Mexico became one of the first countries in Latin America to require IFRS S1 and S2 sustainability disclosures from publicly listed companies. Now that the initial reports are in, we're seeing what worked, what didn't, and where companies need to focus for year two.
In a recent Watershed webinar, Arturo Rodríguez from the IFRS Foundation, Valerie Rodríguez from EY, and Helena García from Orbia—a multinational manufacturer headquartered in Mexico City—broke down what these first reports tell us. Here are the key takeaways.
Who has to report, and under what rules
Mexico's National Banking and Securities Commission (CNBV) now requires publicly listed companies outside the financial sector to report under IFRS S1 and S2—global standards that govern sustainability-related financial disclosures, with S2 focused specifically on climate. As of early May 2026, 77 public reports had been filed, with more expected by the end of July.
Mexico isn't the only country moving: Brazil and Chile also have ISSB-aligned regulations in force, with Honduras, Perú, and Panama expected to follow. More than 40 jurisdictions globally are applying or adopting these standards.
What year one revealed
EY benchmarked the 77 reports filed by early May, which highlighted some key findings.
First, assurance is coming fast—and most companies aren't ready. Only four of the 77 reports included third-party assurance, even though limited assurance becomes mandatory in year two. As Valerie Rodríguez of EY noted: "That tells you how unprepared the market generally is for the first change coming in year two: that absolutely all reports will now be subject to assurance." Companies that didn't run a pre-assurance process will have a lot of catching up to do.
Scope 3 transition relief uptake was lower than expected. About half of companies took the Scope 3 exemption, meaning the other half disclosed Scope 3 data voluntarily in year one. Category 1 (purchased goods and services) was the most commonly reported category. But methodology gaps remain: roughly 26% of companies didn't use the GHG Protocol, raising questions about data consistency across reports.
For Orbia, the challenge wasn't really about disclosure—it was about translation. "I would summarize this first year not so much as a disclosure challenge but as a translation challenge," said Helena García, who leads global sustainability strategy at the company. She described the process on three levels: translating environmental data into financial outcomes, translating the new requirements for internal teams like finance and investor relations, and building governance around data that existed but lived in different places. "Year one won't be complete or perfect," García said, "but it's about laying the foundation."
What changes in year two
All five transition reliefs expire. The most significant shifts:
- Concurrent publication. Sustainability disclosures must be published at the same time as financial reports—a major operational change for most companies.
- Beyond climate. The "climate first" relief ends. Companies must now consider sustainability risks and opportunities beyond climate that could affect their financial prospects.
- Limited assurance becomes mandatory. Every report needs third-party assurance, which introduces stricter requirements for data traceability and documentation.
- Scope 3 and GHG Protocol requirements tighten. The reliefs that allowed alternative methodologies and Scope 3 exemptions go away.
And year three brings reasonable assurance—comparable to a financial audit. "That level of traceability, certainty, and data governance cannot be built in six months after finishing year-two reports," Rodríguez of EY warned. "You have to start now."
What companies should do now
Our panelists offered specific advice that goes beyond "start early."
Get finance in the room. ISSB reporting requires financial materiality—risks and opportunities that could affect the company's financial prospects. That's a different lens from traditional sustainability reports, and finance needs to own part of it. If you don't already have a cross-functional working group, start one.
Narrow your materiality. You don't need to report on 15 topics. Identify three or four risks and opportunities that could reasonably affect your company's prospects. That focus reduces scope and enables better collaboration across functions.
Use the proportionality mechanisms built into the standards. These let companies disclose qualitatively when quantitative data isn't yet available—without undue cost or effort. Unlike transition reliefs, proportionality doesn't expire. "The ISSB is not asking companies to break the bank," Rodríguez of the IFRS Foundation said. "You can start with qualitative disclosure, and as your exposure to a risk becomes clearer, you transition to quantitative."
Map each risk to an organizational owner. Climate risks may sit with sustainability, but other sustainability-related risks often live in operations, legal, or finance. Identifying who already manages each risk builds the common language across teams that makes reporting possible.
García offered a vivid example from Orbia: "We needed data from strategy on climate-aligned products, and then we had to say, 'I need you to project this to 2050 under different climate scenarios.' And the response was, 'Wait—go back three steps. What are those climate scenarios?' Being able to speak the language of the areas you're working with was both the challenge and the accomplishment."
Build data traceability now. You don't necessarily need enterprise software, but you do need clear ownership, a defined process behind each data point, and controls in place. That foundation pays off when assurance requirements arrive—and they arrive fast.
This post is based on a Watershed webinar held on June 23, 2026, featuring Arturo Rodríguez (IFRS Foundation), Valerie Rodríguez (EY), and Helena García (Orbia). Watch the full recording here.
