Regulations and Legal Requirements for Companies

What Are Swiss Companies Obliged to Do?

As of 1 January 2022, Switzerland implemented new requirements for reporting and due diligence on non-financial matters. These measures aim to strengthen environmental and human rights considerations across the entire supply chain. In January 2021, Switzerland also officially became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD), a private initiative focused on corporate climate reporting. In doing so, Switzerland is aligning its legislation with EU requirements. The new provisions on transparency regarding non-financial matters under Art. 964a to Art. 964c CO (available in German) are largely based on the EU's CSR Directive. It is expected that both the scope of companies obliged to report and the reporting requirements will be expanded in the future.

Which Companies Are Affected?

The reporting obligation applies to companies headquartered in Switzerland with an average of at least 500 full-time positions over two consecutive financial years, and either a balance sheet total of CHF 20 million or revenue of CHF 40 million, also over two consecutive financial years. In addition, there are transparency obligations for commodity companies regarding conflict minerals and child labour along the supply chain (Art. 964j – 964l CO). Companies are exempt if they are controlled by another company that is required to prepare either a report under Art. 964a CO or an equivalent report under foreign law.

What Must Be Reported?

Companies are required to disclose information on environmental aspects, in particular CO2 targets, social matters, employee-related issues, respect for human rights, and anti-corruption measures. The report (available in German only) should describe the current business model, the concepts, measures and due diligence processes applied, and identify the key risks relating to sustainability topics along with how they are managed. If a company does not pursue a concept in relation to one or more of these matters, it must clearly explain and justify this in the report.

How Must Companies Report?

Companies are required to prepare their report every year, either in a national language or in English. The report must be approved and signed by the executive or administrative body. An independent audit, for example by the auditing body, is not required. Publication takes place electronically, and the report should remain accessible for at least 10 years.

From When Must Companies Report?

The regulations apply for the first time to the 2023 financial year. Non-compliance may result in a fine of up to CHF 100,000.

Are Further Obligations to Follow?

It is planned that companies required to report on non-financial matters will also have to disclose the financial risks they face as a result of climate-related activities. Implementation is expected to take place from 2024 through a separate implementing ordinance related to the counter-proposal to the Responsible Business Initiative.