Moody’s Ratings has assigned SQS2 and SQS1 scores to Mexico’s Sustainability-Linked Framework Supplement, confirming its alignment with international ESG standards and the 2025 Sustainability-Linked Loan Principles. The endorsement strengthens the credibility of the Ministry of Finance and Public Credit, supporting access to global capital markets for green and social bond issuances tied to seven environmental and social KPIs. The framework provides a transparent structure for sustainable investment, reinforcing fiscal efforts to address inequality and environmental targets in Latin America’s second-largest economy.
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Moody’s Ratings assigned a Sustainability Quality Score of SQS2 to Mexico’s Sustainability-Linked Framework Supplement, classifying the government’s approach as “very good.” The supplement is part of the updated Sovereign Sustainable Finance Reference Framework released by the Ministry of Finance and Public Credit (SHCP) on Jan. 8, 2026.
The SQS2 assessment reflects alignment with the five core components of the 2025 Sustainability-Linked Loan Principles issued by the Loan Market Association. Mexico selected seven Key Performance Indicators (KPIs) to anchor the framework — four environmental and three social — demonstrating, according to Moody’s, adherence to international best practices and a meaningful contribution to sustainability objectives.
Moody’s also contextualized the framework within Mexico’s macroeconomic profile. As the third-largest country in Latin America by land area and the region’s second-largest economy, Mexico benefits from trade openness and relatively strong institutional foundations. However, structural challenges persist. The agency highlighted a 68.5% poverty rate among Indigenous populations, above the regional average of roughly 55% between 2018 and 2022. Despite this, data from INEGI shows that average quarterly income in these communities increased 29% between 2016 and 2024, indicating gradual improvement.
The broader framework received an SQS1 score — the highest possible — in a Second Party Opinion evaluating its consistency with global standards, including the Green and Social Bond Principles of the International Capital Market Association.
Framework Structure and Strategic Scope
The revised framework updates the 2020 guidelines and serves as the central platform for Mexico’s issuance of green, social and sustainability-linked bonds. It is aligned with the National Development Plan (PND) 2025–2030 and the country’s updated Nationally Determined Contribution (NDC 3.0), presented at COP30.
A key enhancement is the incorporation of the Mexican Sustainable Taxonomy, designed to standardize definitions, improve transparency and prevent greenwashing. Spending eligibility is organized into four categories: environmental, social, sustainability-linked and transition activities.
Environmental investments prioritize renewable energy, energy efficiency, clean mobility and pollution control, with additional emphasis on coastal ecosystems such as mangroves and wetlands. The framework also introduces “blue economy” and “circular economy” components, alongside provisions for transition finance in emissions-intensive sectors under defined thresholds.
On the social side, the framework targets expanded access to essential services, including healthcare, education, housing and sanitation. It also prioritizes programs focused on poverty alleviation, gender equality and support for Indigenous and Afro-Mexican communities.
Governance, Reporting, and Oversight
Implementation is led by the SHCP in coordination with other federal entities, using internal systems to track allocations and avoid duplication. The framework supports both new investments and refinancing, subject to defined eligibility windows.
Mexico has strengthened its reporting commitments, with annual allocation and impact reports required for all sustainable instruments. These will include data on emissions reductions, installed renewable capacity and the number of beneficiaries reached, supplemented by transparent proxy indicators where necessary.
Oversight mechanisms include participation from the United Nations Development Programme as an independent observer, as well as audits conducted by the Supreme Audit Institution (ASF) to verify compliance with eligibility criteria and ensure accountability in the use of sustainable finance.