Mexico

Mexico has made significant progress in implementing financial solutions for biodiversity through the BIOFIN initiative. The country is recognized for its unique biodiversity, which includes more than 10% of the world's species and ranks third in mammals and second in reptiles globally. This vast natural wealth, however, is threatened by accelerated biodiversity loss and increasing pressure on natural resources.

BIOFIN in Mexico has worked on mobilizing and aligning financial resources with conservation and sustainability objectives through a portfolio of five thematic solutions encompassing more than 20 funding mechanisms and more than 40 partners and counterparts. One of the main achievements has been the institutionalization of the Biodiversity Expenditure Analysis (BER) at the National Institute of Statistics and Geography (INEGI), with a detailed report published annually on the state of the public budget linked to biodiversity. This analysis has made biodiversity visible in cross-sectoral policies at the federal level, but it has also succeeded in linking financial information with an initial diagnosis of incentives harmful to biodiversity.

Another key area has been funding for projects linking climate change and biodiversity. Mexico has begun to explore the integration of biodiversity credits and offsets into sub-national carbon markets, channeling resources into forest restoration and sustainable use projects. In this context, a massive online course (MOOC) on carbon markets was launched, which will be complemented with additional educational resources in the Mayan language, to broaden its impact on local communities. In this area, BIOFIN is also working with some states on linking their carbon taxes and channeling them into nature-based solutions.

At the sub-national level, BIOFIN has implemented its methodology in 13 Mexican states, helping to strengthen regulatory frameworks and develop financial mechanisms for conservation. In 2024, the states of Coahuila and Michoacán were incorporated, where catalytic actions for conservation have been identified, while in Tamaulipas the climate change fund is being strengthened to channel adaptation finance towards mitigation and ecosystem-based adaptation projects. Likewise, in Yucatan, in coordination with WWF, a trust fund was developed that will allow the channeling of more than 20 million dollars over the next 10 years for the conservation of protected areas under the figure of a Financing for Permanence Project.

BIOFIN has also promoted the bioeconomy in Mexico. It recently launched the biodiversity credit solution and habitat banking as mechanisms to improve environmental offsetting and develop a portfolio of projects so that the private sector can meet its strategies and transition plans by purchasing credits in critical habitats for conservation. In this line, BIOFIN also collaborates with development banks to develop their environmental and social risk management systems (SARAS) and generate financing products for productive projects with a positive impact on biodiversity.

Finally, BIOFIN has collaborated with the financial sector to integrate biodiversity into financing decisions. For three consecutive years, BIOFIN has participated in the organization of conferences on biodiversity and finance with the Bank of Mexico, where progress was made in the creation of a catalog of metrics and indicators for the financial sector that includes biodiversity aspects. In addition, it developed a diagnosis of nature-related financial disclosure mechanisms and built an interoperability matrix for the main disclosure frameworks and standards to facilitate the reporting of financial information for banks and corporations.

In the same solution, a memorandum of understanding was signed with BANORTE bank to implement the Nature-related financial disclosures framework (TNFD). This effort has already started with a comprehensive analysis of the bank's prioritized portfolios to pilot the LEAP-TNFD approach in the bank. The first results will be presented in the first quarter of 2025.

Despite significant progress, Mexico still faces challenges in mobilizing resources at the local level and institutionalizing financial solutions in key sectors. In the coming months, BIOFIN Mexico will focus on strengthening the federal biodiversity finance framework, through the development of the national biodiversity plan and actions stemming from the decisions of COP 15 and 16 of the Convention on Biological Diversity.

Read more: Inicia actividades la Alianza para el financiamiento a la conservación y restauración comunitaria de la biodiversidad | BIOFIN; Mobilizing resources at the Subnational level in Mexico | BIOFIN; Mexico's Biodiversity Expenditure Account: Update and Institutionalization | BIOFIN