Switzerland reworks ESG rules
Switzerland has opened a consultation on a draft Federal Act on Sustainable Corporate Governance that narrows scope and phases in obligations rather than imposing broad new mandates. The move looks intended to align Swiss rules with a lighter, more selective European approach that emphasises materiality and reduces compliance burdens for smaller firms, which matters for cross‑border investors and advisers. (manifest.co.uk)
Switzerland is not copying the tougher sustainability rulebook it floated in 2024. On 1 April 2026, the Federal Council opened consultation on a new Federal Act on Sustainable Corporate Governance and said it would use that bill as an indirect counterproposal to a new Responsible Business Initiative instead of backing the initiative itself. (ejpd.admin.ch) That is a sharp turn from June 2024, when the government proposed expanding sustainability reporting from about 300 companies to roughly 3,500 by lowering the threshold to 250 employees, 25 million Swiss francs in assets, and 50 million Swiss francs in revenue. The 2024 draft also followed the European Union’s broader push at the time. (news.admin.ch) Then Europe changed direction. The European Commission’s Omnibus package said the Corporate Sustainability Reporting Directive should apply only to companies with more than 1,000 employees, and the Corporate Sustainability Due Diligence Directive should focus on the very largest groups. (ec.europa.eu, ec.europa.eu, international-partnerships.ec.europa.eu) Bern had already hit the brakes before this week’s bill. On 25 June 2025, the Federal Council paused work on climate-disclosure changes and said it wanted a more pragmatic rewrite of sustainability reporting after seeing consultation feedback and waiting for the European Union’s simplifications. (news.admin.ch) The new Swiss draft follows that lighter map almost line for line. Sustainability reporting would apply to companies with more than 1,000 employees and more than 450 million Swiss francs in revenue, which outside specialists estimate would leave about 100 Swiss companies in scope instead of around 200 to 230 under the current setup. (esgtoday.com, lalive.law) The due-diligence part is narrower still. It would cover companies with more than 5,000 employees and more than 1.5 billion Swiss francs in revenue, which legal analysts say means roughly 30 of the biggest Swiss groups. (lalive.law, esgtoday.com) Those companies would not just file a glossy report once a year. They would have to check their own operations, controlled subsidiaries, and supply-chain partners for actual or potential harm tied to internationally recognized human rights and environmental standards, then build that work into strategy, risk management, and a code of conduct. (esgtoday.com, lalive.law) Switzerland is also keeping one foot in Europe’s reporting system. Companies caught by the reporting rules would have to use the European Sustainability Reporting Standards or an equivalent standard, which gives investors a better chance of comparing a Swiss filer with a European Union filer without rebuilding the numbers from scratch. (esgtoday.com) The political backstory goes back to a 2020 referendum that won a popular majority but failed because it did not win a majority of cantons. In May 2025, campaigners came back with a new Responsible Business Initiative that asked for broader due diligence, a binding climate plan, liability for harm caused by foreign subsidiaries, and state supervision with sanctions. (ejpd.admin.ch) So this bill is doing two jobs at once. It gives the government a softer answer to the new initiative, and it tells multinationals, asset managers, and advisers that Switzerland wants rules close enough to the European Union to stay interoperable, but narrow enough that smaller firms are not pulled into the net. (ejpd.admin.ch, ec.europa.eu)
