Each week Emerging Markets ESG publishes an interview entitled, “Five Questions about SRI.” The interview features a practitioner’s insights about SRI in emerging markets and through Emerging Markets ESG shares this expertise with a wide global audience. The goals of Five Questions about SRI are fourfold:
- To collect a catalogue of examples of SRI in practice in emerging markets;
- To raise awareness about SRI in emerging markets;
- To reflect on what SRI in emerging markets means to practitioners; and
- To enable SRI practitioners in emerging markets to network with peers around the world.
This week’s interview is with Alicia Gómez Martínez, Research Professor, Faculty of Accounting, Benemérita Universidad Autónoma de Puebla (BUAP), Mexico.
The Benemérita Universidad Autónoma de Puebla (BUAP) is a Mexican university founded on April 14, 1578. It is an autonomous institution, located in the city of Puebla. The university has a large impact in Puebla because of the conferences it holds and the research it conducts. It is considered one of the most important universities in Mexico. It is one of six Mexican public institutions that are part of the Macrouniversities Network of Latin America and the Caribbean. It offers academic degrees in several career paths. The university offers face to face and on-line courses. Since 2011 business administration, communication and public accounting are offered online. The symbol that identifies the University is related to its history: the phoenix rising from the tongues of fire that destroyed a past and give rise to a future framed by Athena. Its academic slogan is: Think Good, For Better Living. It summarizes the importance of knowledge in human development.
Alicia Gómez Martínez is a Research Professor in the Faculty of Accounting of the Benemérita Universidad Autónoma de Puebla (BUAP). Her interests include business administration, finance and small and medium size enterprises (SMEs). She has work experience in private enterprises. She holds a PhD. in Accounting from the Universidad de Cantabria, Spain.
Emerging Markets ESG: How would you define socially responsible investment (SRI)?
Alicia Gómez Martínez: From my point of view, SRI means that private enterprises and public enterprises relate in a friendly way with their internal and external environments – which include clients, employees, government, members and suppliers. Thus, they can return to the community some of the benefits they receive, searching for the common well-being.
Emerging Markets ESG: What distinguishes SRI from mainstream investment?
Alicia Gómez Martínez: Economic interest is fundamental for private enterprises. In SRI, value must be generated, that is, something additional must be created, for example, through concern about the expectations of the different groups of interests which are related to the enterprises, the enterprise should act with equity and justice.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for companies in Mexico to manage?
Alicia Gómez Martínez: In Mexico, the large enterprises are mostly the ones to make public the actions that they undertake in these matters, such as care for the environment or charity. The main challenge is to determine what really matters for the community and to determine how every enterprise should contribute according to its particular possibilities.
It is important to note the contribution provided by small and medium size enterprises (SMEs). According to official figures, there are more than five million enterprises in Mexico; 99% of them are SMEs. Thus SMEs should be recognized as creators of jobs and wealth.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for investors in Mexican companies to analyze?
Alicia Gómez Martínez: There is no doubt on the matter. In the case of Mexico, there is a list of topics that must be covered, because all social organizations, enterprises included, have a responsibility to protect the environment, improve the welfare conditions of the population and to guard the activities of the government, otherwise we will confront the results of our irresponsibility.
Emerging Markets ESG: Which instruments or mechanisms exist today for SRI in small and medium-size enterprises (SMEs) in Mexico?
Alicia Gómez Martínez: In the first place, there is the designation Socially Responsible Company (SRE®), which is annually awarded to enterprises of all sizes, through a process of self-evaluation, with 120 indicators in four areas: quality of working life, protection of the environment, ethical performance and interaction with the community. Each indicator must be documented with data, which is presented to the Centro Mexicano para la Filantropia (CEMEFI), a private organization. The designation is given to any enterprise whose rating exceeds 75%.
Additionally, there is the Compite Para el Desarrollo de tu Negocio (COMPITE), the National Committee of Productivity and Technical Innovation, a nonprofit institution, which receives government support to provide advice to SMEs about Corporate Social Responsibility.