Welcome to the third edition of the Latin America Green Guide 2025.
Latin America’s wealth of clean energy and lithium resources presents a significant opportunity for economic growth via a green transition. The region also houses the Amazon rainforest, which plays a vital role in the climate emergency, storing a huge amount of carbon and housing at least 10 per cent of the world’s biodiversity. For many of Latin America’s current governments, prioritising the green transition has become a driving force for change, positioning the region as a crucial contributor to the global sustainable development agenda.
Yet with the region’s diverse social, economic, political, and environmental landscape, each country faces its own challenges, including limited resources, corruption, and inadequate monitoring and compliance mechanisms, often hindering effective enforcement. Other obstacles include illegal land use, logging, and wildlife trade, as well as mining and extracting activities, and indigenous land rights.
Uruguay and Costa Rica are leading the region in the green transition, both generating almost all of its electricity from renewable sources. Costa Rica is renowned globally for its strong commitment to sustainability and ambitious plans to achieve carbon neutrality. Uruguay’s current focus is on the development of a green hydrogen economy and electric transportation.
Chile has also made substantial progress: In a big step forward, a new law on biodiversity protection was enacted in 2023, streamlining the management of the country’s protected areas, enhancing conservation efforts, and increasing funding and coordination for biodiversity protection. The recently announced regulation from the Comisión del Mercado Financiero obligates public companies and other organisations to report their ESG policies, practices, and goals, and demonstrates an effort to diminish greenwashing. Additionally, in 2023, the extended producer responsibility law, which affects packaging companies, became enforceable in the country, as well as a new law on single use plastics.
Brazil, Latin America’s largest economy, has enormous potential to become a major producer of green hydrogen (H2) and possesses large reserves of critical minerals required for the energy transition. Despite facing many hurdles, the country is anticipating a number of positive developments by the end of 2024: new regulation on the carbon market; the enactment of the long-awaited general environmental licensing law, which will regulate renewable projects; and the ‘fuel for the future’ law, which aims to support the green transition in the aviation and transport sectors. The country, home to a big part of the Amazon rainforest, has also seen a significant increase in the demand for carbon credit projects, although this growth is challenged by disputes over land ownership, complicating the legitimacy and effectiveness of Brazil’s carbon market initiatives.
Colombia’s energy transition policies have shown a strong commitment to climate action. Recently, the country has seen players in the renewable energy sector show interest in the development of battery energy storage systems, as well as some pilot projects for the production and storage of hydrogen. These development can be attributed to the recently enacted law 1715 which promotes the integration of alternative energy in the Colombian energy mix and incentivises investment.
Mexico was among the first countries to pass comprehensive climate change legislation (in 2012) and is ideally positioned to become a clean energy powerhouse. Under president Andrés Manuel López Obrador, however, it has turned its focus back from renewables to fossil fuels. Although climate action has generally plummeted, the country has seen some progress towards extended responsibility regimes in waste management, as well as towards circular economy production schemes and obligations. Increasingly, state authorities are implementing environmental and ecological taxes, which affect GHG emissions, waste disposal, and wastewater discharges.
These regional regulatory developments alongside increasing client demand for sustainable business practices are driving the establishment of ESG departments across law firms in Latin America. While the market is making strides, there is room for growth and dedicated sustainability practices are still far from commonplace. In this third edition of our Latin America Green Guide, we have highlighted some of those key players who have shown strong engagement with the green transition and climate action within the context of the region.
Anna Bauböck | EditorMaya Sainani | Senior Researcher
