Mexico is highly exposed to climate and environment risks, and climate change could generate even further economic and financial risks. This report presents the results of the first in-depth consultation with Mexican financial institutions on their environmental risk management practices, and on how these are included in mainstream risk strategies, as well as on how financial institutions can capitalize on opportunities that result from the transition to a low-carbon economy. This diagnosis is expected to raise awareness at the senior level on the underpinning risks they face and the opportunities from climate and environmental impacts, in the context of international discussions about the fiduciary duty of financial organizations.
The report is structured in three main chapters, covering governance, strategy and risk management practices. All three chapters include a set of drivers, challenges and recommendations to better align financial flows to the development of an environmental and socially responsible agenda, and a low-carbon economy. It concludes with a concise list of recommendations for financial institutions and regulators on the areas of governance, risk strategy and risk management, including:
It also provides further general recommendations, and areas for future investigation.