What are the top 3 developments in your territory concerning green claims and the associated risk of greenwashing?
Mexico is a country that has lagged behind in environmental issues. This is due to the fact that to date there are no rigorous laws and sanctions that are strong enough for those who do not comply with environmental legislation. However, a trend has been developing at the legal level and on the part of the private initiative that allows us to note the interest in improving the normative bodies and the sanctioning practices in environmental matters, some of them are discussed below.
1. A need for stricter guidelines for organic and sustainable products
Currently, there is no specific regulatory framework in Mexico that regulates or sanctions greenwashing. However, in recent years, the Official Mexican Standards (hereinafter “OMS”) related to organic and sustainable products have increased. A trend has been identified to establish stricter guidelines for these products.
Under the Federal Law of Metrology and Standardization, products or services must comply with the OMS dispositions. In case such products do not satisfy the corresponding specifications, the competent authority will prohibit their commercialization until they comply with them. The law also provides monetary penalties to whoever is responsible for non-compliance with the standards. However, such consequences are not enough to ensure the compliance of the OMS´s. That is the reason for the need to implement a stricter system for compliance.
These OMS establish the criteria and requirements that organic and sustainable products must have to be labeled as such. One of the requirements foreseen in the OMS for ecological product labeling is that these products must be produced in a responsible and environmentally friendly manner, they must indicate their reduced environmental impact and the use of more sustainable materials and processes.
However, compliance with these OMS has been a challenge for companies as is requires significant investments in both technology and more sustainable processes. This can be an opportunity for companies to improve their image and reputation and access new markets and business opportunities.
In recent years, the increase of OMS related to this issue has been creating an ecosystem that reflects a positive trend in the Mexican market towards responsible consumption and sustainability in Mexico, pointing out that the effectiveness of these OMS´s depends on the government's ability to enforce the regulations and consumer education.
2. Self-regulatory standards
Also, the private sector has implemented self-regulatory standards and recommendations such as the ESR (Socially Responsible Company) label, which is a process to measure the development of corporate social responsibility. This distinction certifies that a company is committed to the implementation and continuous improvement of socially responsible management as part of its culture and business strategy, which implies the elimination of greenwashing practices within the company. This commitment is reflected comprehensively in its policies, strategies, and programs.
To obtain the award, companies must apply and provide a series of documents that the experts designed by the Mexican Center for Philanthropy, A.C. (hereinafter “CEMEFI”) will review to demonstrate the level at which the company integrates social responsibility in a cross-cutting manner in the organization.
For this purpose, CEMEFI has designed a series of indicators by level of development to assess the companies’
- environmental,
- social,
- governance and
- global context.
Within the evaluation process, five levels of development are taken into account to assess the level of the companies in each of the indicators. The levels are
- initial commitment,
- management system,
- implementation,
- consolidation and
- innovation.
In this sense, in 2023, the award was granted to 1,040 companies that meet the standards of social responsibility, according to a methodology in which 150 expert consultants in different topics related to corporate social responsibility participated. This shows that companies are beginning to have some interest in improving their business practices to be recognized as socially responsible company.
However, such a distinction could enhance the recommendations of the ISO 26000 standard, which provides for a more demanding set of recommendations to improve socially responsible practices worldwide.
3. Increase of local provisions
Finally, there is a new trend that state authorities are issuing local regulations to enforce sustainability standards. Therefore, companies must be very aware of the local regulations of their manufacturing sites and/or the territories they intend to market their products.
A clear example of this is that at the state level, Environmental Standards are being developed which establish a series of guidelines to take care of the environment such as wastewater treatment, air quality care, criteria for the reduction of carbon emissions, among others. These standards are important because public authorities, companies and citizens must comply with them, otherwise the environmental authority may sanction them. However, it is important to mention that each state has the right to decide whether to implement and develop environmental standards within its territory.
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