Switzerland Aligns Corporate Sustainability Rules with EU Standards

Switzerland is proposing new corporate sustainability regulations that introduce clearer reporting criteria and international standards. The goal is to harmonize the regulatory framework with recent European directives.

Switzerland advances ESG regulations to align with European standards and strengthen corporate transparency

Switzerland has submitted a legislative proposal to introduce new rules on sustainability reporting and corporate due diligence , aligning it with the latest European standards. The bill particularly affects large companies and establishes new transparency requirements on environmental, social, and governance issues.

The proposed Federal Act on Sustainable Corporate Governance was born in light of recent changes in European regulation , which have modified the scope of the obligations imposed on companies in the area of ​​sustainability reporting and due diligence in value chains.

One of the main objectives of the proposal is to create greater alignment between Swiss and European Union regulations. Specifically, the new regulatory framework is inspired by the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), which govern ESG transparency and the management of companies’ environmental and social impacts.

According to the proposal, sustainability reporting requirements in Switzerland will apply primarily to larger companies. The proposed threshold applies to companies with at least 1,000 employees and annual revenues of approximately 450 million Swiss francs. This could reduce the number of companies affected by the new rules to around 100, compared to the approximately 200 currently required to publish ESG and climate reports.

For due diligence obligations, however, the threshold is similar to the CSDDD threshold, equal to 5,000 employees and 1.5 billion Swiss francs . According to Federal Council estimates, approximately thirty companies are affected by these obligations.

Affected companies in Switzerland would also be required to verify whether their own activities, those of their subsidiaries, or partners along the supply chain could generate actual or potential negative impacts on human rights and the environment. The proposal also requires the adoption of dedicated strategies and codes of conduct , the integration of sustainability criteria into risk management systems, and the introduction of tools to prevent or address any potential impacts.

Participating companies will be required to prepare their reports according to internationally recognized standards, such as the European Sustainability Reporting Standards (ESRS) or other equivalent systems. The goal is to make the data comparable with those of European companies and improve the quality of information available to investors, institutions, and other stakeholders.

Switzerland already has a series of sustainability transparency requirements

Currently, companies in Switzerland with more than 500 employees must publish annual reports on topics such as the environment, human rights, working conditions, and the fight against corruption. These rules also include specific climate requirements, which include information on greenhouse gas emissions, climate risks, and transition strategies.

With the new legislative proposal, the Swiss government therefore aims to review and simplify the existing system, concentrating the obligations on larger companies but at the same time strengthening consistency with international standards.

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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