Sustainable corporate governance: Federal Council defines further procedure
The Federal Council communicated that it wants to continue to have internationally coordinated regulations on sustainable corporate governance for the protection of people and the environment. A Report on the analysis of the proposals EU directives on due diligence and reporting on sustainability and possible need for adaptation in Swiss law by the federal administration shows how Swiss law differs from the adopted and planned EU regulations and makes an initial assessment of the effects that corresponding EU decisions would have on the Swiss economy. Based on this, the Federal Council has determined the further course of action.
On the one hand, the EU has recently revised the Corporate Sustainability Reporting Directive (CSRD) at the end of November 2022. Thus, in contrast to the current regulation in Switzerland, the EU now requires undertakings with 250 employees to report on the risks of their business activities in the areas of the environment, human rights, and the fight against corruption, as well as the measures taken to address these risks. In addition, the reporting must be audited by an external auditor. Since around 60% of Swiss exports flow into the EU, the Swiss economy will be greatly affected by this EU directive according to the Federal Council’s press release. The Federal Council therefore assumes that there will be a need to adapt the Swiss legislation and has decided to prepare a consultation draft by July 2024 at the latest and to examine its consequences for the Swiss economy.
On the other hand, in February 2022, the EU Commission presented a proposal for a new directive on far-reaching due diligence obligations. However, a decision by the EU is not expected until the course of 2023. In contrast to the CSRD, the Federal Council emphasized that it is not yet foreseeable what the corresponding EU directive on due diligence will look like and what effects it will have. According to the Federal Council, it is therefore not yet possible to reliably assess the possible consequences of a future EU regulation for undertakings in Switzerland and for Switzerland as a business location. However, the Federal Council emphasized that the EU Commission’s proposal for the attention of the EU Parliament and the EU Council of Ministers provides for a third-country regulation. Accordingly, Swiss undertakings would also have to comply with EU regulations if they are active in the EU. To ensure that Swiss undertakings are not placed at a competitive disadvantage, the Federal Council intends to analyse the effects of the future EU directive in depth by the end of 2023.
These are the upcoming dates for our Annual General Meetings:
Thursday, 24 March 2022
Thursday, 23 March 2023