The Greening of Business in Mexico

Trends in the 1980s associated with economic liberalization, export-oriented growth and foreign direct investment stimulated a vigorous debate in Mexico about their effects on the environment. While some argued that firms would adopt cleaner technologies others stressed the likely environmental and social costs. By providing an overview and assessment of the corporate response to environmental concerns, this paper looks at what actually happened in the 1990s. It identifies some of the main initiatives which have been taken in such areas as cleaner technology and environmental certification, and also the various institutions which are taking a lead role in promoting corporate environmental responsibility. In addition to assessing the scale and effectiveness of these developments, the paper analyses the implications for environmental protection and corporate environmental responsibility of broader trends associated with the dominant pattern of economic growth.

In the wake of the Earth Summit (1992) and the North American Free Trade Agreement (1994), there has been a flurry of institutional activity in Mexico to encourage business corporations to improve their environmental performance. Some significant initiatives have been taken by firms to improve environmental management. Perhaps more important for the long term is the fact that a fairly comprehensive set of institutions—private, public and regional—is now in place which is stimulating private sector responses in the field of corporate environmentalism.

This scenario of incipient but positive technological and institutional change is confronted by another in which some firms are tinkering with improvements in environmental management, making highly exaggerated claims and disregarding crucial aspects related to monitoring and independent verification. The paper questions the content of “corporate environmentalism”, suggesting that it has focused much too narrowly on technical “end-of-pipe” solutions to reduce waste streams rather than more thorough-going restructuring to improve community health and safety and the quality of life more generally.

Of particular concern are the environmental and social effects of trends associated with the dominant economic strategy being pursued in the country. This strategy has encouraged investment in highly polluting industrial activities and the siting of firms in urban areas with weak infrastructure, planning systems and fiscal regimes. The drive to rapidly “modernize” and develop certain economic sectors such as tourism has favoured private interests at the expense of both community groups and a developmental approach that balances economic, environmental and social considerations.

The analysis reveals a complex scenario of advances and retreats. As in the rest of the world, with greater information about the effects of industrial production and increased concern for the quality of the environment, more public pressure is being placed on business for responsibility. In return, markets require greater consideration of these effects and reward some of the participants handsomely. However, the increased volume of production, the trend towards more production for international trade, and the changing composition of output all conspire to intensify pollution while shifting towards greater use of scarce natural resources. Aggravating the problem is the accelerating tendency towards regional concentration with its associated ills of urbanization.

The heightened visibility of corporate campaigns to publicize their individual and collective efforts for environmental responsibility is a direct response to citizens' demands for greater regulation. In Mexico, the active process of private institutional development to forestall public sector action has been warmly welcomed by a government committed to restraining its intervention in the economy. While there have been some successful new partnerships, and important advances in the dissemination and application of technological remedies for some particularly egregious examples of industrial contamination, the overall quality of the environment is deteriorating as a result of the present strategy of development with the ensuing pattern of social polarization.

Corporate programmes for self-regulation have created the impression of important advances. The marketplace and consumer demands are playing a significant role in creating opportunities for producers to behave responsibly while increasing their profitability. This is particularly true of products whose environmentally benign qualities can be readily identified and marketed, as is the case of organically grown agricultural produce and environmental services, such as ecotourism. Inevitably, there is an element of confusion in the process of informing and educating the public and in cultivating new demands, but some Mexican producers have clearly embarked upon ambitious programmes to take advantage of this trend. Given the present-day conditions of heightened international competition, however, it is likely that some players will choose the less costly route of "greenwashing" in place of genuine environmental responsibility. It is the difficult task of an informed environmental and consumer movement to insist that corporate efforts to promote environmental responsibility are more effective.