Sustainable corporate governance: Swiss companies affected by future EU due diligence obligations
On 29 November 2020, the popular initiative for responsible companies was rejected at the polls. Consequently, on 1 January 2022, the indirect counter-proposal of the Swiss Parliament was implemented. Since then, it is mandatory for major Swiss corporations to disclose the risks associated with environmental concerns, social issues, employee welfare, human rights, and anti-corruption efforts, alongside the corresponding preventive measures implemented to mitigate these risks. Additionally, businesses exposed to the perils of child labour and so-called conflict minerals are obligated to adhere to extensive and unique due diligence and reporting requirements.
Thus, Switzerland has adopted legislation that is in accordance with international standards of harmonisation. However, a new EU Directive, the Corporate Sustainability Due Diligence Directive (CSDDD), is about to be adopted. Because of the strong economic connections between Switzerland and the European Union, this directive will impact Swiss companies of all sizes according to the Federal Council. As the final version of the CSDDD has not yet been established, a definitive evaluation of its effects is not yet possible.
Preliminary findings of an external study commissioned by the Federal Department of Economic Affairs, Education, and Research (EAER) and the Federal Department of Justice and Police (FDJP) indicate that the CSDDD would directly affect hundreds of Swiss companies. Moreover, thousands of businesses may be indirectly impacted because of the direct-affected businesses transferring the necessary specifications to their suppliers.
As stated in a press release, the Federal Council noted this preliminary result during its meeting on 22 December 2023. The study will be revised by the FDJP and EAER once the EU has formally adopted the CSDDD. Following this in-depth analysis and observing how the EU member states implement the directive, the Federal Council announced that it will decide on how to proceed.
The EU has already decided to further develop the sustainability reporting obligation. To ensure that Swiss law remains internationally harmonised, the Federal Council has furthermore instructed the FDJP to prepare a consultation draft by mid-2024 as the press release states.
These are the upcoming dates for our Annual General Meetings:
Thursday, 21 March 2024
Thursday, 20 March 2025