Three key regulatory developments stand out:

• Non-financial reporting. In June 2024, the Swiss Federal Council initiated a consultation on proposed amendments to the Swiss non-financial reporting rules (Articles 964a et seq. of the Swiss Code of Obligations (CO)). This amendment aims to align Switzerland’s transparency requirements on non-financial matters more closely with European standards, particularly with the European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD). To mitigate potential regulatory overlap between EU and Swiss jurisdictions, the draft broadens the rules to include all public interest companies (e.g., listed entities and those regulated by the Swiss Financial Market Supervisory Authority (FINMA)) and large private companies. It also expands and clarifies sustainability-related disclosure requirements and introduces a mandatory audit or conformity assessment on sustainability information to mirror European requirements. The impact of the recent EU developments, particularly the sustainability Omnibus package, remains to be seen.
• Climate disclosures. The Climate Reporting Ordinance became effective as of 1 January 2024. In a nutshell, it effectively mandates companies subject to mandatory non-financial reporting under Article 964a CO — namely large public interest companies — to base their climate disclosures on the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) (version of June 2017) and its annex, Implementing the Recommendations of the TCFD (version of October 2021), taking due account of the TCFD’s cross-sectoral and sector-specific guidance, as well as, where possible and appropriate, its Guidance on Metrics, Targets, and Transition Plans (version of October 2021). The climate disclosures must also include a transition plan aligned with Switzerland’s national climate targets.
• Emissions targets. Finally, the Climate and Innovation Act (CIA), entered into force on 1 January 2025, establishing Switzerland’s national climate targets, with a net-zero emissions goal by 2050. Intermediate targets call for a 64% emissions reduction between 2031 and 2040 (on average), 75% by 2040, and 89% between 2041 and 2050 (on average). The net-zero objective and intermediate targets apply universally across both public and private sectors, with specific provisions for the industrial, transportation, and construction sectors. The CIA is supplemented by the Climate and Innovation Ordinance (CIO), which further details the minimal contents of transition plans.

In a corporate or commercial context, ESG is generally defined according to Swiss corporate law provisions on non-financial reporting (specifically Articles 964a et seq. CO). These provisions categorise non-financial matters as follows:

• environmental issues, including CO₂ goals;
• social issues, including employee-related matters;
• respect for human rights; and
• anti-corruption practices.

Under Swiss corporate and commercial law, three main frameworks address ESG-related matters in a corporate context: 

• Disclosure on non-financial matters (Articles 964a–964c CO). These rules require large Swiss public interest companies to prepare an annual report on non-financial matters. The report must cover each non-financial matter, detailing the relevant policies, due diligence processes, their implementation, potential risks, risk management strategies, and key performance indicators (KPIs). The report must be approved by the general meeting and made publicly accessible, typically on the company’s website. Notably, there is no audit requirement for this report.
• Disclosure regarding payments to governments for natural resource extraction (Articles 964d–964i CO). Under Articles 964d et seq. CO, Swiss-based companies involved in the extraction of minerals, oil, natural gas, or the harvesting of timber in primary forests (including through subsidiaries) must annually disclose payments made to governments related to these natural resources, where such payments exceed CHF 100,000. Examples include production fees, signing, discovery, and production bonuses, licence and entry fees, and any payments for infrastructure improvements tied to authorisations or concessions.
• Supply chain due diligence and transparency requirements (Articles 964j–964l CO). Swiss law mandates supply chain due diligence and transparency focusing on two primary human rights risks: conflict minerals and child labour. These obligations apply to: 
  • Swiss companies importing or processing tin, tantalum, tungsten, or gold (3TG) originating from conflict-affected or high-risk areas; and 
  • Swiss companies offering products or services where there is a reasonable suspicion of child labour. 

In-scope companies must conduct due diligence across their supply chain by implementing appropriate policies, a traceability system, a comprehensive risk-management plan, and a grievance mechanism. Such companies must also publicly report annually on their due diligence efforts.

