In conversation with Fernando Hurtado de Mendoza

We are delighted to introduce Fernando Hurtado de Mendoza, a partner in Kennedys’ Lima office and the global deputy head of Kennedys sustainability and ESG practice group.

Fernando specializes in (re)insurance law, aviation and corporate/commercial law and advises insurers and corporates on integrating sustainability and ESG strategies into their business operations, helping them navigate the complex ESG regulatory landscape, ensuring compliance and fostering long-term and profitable growth.

He also regularly acts as counsel to local and foreign clients from different sectors in an array of commercial and corporate matters, related to the initiation, continuation, expansion and exit of local operations, including the advice to Asian, European and North American investors for their potential entry into Peru.

How does your legal practice in Latin America intersect with sustainability and ESG considerations?

Historically, my legal practice has focused mainly on insurance and reinsurance, aviation and corporate matters. In the last few years, I have seen a growing interest and necessity from clients of all sectors in adopting ESG practices. For example, an increasing awareness of international ESG regulations and, in particular, of those emerging in Latin America, with clients requiring assistance with reviewing their own actions and those of their suppliers.

Many companies are conducting ESG risk assessments, implementing sustainability reporting frameworks and reviewing their supply chains to ensure ethical and environmental standards are met. Others are beginning to update their corporate governance policies to align with international standards.

Hence, my legal practice in Latin America is increasingly aligned with sustainability and ESG considerations, as companies in the region begin to embrace these trends and navigate a growing regulatory landscape. My ESG practice mainly involves helping my clients to integrate ESG principles into their business strategies where relevant, ensuring they comply with evolving regulations and market expectations. However, this goes beyond simply offering advice when requested, as I am dedicated to proactively incorporating an ESG focus into any advice I provide to my clients in any sector of the economy.

Can you share a recent example of an ESG-related project or matter that you have worked on?

I have been involved in several ESG-related projects that reflect my commitment to integrating the sustainability and ESG principles into the legal services I provide. One notable example is my work with an insurer, where a comprehensive research of ESG regulations applicable to the insurance industry in Peru was conducted. This request was a result of my efforts on introducing the insurer to ESG standards and sharing the most recent updates of this global phenomenon. I have also assisted potential target companies in M&A transactions, in order to raise their profile with concrete actions in preparation for due diligence reviews to be carried out in the interest of potential buyers. This involved not only assessing whether companies meet their ESG obligations but also providing recommendations for improvements, where necessary.

Beyond client work, I am also passionate about spreading ESG knowledge. As part of my duties as Chair of the ESG Committee of the Inter-Pacific Bar Association (IPBA) and others, I have organised and participated as a speaker in ESG-related sessions in Asia, the US, Latin America and the Middle-East, enriching the global exchange of knowledge on this field. Recently, I was a speaker at a sustainability session in the Ibero- American Congress of Insurance Law that took place in Chile, where I touched upon the latest sustainability and ESG trends and developments for the legal community.

What are the key trends or developments shaping sustainability and ESG efforts in Latin America? How do these compare to other global trends?

Latin America is gradually catching up with sustainability and ESG trends. Much of this is focused on reporting. Certain Latin American countries, such as Peru, Chile and Colombia, have introduced regulations requiring listed companies to report on their sustainability and ESG efforts to their corresponding regulatory authorities, enhancing transparency for investors.

Other developments vary according to the country. While some countries such as Chile and Peru are focusing on promoting renewable energy like green hydrogen and implementing regulations on solid waste management , others like Brazil are addressing social inequalities with measures to reduce the gender pay gap.

An important emerging trend is ESG arbitration and litigation in Latin America, arising from various matters such as climate rights, corporate liability, greenwashing, among others.

Based on the aforementioned trends, companies in Latin America are seeking to implement the most effective mechanisms to prevent any ESG contingencies from arising. In this regard, there is a growing interest in obtaining specialised legal assistance on ESG matters, as well as ensuring that the legal service provider is aligned with ESG best practice and does not represent a potential additional contingency. Consequently, clients turn to us, knowing that Kennedys, as a global firm, has full knowledge and expertise in this field and is aligned with international ESG regulations, initiatives and best practices.

These developments in Latin America reflect a growing alignment with international sustainability and ESG frameworks and practices, though there is still a gap in the depth and speed of implementation. While Latin American countries are advancing rapidly, regions like Europe are more mature in terms of ESG integration, with well-established regulatory frameworks that serve as models for Latin American rule makers. However, the region is making steady progress which is crucial to closing this gap.

How are businesses and insurers, in particular, across Latin America adapting to meet global sustainability and ESG standards?

Many companies are actively educating their people on what ESG entails and are seeking training on how to incorporate these principles into their operations. The most diligent corporates conduct thorough local legal research and follow international frameworks, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the International Financial Reporting Standards (IFRS), and the Task Force on Climate-related Financial Disclosures (TCFD).

Some companies have taken voluntary steps, such as participating in the UN Global Compact, a non-binding initiative that encourages businesses to respect labour rights, environmental protection, and human rights by adopting sustainable and socially responsible policies. Additionally, many businesses are aligning their strategies with the UN Sustainable Development Goals (SDGs) to further integrate ESG principles.

Despite these advancements, challenges remain. A report issued in 2024 by RSM, a leading provider of auditing, tax, and consulting services, reveals that 57% of companies in Latin America still lag behind in the implementation of mandatory sustainability reporting standards. This indicates that there is still much work to be done for corporates and insurers in the region to fully adapt to global ESG standards.