This is an automated translation.
Last week, the Federal Council decided to wait for regulatory developments in the EU before considering further amendments to Swiss law. SwissHoldings explicitly supports this course of action. This pragmatic approach helps to avoid a ‘Swiss finish’ and ensures that Swiss companies are not confronted with excessive or isolated requirements in international comparison.
Stricter rules for sustainable corporate governance have been in effect in Switzerland since the beginning of 2022. Large companies are required to report on risks in the areas of the environment, social issues, labour rights, human rights and anti-corruption, as well as on measures taken. Specific due diligence and reporting requirements apply in sensitive areas such as child labour and conflict minerals. The Federal Council has been examining potential developments to these regulations for some time. In this context, it submitted a draft amendment to the Swiss Code of Obligations for consultation in summer 2024, aiming to extend the reporting obligations to more companies. Numerous respondents emphasized the need for reduced administrative burden in their consultation responses. In addition, initial analyses of the impact of the tightened due diligence obligations are now available. The Federal Council took note of these findings in its meeting last week.
EU Undertakes Regulatory Recalibration
At the same time, the Federal Council is also taking international developments into account. At the end of February, the EU Commission announced plans to significantly streamline its sustainability rules as part of an Omnibus Proposal (SwissHoldings reported: see here). The focus is on reducing bureaucratic hurdles and easing the economic burden on companies – with potential savings of up to 6.3 billion euros. The Federal Council is sticking to its strategy of an internationally coordinated approach. It has decided (see here in DE or FR) to await further developments at EU level before proposing further amendments to Swiss law. Therefore, it has instructed the administration to only develop adaptation options for now. A decision on how to proceed will be made no later than spring 2026.
Note: New Information Brochure by SwissHoldings and economiesuisse
The new brochure “Corporate Responsibility – Already Exists!” (link DE / FR) provides an overview of current sustainability regulations in Switzerland, highlights international regulatory developments, and presents the broad commitment of Swiss companies in the area of ESG (Environmental, Social, Governance). The aim is to demonstrate that Swiss companies are already making an important contribution to implementing ESG criteria and fulfilling their global responsibility. At the same time, it seeks to strengthen understanding of a targeted approach to sustainability and emphasizes the importance of collaborative solutions between companies, NGOs, and authorities in this context.
Success of the Swiss Sustainability Model
SwissHoldings welcomes the Federal Council’s decision. Pragmatic and internationally compatible regulations are the best way to continue successfully implementing sustainability in the economy. Switzerland has had good experiences to date with its pragmatic and carefully designed sustainability model. The current Swiss model is aligned with global UN and OECD standards but also considers the specific characteristics of the Swiss economy. Within this framework, companies have already made significant progress, particularly in the areas of transparency and due diligence obligations. According to a federal analysis, around 80 percent of large companies and 60 percent of SMEs implement corresponding measures, including risk analyses on human rights, environment, and corruption.