Swiss law includes several rules that directly or indirectly address ESG-related themes. Key topics include:

• Gender representations at board and executive management levels. Article 734f CO requires large listed Swiss companies to ensure that gender representation reaches at least 30% on the board of directors (starting in 2026) and 20% on the executive board (starting in 2031). Companies that do not meet these thresholds by the set deadlines must explain the reasons in their remuneration report and outline measures taken or planned to address the shortfall.
• Remuneration rules. Swiss listed companies must adhere to regulations governing remuneration and loans to members of the board of directors, senior management, and, where applicable, their close relatives (Articles 732 et seq. CO). Issuers are required to publish an annual remuneration report covering these topics.
• Economic sanctions. Switzerland’s economic sanctions regime is governed by the Federal Embargo Act, which authorises the Swiss government to impose sanctions through specific ordinances, in line with sanctions ordered by the United Nations (UN), the Organisation for Security and Co-operation in Europe, or Switzerland’s key trading partners.
• Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). Switzerland’s AML/CFT framework is established under the Anti-Money Laundering Act (AMLA), with criminal offences relative to AML/CFT defined in the Swiss Criminal Code (CC), specifically Articles 260 ter, 260 quinquies, 305 bis and 305 ter
• Anti-bribery and corruption. Switzerland’s regulatory framework against bribery and corruption relies on criminal offences outlined in Articles 322 ter et seq. CC, which prohibit both active and passive bribery of public officials and within the private sector. The Unfair Competition Act also plays a role in preventing corrupt practices.
• Unfair competition. As from January 2025, Switzerland’s Unfair Competition Act includes a provision prohibiting climate-related claims or advertisements that lack objective and reliable support.

Currently, environmental cases in Switzerland primarily focus on traditional issues, such as water and soil pollution, typically within administrative or criminal law, with civil cases remaining rare. However, the first climate change litigation cases are starting to emerge.

In 2023, four residents of Indonesia’s Pari Island filed a landmark lawsuit against the Swiss cement producer Holcim, alleging personal rights infringement and tort, marking Switzerland’s first civil climate case. Publicly available information indicates that the plaintiffs seek proportional compensation for climate-related damages on Pari, demand a CO₂ emissions reduction of 43% by 2030 and 69% by 2040 (relative to 2019 levels), and request financial support for adaptation measures on the island.

In 2024, the European Court of Human Rights (ECHR) issued its first climate litigation decision against Switzerland in the case Verein KlimaSeniorinnen Schweiz and Others v. Switzerland (53600/20). The ruling emphasised that to genuinely protect the right to respect for private and family life, states must implement concrete actions to reduce greenhouse gas emissions, a decision poised to influence future legal and policy frameworks.

Looking ahead, the financial sector may also face environmental litigation or regulatory actions. Potential disputes or enforcement cases could arise over breaches of ESG commitments in investment products, particularly if market conditions lead to disappointing returns or challenges in meeting promised sustainability goals.

Soft non-binding laws

Switzerland has a longstanding tradition of favouring a soft law or principles-based approach where feasible and appropriate. This approach also extends to ESG-related matters, where soft law plays a central role in shaping legislative considerations and developments.

Before implementing mandatory non-financial reporting rules and supply chain due diligence requirements, the Swiss government encouraged Swiss-based companies to apply internationally recognised standards to address these areas. Companies that fall outside the scope of mandatory rules are still strongly encouraged to adhere to these frameworks.

Current mandatory non-financial reporting and supply chain due diligence regulations explicitly reference internationally recognised standards, such as the TCFD (for climate reporting), the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (for conflict minerals and metals in the supply chain), the International Labour Organisation (ILO) Conventions Nos. 138 and 182, the International Labour Organisation and International Organisation of Employers (ILO-IOE) Child Labour Guidance Tool for Business (15 December 2015), and the OECD Due Diligence Guidance for Responsible Business Conduct (30 May 2018), as well as the UN Guiding Principles on Business and Human Rights (for addressing child labour risks in the supply chain).

These internationally recognised standards and industry best practices are heavily relied upon by proxy advisors and institutional investors to shape their ESG expectations with respect to Swiss listed companies. 

In the financial sector, ESG topics remain largely governed by industry self-regulation, with only specific areas subject to mandatory rules. This approach particularly applies to sustainability-related client advisory rules, sustainable finance, and greenwashing risks. Reflecting this stance, the Swiss government recently confirmed its decision to hold off on introducing mandatory regulations to address these areas, choosing instead to rely on industry-led self-monitoring for the time being.

National Contact Points (NCPs)

In Switzerland, the State Secretariat of Economic Affairs (SECO), through its International Investment and Multinational Enterprises unit, acts as Swiss NCP for the OECD Guidelines for Multinational Enterprises. It publishes the list of closed and pending cases, along with the results of its mediation, on its website (see www.seco.admin.ch/seco/en/home/Aussenwirtschaftspolitik_Wirtschaftliche_Zusammenarbeit/Wirtschaftsbeziehungen/nachhaltigkeit_unternehmen/nkp/Statements_zu_konkreten_Faellen.html).

