Switzerland Proposes Sweeping Expansion of Corporate Sustainability Reporting to Align with EU Standards
The Swiss government has announced a consultation on new proposals to align its sustainability-related corporate governance rules with international systems, particularly the EU’s Corporate Sustainability Reporting Directive (CSRD) on June 26, 2024.
The proposed amendment (the Draft Amendment ) of articles 964a – 964c of the Swiss Code of Obligations ( CO ) is intended to bring the current Swiss non-financial matter reporting provisions in line with the EU Directive 2022/2464 of December 14, 2022 on corporate sustainability reporting (Corporate Sustainability Reporting Directive, CSRD ). The consultation process lasts until 31 October 2024.
Rather than fully replicate the CSRD, the Federal Council has proposed modifying the existing reporting requirements on non-financial matters under the CO, including by broadening its scope of application, with the effect that more companies will be required to prepare and publish a report on sustainability aspects.
Switzerland currently requires mandatory sustainability reporting for large companies, such as those with more than 500 employees. Similar to the CSRD thresholds, the new Swiss proposal would introduce sustainability reporting requirements to companies with 250 employees, CHF 25 million (€26 million) in total assets and CHF 50 million (€52 million) in sales.
According to the Council, the move would increase the number of reporting companies to around 3,500 from 300 currently. This follows the EU’s CSRD, which expands required sustainability disclosures to over 50,000 companies, up from 12,000, and report on risks relating to the environment, human rights, and corruption, and the measures they are taking to mitigate these risks.
The CSRD took effect from the beginning of 2024 for large public-interest companies with over 500 employees, followed by companies with more than 250 employees or €40 million in revenue in 2025, and listed SMEs in 2026.
In its statement announcing the new consultation, the Swiss Federal Council said that it has “opted for internationally coordinated legislation,” noting that, given the close economic ties with the EU, “both large and small Swiss companies are affected by the new EU rules – directly or indirectly.”
The Council also referenced that the reporting requirements would be stricter, with disclosures covering risks in the areas of environment, human rights and corruption, as well as on the measures taken against them, and a requirement for external assurance.
The Council is considering that companies are given the option to choose either the EU standard, or another equivalent standard for sustainability reporting.
Also, noting the costs of complying with the sustainability reporting requirements, the Council said that it is examining how the government can provide assistance to companies in implementing the new rules.
Acknowledging the recent adoption by the EU of the new Corporate Sustainability Due Diligence Directive (CSDDD), setting out new obligations for large companies to address their negative impacts on human rights and the environment across their value chains. The Council said that it will assess the effects of the new legislation on Swiss companies with an external study later this year, and then determine next steps.
Source:
Explantion by homburger.ch
See Federal Council, ‘Amendment to the Swiss Code of Obligations (transparency on sustainability aspects): Explanatory report on the opening of the consultation procedure’, 25-33 (not available in English)
Federal Council, «Änderung des Obligationenrechts (Transparenz über Nachhaltigkeitsaspekte): Erläuternder Bericht zur Eröffnung des Vernehmlassungsverfahrens», 25-33 (in German)
