The Swiss government has introduced a draft Federal Act on Sustainable Corporate Governance, proposing enhanced requirements for sustainability reporting and due diligence for large companies.
The proposed legislation aims to align Swiss regulations with recent EU frameworks, particularly the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). It focuses on larger companies, requiring them to follow internationally recognized reporting standards while narrowing the scope of entities subject to these obligations.
This proposal comes after the EU’s “Omnibus I” revisions, which significantly reduced the scope of sustainability regulations. Key changes included raising the CSRD threshold from 250 to 1,000 employees (with at least €450 million in revenue) and limiting the CSDDD to only the largest companies, defined as those with 5,000 employees and €1.5 billion in revenue.
Currently, Switzerland mandates sustainability reporting for companies with over 500 employees, covering environmental, social, human rights, and anti-corruption topics. Its climate disclosure rules—aligned with TCFD recommendations—also apply to companies of this size, requiring reporting on emissions, risks, and transition plans. Existing due diligence requirements are limited to high-risk areas such as child labor and conflict minerals.
Under the new proposal, sustainability reporting requirements would apply to companies with at least 1,000 employees and CHF 450 million in revenue, reducing the number of covered companies from around 200 to approximately 100. These companies would need to report in line with the European Sustainability Reporting Standards (ESRS) or equivalent frameworks.
The proposed due diligence rules would apply to companies with at least 5,000 employees and CHF 1.5 billion in revenue, impacting roughly 30 companies. These firms would be required to assess and address potential and actual impacts on human rights and environmental standards across their operations and supply chains. Obligations would include implementing strategies and codes of conduct, integrating them into risk management, identifying and prioritizing impacts, preventing and mitigating risks, remediating harm, establishing grievance mechanisms, and monitoring effectiveness.
