As the consultation period on the preliminary draft of the Federal Act on Sustainable Corporate Governance (VE-NUFG) comes to a close, SwissHoldings is issuing a statement on the Federal Council’s indirect counterproposal to the new Corporate Responsibility Initiative. The association supports further development of regulations in the area of sustainable corporate governance but rejects the preliminary draft in its current form. It goes beyond international standards on several key points and would undermine Switzerland’s competitiveness as a business location.
The VE-NUFG contains new provisions on liability, sustainability reporting, and due diligence obligations and proposes a new supervisory authority. The Federal Council aims to comprehensively further develop the rules on sustainable corporate governance in Switzerland, align them with international standards, and ensure a level playing field for Swiss companies. From SwissHoldings’ perspective, the preliminary draft falls short of these goals on several key points.
New liability rules create significant legal risks
The most controversial element of the draft is the expanded liability provisions. These go well beyond the current European legal framework. If the Federal Council’s counterproposal were adopted and implemented, Swiss parent companies would be liable for their subsidiaries worldwide. Combined with discovery-like disclosure mechanisms and a 20-year statute of limitations, this would lead to significant legal risks. Additionally, the proposal foresees the highly problematic application of Swiss law to situations occurring outside of Switzerland. The association calls for the complete removal of the proposed liability provisions.
Far-reaching supervisory powers are disproportionate
The liability provisions are supplemented by a new supervisory authority with far-reaching powers of intervention and authority to impose sanctions. SwissHoldings criticizes these measures and emphasizes that they go well beyond effective oversight of due diligence and reporting obligations. Instead of establishing new, costly control structures, the focus should be on proven approaches. These include, in particular, the OECD National Contact Point for Responsible Business Conduct, which should be strengthened.
Sustainability reporting, yes—but without special Swiss rules
SwissHoldings generally welcomes internationally coordinated, risk-based due diligence and reporting obligations. However, the VE-NUFG creates unnecessary special Swiss regulations, duplication of efforts, and additional administrative burdens. Instead of a “Swiss Finish,” there needs to be a consistent alignment with international standards and a practical implementation.
With the VE-NUFG, the Federal Council aims to align Swiss regulation with international standards. However, on key points, it goes beyond current international developments—and EU developments in particular—and creates additional legal uncertainty as well as unnecessary administrative burdens. SwissHoldings therefore calls for a fundamental revision of the draft. Since this is hardly feasible given the conceptual challenges and the tight timeline, the association opposes an indirect counterproposal.
Read the full SwissHoldings statement (in German).
Contact
Gabriel Rumo | CEO| +41 (0)31 356 68 68
