MEXICO Law and Practice Contributed by: Federico Ruanova Guinea and Isabella Guzman, Baker McKenzie
are generally not awarded. As discussed in 5.1 Key Types of Liability , bad environmental behaviour is punishable by fines, shutdowns, orders to restore and remediate and, in some cases, by prison sentences. The General Law does contain a mechanism that allows an infractor to commute a monetary fine by investing the amount of the fine in projects that benefit the environment. The infractor must expressly seek approval from PROFEPA to be able to benefit from the commutation and must waive any rights of appeal. 6.4 Shareholder or Parent Company Liability There is no piercing of the corporate veil for envi- ronmental violations; therefore, shareholders cannot be liable. Only the legal entity (a corporation) may be found liable, along with its legal representatives, directors, administrators, managers or employees. However, environmental agencies may summon shareholders of a particular company to the adminis- trative procedure or judicial trial in order to negotiate an agreement on behalf of a company found to be causing environmental damage. It is rare for parent companies to be accused of play- ing a role in environmental damage caused by their subsidiaries. However, collective actions on environ- mental matters could target parent companies if there is evidence that they may have been complicit in any action or omission that causes environmental dam- age. 6.5 ESG Requirements There is yet to be a law or regulation defining what ESG is, or what the ESG disclosure requirements should be and there are currently no legal obliga- tions for corporate entities that are not stock issuers to report their sustainability performance or comply with sustainability standards. The Mexican Council for Financial Reporting Stand- ards (CINIF) is currently the sole body in Mexico in charge of developing and issuing local financial reporting standards (NIFs) and sustainability stand- ards (NIS), which are based on international frame- works issued by the International Accounting Stand- ards Board (IASB) and the International Sustainability Standards Board (ISSB) respectively. It should be
noted, however, that CINIF is a private institution (a civil association) and not a governmental authority. Therefore, it lacks an explicit mandate from the Mexi- can government to make its sustainability standards legally binding for all entities operating in Mexico. For CINIF’s standard framework to be considered man- datory, there must be a specific legal provision that expressly refers to such framework or to a specific standard. In certain regulatory frameworks – primarily those applicable to financial institutions supervised by the National Banking and Securities Commission (CNBV) – there are explicit provisions requiring that financial information of a supervised entity be prepared in accordance with CINIF standards. These obligations are enforced by the CNBV itself and not by CINIF. Enti- ties that are not subject to CNBV’s regulatory authority are not required to report. That being said, Mexican corporations may voluntarily report their sustainable performance. 6.6 Environmental Audits The federal government enacted a voluntary environ- mental auditing regulation in 2010 that allows compa- nies that do not comply with environmental laws the opportunity to correct this failing and thus avoid liabil- ity. “Clean Industry Certificates” are issued by PRO- FEPA in favour of companies that fully implement the corrective actions derived from the auditing process. PROFEPA unveiled a new audit programme in 2025 that improves the 2010 version and allows companies to avoid penalties by auditing their performance. 7. Personal Liability 7.1 Directors and Other Officers Corporate officers, employees and agents are gener- ally liable for: • negligence or misconduct when discharging their duties; • breaches of instructions received from manage- ment; • actions that exceed their authority; and • allowing, within the scope of their functions, viola- tions of the Federal Criminal Code, solely in the
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