer, so that, once these risks are identified and understood, companies can implement control and mitigation plans that minimize potential disruptions and breaches of contracts entered into between the public sector and private entities.
In this regard, on March 19, 2025, an initiative was submitted to the Chamber of Deputies proposing a decree that reforms articles 23 and 26 of the Law on Procurement, Leasing and Services of the Public Sector (Ley de Adquisiciones, Arrendamientos y Servicios del Sector Público) in matters related to sustainability and gender equality.
The proposal aims to incorporate mechanisms that encourage the adoption of sustainable business practices and a substantive equality approach within public procurement processes.
The primary amendments include, among others, the following:
It is proposed to grant additional points and percentages in public bidding procedures to companies that:
- Implement voluntary environmental self-regulation processes, in terms of the General Law of Ecological Balance and Environmental Protection.
- Have applied gender equality policies and practices, in accordance with the corresponding certification issued by the competent authorities.
These measures are integrated into section V of Article 23 and the fifth paragraph of Article 26 of the Law, in the sections that outline the criteria for promoting favorable conditions in acquisitions, leases and service contracts.
The proposal seeks to facilitate the access for socially and environmentally responsible companies to government procurement processes, while simultaneously encouraging the transition toward business practices with greater social commitment. Although this is still a proposal, it clearly reflects that ESG factors are being actively analyzed by the government, and it is highly likely that companies will be required to act on these matters in order to remain relevant in the market.
Our Firm´s ESG and Regulatory teams possess the necessary expertise and knowledge to assist our clients in understanding these developments and in implementing policies that address these obligations, thereby enhancing their competitiveness in the bidding processes.
Sincerely,
Juan José López de Silanes
lopez_de_silanes@basham.com.mx
Gerson Vaca
Diana Rangel
