From compliance to strategy: the challenge of corporate sustainability in Mexico

DAVID F. DELGADO S. | EGADE BUSINESS SCHOOL

Among the Mexican companies analyzed in the study Integrated Corporate Sustainability Strategies in LATAM and Mexico, 43% show a primarily normative approach to sustainability, compared with 24% that achieve strategic integration.

Esteban Koberg, director of the Master in Sustainable Business at EGADE Business School of Tecnológico de Monterrey, is a co-author of the research, which received support from the Association of American Chambers of Commerce in Latin America and the Caribbean (AACCLA) of the U.S. Chamber of Commerce.

Koberg presented the findings on August 14 in Mexico City during an event held at Siemens in collaboration with the American Chamber of Commerce of Mexico (AmCham). The gathering brought together experts from academia and the industrial, financial and business sectors to discuss how to move sustainability beyond regulatory compliance and integrate it into business strategy.

The event was opened by Bárbara Durán Magnère, regional director for Mexico City and Querétaro at EGADE Business School, who introduced the presentation of the findings and a panel discussion on how to move sustainability beyond regulatory compliance and turn it into a business decision.

Four approaches to corporate sustainability: normative, cautious, tactical and strategic

The study classifies companies along two dimensions: the institutionalization of sustainability —its incorporation into policies, governance, responsibilities and internal processes— and openness to the external environment, understood as engagement with customers, suppliers, investors, communities and other stakeholders.

Among the Mexican companies analyzed, 43% show a normative approach, with greater internal institutionalization but less openness to the external environment; 19% show a prudent approach, with limited levels in both dimensions; and 14% show a tactical approach, with greater external engagement but less internal integration.

The remaining 24% achieve a strategic approach by combining greater integration of sustainability into management, culture and operations with a more open relationship with their stakeholders.

The research gathered responses from 355 companies in 11 countries associated with AmChams in Central and South America. In Mexico, the results correspond to 19 companies in the sample, so they describe that group rather than the country's business sector as a whole.

For Koberg, the difference lies in moving away from treating sustainability as an obligation separate from the business and connecting it with the organization's core decisions.

“Is sustainability a cost or an investment? To the extent that it is approached more strategically, it is an investment,” he said.

Koberg also highlighted the “gaps that we still have at the governance and senior-management levels”, which can leave sustainability confined to policies or specialized teams without fully incorporating it into strategic decisions, resource allocation and risk management.

From compliance to strategy: how to integrate sustainability into the business

Among its recommendations for Mexico, the study calls for moving from compliance to strategy by connecting sustainability with innovation, risk management and decision-making to anticipate risks, identify efficiencies and guide long-term investment.

It also recommends increasing companies' openness to their external environment, strengthening relationships with stakeholders, and improving regulatory, reporting and disclosure conditions to generate useful information for decision-making.

During the panel, Gerardo Pérez Lechuga, director of Innovation, Digitalization and New Technologies at Siemens Mexico, Central America and the Caribbean, agreed that meeting requirements does not mean sustainability has been integrated into the business model.

“Few have truly integrated this into their DNA,” he said.

He added that technologies such as artificial intelligence and digital twins already make it possible to simulate scenarios, optimize operations and reduce impacts, which means the challenge is also cultural.

“All the technologies are already there. What is needed is a change in culture,” he said.

The cost of inaction: sustainability, investment and financing

From a financial perspective, Mariuz Calvet, Chief Sustainability Officer at Santander Mexico and president of the Sustainability Commission of the Mexican Banking Association, said that one of the main obstacles remains short-term thinking.

“As long as companies do not put a number on the cost of inaction in the face of major challenges, the lack of long-term thinking will remain a major barrier,” she said.

Calvet added that sustainable financing requires turning environmental and social objectives into measurable, financially sound projects.

“Being sustainable does not automatically mean being bankable. Bring it to me with metrics, with all the risk structures, so I can understand them,” she said.

Technology and collaboration to accelerate corporate sustainability

Mauricio Alvarado, Country Manager at Dow and vice president of AmCham's Sustainability and Social Responsibility Committee, said sustainability must be integrated into how companies operate rather than treated as a parallel initiative.

“For us, sustainability is an essential part of the business; it is the engine of the business,” he said.

He also emphasized that progress requires collaboration among companies, government, academia and other participants across value chains, since many impacts extend beyond an organization's direct operations.

“Sustainability cannot be achieved in isolation; that is why collaboration is key,” he said.

The discussion was moderated by Christiane Molina, associate professor in the Department of Strategy and Leadership at EGADE Business School, and provided an opportunity to contrast the research findings with perspectives from the financial, industrial and technology sectors.

Taken together, the study and the discussion suggest that advancing toward strategic sustainability requires integrating it into decision-making, measuring the associated risks and opportunities, and strengthening collaboration with the different actors in the business environment.