Why Mexico Is Outpacing Asia, Europe, and LATAM as a Hub for Sustainable Supply Chains to the U.S.

Global companies face mounting pressure to reduce their carbon footprint in a world increasingly aware of environmental impact. Currently, around 41% of publicly traded companies worldwide have committed to net-zero emissions targets, according to the 2023 Net Zero Tracker. In this context, Mexico is emerging as one of the most attractive alternatives for the United States—the world's largest consumer market—not only because of its geographic and commercial proximity, competitive costs, and skilled labor, but also due to its lower carbon footprint compared to China and other European and Asian economies.

“Mexico has become a key player for companies seeking to reduce their carbon footprint within an efficient and profitable supply chain,” says Alejandro Delgado, Country Manager Mexico at SiiLA. “The country’s industrial infrastructure is increasingly aligned with these demands, with developments more and more focused on sustainability, an area where Mexico has seen significant growth in recent years.”

The trend of sustainability is gaining momentum in Mexico's industrial real estate market. Data from SiiLA Market Analytics reveals that over 5% of inventory holds green certification, with an even greater percentage featuring uncertified sustainable characteristics. This percentage is projected to continue its upward trajectory as the certified industrial pipeline expands. Between 2020 and 2023, 6-7% of new inventory entered the market with some certification, but by 2024, this figure has risen to 10%. A prime example is the ProximityParks Lomas Verdes warehouse, delivered in the second quarter of this year in the metropolitan area of Mexico City. This property, currently undergoing LEED certification, covers 25% of its total energy consumption through solar panels.

This progress in the industrial sector reflects a global trend toward reducing environmental impact, especially in the face of growing concerns over emissions from international trade. Nowadays, nearly 30% of global carbon emissions from transportation come from international trade, which overall generates between 20% and 30% of global greenhouse gases, according to the OECD and the International Transport Forum (ITF).

Most of this pollution stems from maritime and air transport of goods over long distances, particularly between Asian production centers and consumption markets in North America and Europe.

The OECD projects that freight transport emissions could quadruple by 2050 without action. According to ITF data analyzed by SiiLA, the most polluting trade routes to North America include the North Pacific, connecting with Asia, where carbon emissions will increase by 0.73% for every 1% rise in freight volume over the next 25 years, and the North Atlantic, connecting with Europe, with a 0.71% rise. In contrast, routes within North America, such as those connecting Mexico and the U.S., are more efficient, with only a 0.60% increase, thanks to geographic proximity and shorter transport distances.

This underscores why Mexico and Canada are more appealing to the U.S. in terms of sustainability. In fact, according to the 2023 Global Carbon Budget data analyzed by Our World in Data, both countries generate the lowest emissions related to trade among the main exporters to the U.S. (Mexico, China, Canada, Germany, and Japan).

Comparing China and Canada, both major net carbon exporters due to the high volume of polluting goods they export, we see significant differences. China's carbon footprint is much larger due to its more polluting industrial processes, whereas Canada maintains lower levels thanks to its proximity to the U.S. and cleaner production methods.

On the other hand, Mexico is a net carbon importer, as it imports more polluting goods than it exports. Mexico generates fewer emissions than other net importers like Germany and Japan. While these countries—like Mexico—purchase many polluting products from China, their emissions are higher due to the long distances needed to transport those goods, especially from the U.S., on which they depend for 6%, 10%, and 40% of their imports, respectively.

These comparisons show that geographic distance and clean production processes significantly impact trade-related emissions. While Mexico and Canada benefit from their proximity to the U.S., many Asian and European countries face a much larger environmental footprint due to long transportation distances.

Even though Latin American countries like Brazil and Argentina generate fewer emissions—compared to Mexico—thanks to their use of renewable energy, they face challenges due to the long distances that complicate their supply chains. This reinforces Mexico's role as Latin America's most sustainable and competitive manufacturing center, especially in North America.