In Switzerland, laws, regulations, and obligations related to ESG matters primarily focus on transparency, aiming to incentivise companies to establish processes for measuring and managing their ESG risks and impacts, while rarely mandating the specific processes.

Reporting

Swiss non-financial reporting rules are governed by Articles 964a et seq. CO, along with an implementing ordinance on climate disclosures (see above, Question 1). These rules require large Swiss public interest entities, specifically Swiss listed and regulated companies meeting certain size thresholds, to publish an annual report on non-financial (or ESG) matters (see above, Question 2). This report can either be a standalone document or integrated into the annual report. Climate disclosure requirements, mandated to be part of the non-financial report, are outlined in the Ordinance on climate disclosures (see above, Question 1).

While Swiss law does not strictly mandate a single framework for ESG disclosures, many companies align with internationally recognised standards, such as the TCFD for their climate disclosures and, increasingly, the International Sustainability Standards Board (ISSB). Additionally, the Global Reporting Initiative (GRI) and the United Nations Global Compact (UNGC) are frequently adopted, particularly by larger companies. These frameworks guide companies in both process- and outcome-based reporting, emphasising the quality and comparability of disclosures.

In Switzerland, the focus on ESG has significantly influenced various sectors, each responding to these developments according to its unique industry dynamics, stakeholder expectations, and regulatory landscape. 

ESG investment has gained traction, underscoring an increased awareness of sustainability and responsible business practices. Estimates indicate that ESG investments now represent a significant portion of overall activity, especially in energy, real estate, and private equity. For example, much of the energy sector’s new investment targets renewable projects, while green buildings are increasingly favoured in real estate.

In summary, ESG considerations are reshaping Switzerland’s investment landscape across sectors, driven by regulatory demands, market interest, and the pursuit of sustainable long-term growth.

Private equity

Private equity in Switzerland has seen a growing focus on ESG as investors increasingly demand transparency on sustainability practices. ESG considerations may now be a key part of due diligence and investment decisions, driven by both regulatory expectations and investor preferences. Many private equity firms are actively integrating ESG criteria into their portfolio management, not only to mitigate risks but also to identify value-creation opportunities.

The primary motive for compliance is to align with investor demands, particularly from institutional investors who prioritise sustainable investments. Additionally, private equity firms recognise that strong ESG practices can enhance the long-term value and resilience of their portfolio companies, as well as their reputation.

Asset managers

The asset management industry’s approach to ESG remains largely driven by private initiatives and industry self-regulation, including: 

• the Self-Regulation on Transparency and Disclosure for Sustainability-Related Collective Assets, issued on 29 April 2024 by the Asset Management Association Switzerland (AMAS); and
• the ESG Guidance for Swiss Pension Funds (July 2022) and ESG Reporting Standards for Pension Funds (December 2022), both issued by the Swiss Pension Fund Association (ASIP).

The industry is also facing increased supervisory scrutiny regarding greenwashing risks, particularly following the issuance of Guidance 05/2021 by FINMA, which outlines the regulator’s expectations for managing sustainability-related collective investment schemes at both the fund and institutional levels.

Banks

The Swiss banking sector faces increasing ESG scrutiny, particularly concerning its own sustainability efforts and investments. In addition to being subject to Swiss corporate non-financial reporting requirements, large Swiss banks must adhere to specific FINMA requirements regarding climate-related disclosures and the management of climate-related risks, for instance.

However, addressing bank clients’ investment preferences has presented practical challenges. Sustainability-related client advisory aspects are governed by industry self-regulation, including the Guidelines on the Integration of ESG Preferences and ESG Risks and the Prevention of Greenwashing in Investment Advice and Portfolio Management, issued by the Swiss Bankers Association (SBA). Despite these initiatives, the demand among private clients — whether retail or high-net-worth individuals — for setting strict ESG preferences remains modest for the time being. 

Small and medium-sized enterprises (SMEs)

SMEs in Switzerland are also experiencing the effects of ESG regulations, especially as larger corporations push their supply chains to meet higher ESG standards. While resource constraints can make comprehensive ESG integration challenging for SMEs, many are beginning to adopt ESG practices, recognising that sustainability can enhance competitiveness and expand market access.

SMEs are motivated by the need to meet supply chain requirements, strengthen brand reputation, and access new markets. For some, aligning with ESG standards also opens doors to financing opportunities, as lenders and investors increasingly favour businesses with strong ESG credentials. 

