Sustainable development and its reporting are important themes for Swiss companies. In a globalized world, environmental and social requirements are strengthening, which pushes Swiss companies to integrate an increasing number of sustainable practices. Investors and consumers are demanding more transparency and engagement, so sustainability reporting is not only a legal obligation but also a decisive element for reputation and competitiveness.
A true international orientation is required
The Swiss economy needs clean, internationally coordinated regulations regarding sustainability reporting. The Federal Council’s plan to develop existing rules is excessively based on a formalist European directive called the “Corporate Sustainability Reporting Directive (CSRD)”. This project is therefore largely rejected on the grounds that it does not sufficiently take into account the specific economic conditions of Switzerland and the global orientation of many Swiss companies.
Our country must not reduce its room for maneuver in this area by aligning itself exclusively with EU requirements, especially since it is not obliged to do so. Under these conditions, we recommend reviewing the Federal Council’s project. Switzerland must use its room for maneuver in terms of regulations and base itself on global developments. Only then can the best framework conditions be created for globally active companies.
The Swiss economy is strongly interconnected internationally. Many companies operate globally and therefore need to be able to apply international standards. The Federal Council’s proposal only provides apparent flexibility here. Companies must certainly be able to choose between several international standards, but the link established between the IFRS standard (of the International Sustainability Standards Board) and the requirements of the GRI (Global Reporting Initiative) leads de facto to reporting that is much too close European standards (ESRS). This creates a unique “Swiss finish” on an international level.
Sustainability regulations are evolving globally
In recent years, sustainability regulation has gained importance globally. Countries such as the United Kingdom, Japan, South Korea and the United States have implemented systems based mainly on the international standards of the International Sustainability Standards Board (ISSB) and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These approaches are characterized by their flexibility and their focus on the key risks and opportunities for businesses. They offer choices to businesses and aim to create pragmatic solutions for greater transparency, without excessive regulatory pressure.
Sustainability regulation in the countries mentioned has a common core – taking into account climate-related risks and promoting transparency in value chains – but the way in which this is implemented varies considerably.
Switzerland is under no obligation to follow the formalist EU path and adopt regulations such as those on sustainability reporting (CSRD). Bilateral III will not change anything, because the dynamic recovery of the law is clearly limited. On the contrary, Switzerland has the space to adopt a more flexible and pragmatic approach, which meets the needs of its globally active economy and also avoids unnecessary bureaucracy. To achieve this, however, it is necessary to use this margin of maneuver.
