Current Sustainability Guidelines: Europe vs. Latin America

Corporate sustainability has already become a regulatory obligation in Europe, where directives such as the CSRD, the EU Taxonomy, and Germany’s LkSG require auditable reporting and compliance with ESG standards across the entire supply chain. In Latin America, by contrast, progress is mostly voluntary and uneven: large companies are beginning to adopt international frameworks, while many SMEs still face barriers. For Latin American firms doing business with Europe, aligning with these guidelines is essential—not only to access and secure international markets, but also to strengthen competitiveness and reputation in an increasingly sustainability-driven global environment.

Quelle: Freepik, KI

Corporate sustainability is no longer optional; it has become a strategic and regulatory imperative, especially in Europe. European companies are subject to regulations requiring transparency, measurement, and management of their environmental, social, and governance (ESG) impacts.

In Latin America, on the other hand, sustainability develops more gradually and, in many cases, voluntarily. Environmental laws and corporate social responsibility programs exist, but they do not always require standardized reporting or external audits. However, for companies doing business with Europe, adapting to these guidelines is essential: compliance with European standards becomes a prerequisite to maintain and expand business opportunities.

European Sustainability Guidelines

Europe has established itself as a global benchmark for ESG regulation. The Corporate Sustainability Reporting Directive (CSRD), for example, obliges companies to publish detailed reports following the European Sustainability Reporting Standards (ESRS). These reports not only describe sustainability initiatives but also require precise, comparable, and auditable metrics that allow objective assessment of company performance.

Another important element is the EU Taxonomy, which defines which economic activities are considered sustainable and helps prevent greenwashing. In addition, national laws such as Germany’s LkSG require companies to ensure that their entire supply chain complies with environmental and human rights standards. These obligations extend to suppliers on other continents: a Latin American company that is part of a European company’s value chain must indirectly comply with these regulations.

Soon, the Corporate Sustainability Due Diligence Directive (CSDDD) will expand these requirements, obliging large companies to audit and supervise sustainability practices across their network of suppliers and business partners.

The Situation in Latin America

In the region, sustainability has developed primarily as a voluntary effort. While legal frameworks and corporate social responsibility programs exist, their implementation and enforcement are uneven. Large companies have started reporting under international standards such as GRI or SASB, but many small and medium-sized enterprises still face barriers to implementing systems for measuring and generating reports comparable to European standards.

The difference from Europe is significant: while European companies are legally required to report and audit, in Latin America compliance largely depends on pressure from international clients or internal strategic decisions. This gap represents a risk but also an opportunity for companies that choose to get ahead.

Why Complying with European Guidelines is Strategic

Even if European regulations do not directly apply in Latin America, their impact is transmitted through supply chains and business relationships. A company that wishes to export or supply European companies must demonstrate that it measures its carbon footprint, properly manages social and environmental impacts, and respects labor rights.

Complying with these standards not only guarantees access to international markets but also provides competitive advantages over suppliers who have not yet adopted ESG standards. Furthermore, financial institutions and investment funds prioritize sustainable companies, and corporate reputation is strengthened by demonstrating transparency and commitment to sustainability.

Conclusion

Europe currently leads in sustainability regulation, while Latin America progresses more gradually and voluntarily. For companies in the region that maintain business links with Europe, adapting to these guidelines is not optional: it is a key strategy to protect contracts, improve competitiveness, and open new business opportunities.

In a globalized world, sustainability knows no borders. Companies that successfully integrate European standards into their operations and supply chains will be better positioned to compete, grow, and contribute to a more sustainable and responsible future.

Do you want to learn more about European standards on sustainability and the regulations your company can align with?

✨ At MOSAIC, we help you achieve it: info@mosaic.mx