Fashion 

The fashion industry in Switzerland, like globally, is under mounting pressure to improve sustainability, particularly in environmental impact and labour practices. Brands are responding by increasing transparency, adopting eco-friendly materials, and embracing ethical sourcing and fair labour standards. Circular economy principles, such as recycling and upcycling, are also gaining traction.

Key drivers include rising consumer demand for sustainable fashion and the need to meet both national and EU regulations. The industry is also keen to mitigate reputational risks tied to poor ESG performance, aligning with a global shift toward greater sustainability and responsibility.

Travel industry 

The travel industry in Switzerland is increasingly shaped by ESG considerations, especially in environmental sustainability, carbon footprint reduction, and responsible tourism. Swiss travel companies — airlines, hotels, and tour operators — are adopting measures such as carbon offset programs, energy-efficient technologies, and sustainable travel options. Social responsibility, including fair labour practices and local community support, is also a growing focus.

Compliance is driven by both regulatory requirements and consumer expectations, as travellers increasingly seek eco-friendly options. Companies that fail to adapt risk losing market share, and regulatory pressures around carbon emissions and environmental protection further compel sustainable practices. Embracing ESG is increasingly recognised as a way to enhance brand reputation, build customer loyalty, and reduce long-term operational costs. 

Energy industry 

The energy sector in Switzerland faces substantial ESG regulatory impact, driven by the nation’s commitment to reducing carbon emissions and shifting to renewable energy. Energy companies are increasingly investing in renewable technologies and energy efficiency measures to meet both regulatory requirements and rising demand for cleaner energy.

Compliance is largely influenced by mandates like Switzerland’s Energy Strategy 2050, which targets a nuclear phase-out and net-zero emissions by 2050 (see above, Question 1). Additionally, energy companies are motivated by opportunities for innovation and leadership in renewable energy, which can provide a competitive edge.

Real estate industry 

The real estate sector in Switzerland is placing greater emphasis on ESG, focusing on energy efficiency, sustainable building practices, and responsible land use. The industry is adopting green building certifications, improving energy efficiency in new and existing properties, and incorporating sustainability into property valuations.

Real estate companies are driven by regulatory requirements around energy efficiency and building codes, as well as rising market demand for sustainable properties. Environmentally conscious investors and tenants increasingly seek properties that meet high ESG standards, making compliance a competitive imperative.

E-commerce 

E-commerce in Switzerland is addressing ESG challenges by focusing on supply chain transparency, sustainable packaging, and carbon footprint reduction. Companies are increasingly adopting eco-friendly packaging, optimising logistics to cut emissions, and ensuring ethical sourcing.

Key drivers include consumer demand for sustainable, ethically sourced products and the need to meet international sustainability standards. Regulatory pressure related to packaging waste and carbon emissions further motivates these efforts.

As ESG transparency and supply chain due diligence requirements have transitioned from guidelines to set legal obligations in recent years, ESG governance practices have correspondingly strengthened. Many large Swiss companies, particularly those subject to corporate sustainability reporting requirements, have established dedicated board committees to oversee ESG matters. At the executive level, appointing a Chief Sustainability Officer has become increasingly common.

Given ESG’s complex, cross-functional nature, effective governance requires collaboration across multiple departments — such as legal, compliance, procurement, finance, sustainability, marketing, and communications — which can pose unique governance challenges.

In Switzerland, ESG ratings and benchmarks are increasingly central to corporate and investment decision-making. Reliance on these tools has grown substantially as companies and investors place greater emphasis on sustainability and responsible business practices.

ESG rating agencies 

In Switzerland, ESG ratings from agencies like Standard & Poor’s, Moody’s, and Fitch are widely used by companies and investors. These ratings are particularly valuable for large corporations and publicly listed companies seeking to attract institutional investors focused on ESG performance. Beyond assessing risk, these ratings help identify areas for improvement in ESG practices. Swiss companies also use them as benchmarks to align ESG strategies with investor expectations and enhance their market reputation. 

ESG benchmarks 

In Switzerland, ESG benchmarks like the MSCI World SRI Index and Sustainalytics ESG benchmarks are widely used by investors to shape investment strategies and manage portfolios. These benchmarks assess companies’ ESG performance relative to peers and track portfolio sustainability. For companies, inclusion in a reputable ESG benchmark enhances credibility, attracting investor interest and potentially lowering capital costs.

Institutional investors, such as pension funds and asset managers, especially rely on these benchmarks to integrate ESG factors into their investment processes, ensuring portfolio alignment with sustainability goals and enabling impact measurement.

