Comisión Federal de Electricidad

CFE has set a target to reduce its emissions intensity by 34% by 2026 compared to 2020. However, it is not clear from CFE’s reporting which scope of emissions this target applies to. The company should seek to formalise the target with a clear description of the emission scopes covered. Moreover, it should establish more ambitious long-term targets to achieve net-zero emissions, with this 2026 target acting as an intermediary target to drive near-term action.

CFE is unlikely to achieve its target to reduce emissions and increase its low-carbon generation without significantly improving its climate governance. As a state-owned company, it is committed to complying with Mexico’s law to achieve a 35% low-carbon energy generation share by 2024. Yet, there is no evidence that CFE has strategic mechanisms or low-carbon investment plans in place to achieve this goal. CFE should develop a low-carbon transition plan that is aligned with a 1.5°C pathway and implement board-level climate governance to oversee the delivery of this plan.

More than 40% of CFE’s sold electricity comes from the company’s purchased power for retail. As a consequence, engaging with its suppliers is integral for the company to reduce emissions in its value chain. However, no evidence was found to suggest the company engages with suppliers on climate change issues or greenhouse gas (GHG) emissions reduction through strategies, initiatives or partnerships. CFE can improve on this by developing a comprehensive supplier engagement strategy to influence its suppliers to reduce their emissions.

CFE’s emissions intensity trend for purchased power for resale between 2017 and 2022 could not be assessed due to a lack of reported data. Despite relying on purchased power for resale for more than 40% of its delivered power, the company does not provide sufficient data on the power generation sources. CFE can improve in this area by reporting the figures for its power purchased for resale by generation source.

CFE has set a target to reduce its emissions intensity by 34%, by 2026 compared to 2020. However, it is not clear from CFE’s reporting which scope of emissions this target applies to. CFE commits to Mexico’s energy transition law, which states that Mexico must generate 35% of its electricity from renewable sources by 2024.

CFE plans to increase its hydroelectric generation capacity by 264 megawatts (MW) by 2024. The company plans to modernise and enhance at least 14 hydropower plants. It plans to have 1 gigawatt (GW) of solar photovoltaic (PV) capacity by an unspecified time. It also aims to install 28 electric vehicle (EV) charging points by 2026. CFE aims to construct a new geothermal plant by the end of 2023.

Only 29% of the company’s current energy generation is from low-carbon sources, such as nuclear sources, hydropower and renewables. CFE focuses its research and development (R&D) efforts on smart grids and modernising its hydropower plants to increase efficiency. However, there is no evidence that CFE invests its R&D or allocates capital expenditure (CapEx) for low-carbon technologies.

CFE’s emissions intensity trend for its own energy generation decreased between 2017 and 2022. This is likely due to the company reducing its use of coal and increasing its use of fossil gas and hydropower. CFE’s emissions intensity trend for purchased power for resale between 2017 and 2022 could not be assessed due to a lack of reported data. Despite relying on purchased power for resale for more than 40% of its delivered power, the company does not provide sufficient data on the power generation sources.

CFE plans to increase its hydropower capacity and have 1 GW of solar PV capacity by an unspecified time. However, it lacks a low-carbon transition plan, a coal phase-out date and a clear climate governance structure. Coupled with its planned reliance on fossil gas, coal and fuel oil, this makes it highly unlikely for CFE to be successful in a low-carbon economy.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

No company policies or commitments related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

No evidence of the company’s policies or commitments related to key decent work issues was found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly renumerated and have a meaningful say in decision-making.

No company policies or commitments related to key ethical business topics – personal data protection, tax, bribery and corruption, and lobbying and political engagement – were found in the public domain. This includes ensuring ethical business conduct throughout its operations and in its business relationships.