Private companies 

Private companies in Switzerland are increasingly integrating ESG considerations into their business strategies, motivated by the long-term benefits of sustainable practices, such as improved risk management, enhanced reputation, and alignment with investor expectations.

Public companies 

Public companies in Switzerland are actively addressing ESG issues, going beyond regulatory compliance by establishing comprehensive ESG strategies, setting ambitious sustainability targets, and regularly reporting on progress. This proactive approach is often driven by shareholder demands and the need to stay competitive globally.

Both public and private companies have developed robust ESG strategies, including clear goal setting, sustainable business practices, and transparent reporting. There is also a growing trend toward divestment from industries or companies that fail to meet specific ESG criteria, reflecting a broader commitment to sustainability.

Government-owned organisations 

ESG considerations are key in government-owned organisations and those in which the government has a stake. These organisations often try to lead by example, implementing stringent ESG policies and practices to promote sustainability and social responsibility.

ESG agenda 

The ESG agenda in Switzerland is driven by both local and international influences. Local initiatives and regulations play a significant role, while international standards and the expectations of global investors and private shareholders also shape the ESG landscape.

One key challenge in ESG implementation is accessing reliable and comprehensive data. For conglomerates and companies with extensive supply chains, obtaining consistent, accurate data from subsidiaries and downstream suppliers is particularly challenging, compounded by varying data quality and reporting standards across regions.

Environmental metrics, such as carbon emissions and energy use, are generally more quantifiable and standardised, whereas social metrics — like employee well-being and community impact — are more subjective and harder to measure consistently.

Several barriers can hinder effective ESG initiatives:

• Public opinion. Public sentiment can be a double-edged sword; while positive perception can drive ESG efforts, scepticism about the authenticity of initiatives can undermine their impact.
• Reporting costs. ESG reporting costs are often substantial, especially for smaller companies, covering data collection, analysis, and report preparation.
• Availability of ESG data. Inconsistent data standards and the lack of a centralised data repository make it difficult for companies to benchmark their performance and identify improvement areas.

In Switzerland, several prominent organisations play a key role in advancing ESG considerations:

• Geneva Institute of International Relations (GIIR). A leading think tank focused on international affairs, including ESG issues.
• United Nations University Centre for Policy Research (UNU-CPR). Recently established in Geneva, contributing to global ESG research and policy development.
• Swiss Federal Institute of Technology Zurich (ETH Zurich). Renowned for cutting-edge research in sustainability and environmental sciences.

Swiss companies are also increasingly adopting private ESG measurement frameworks, regardless of mandatory reporting requirements:

• Task Force on Climate-related Financial Disclosures (TCFD). Offers comprehensive guidelines on climate-related financial risks.
• Global Reporting Initiative (GRI). Provides a structured framework for sustainability reporting, aiding companies in disclosing ESG impacts.
• Carbon Disclosure Project (CDP). Encourages companies to measure and manage environmental impacts, particularly carbon emissions.

Switzerland has not yet developed its own ESG taxonomy similar to the EU’s Sustainable Finance Taxonomy. However, Swiss regulatory authorities and market participants closely monitor EU developments due to Switzerland’s strong economic ties and commitment to international standards.

Swiss financial institutions and companies often voluntarily align their ESG practices with the EU Taxonomy to maintain consistency and comparability with European counterparts, especially in sustainable finance. Industry groups and associations in Switzerland are also discussing the possibility of creating a Swiss-specific taxonomy or adopting frameworks that complement the EU’s, driven by the growing demand for clear, consistent ESG criteria.

In summary, while Switzerland has yet to establish its own ESG taxonomy, it aligns closely with international efforts, particularly with the EU, and discussions about a potential Swiss framework are ongoing.

Switzerland’s ESG landscape is increasingly informed by EU regulations, largely due to the presence of multinational corporations headquartered in Switzerland with significant EU operations. Even SMEs are indirectly affected through business partnerships within the EU.

As the EU strengthens its legislative framework for ESG, it will be essential for the Swiss government to balance its own regulatory approach — avoiding excessive burdens on market participants while minimising regulatory overlap. Rather than simply mirroring EU rules, Switzerland will need to carefully assess and adapt these standards to its domestic context. For instance, in sustainability reporting, Switzerland is aligning its laws with the EU’s Corporate Sustainability Reporting Directive (CSRD). In supply chain due diligence, the government is closely observing the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) before implementing changes to the rules currently in force. Meanwhile, Switzerland’s preference for self-regulation in sustainable finance reflects a distinct approach, though this may be revisited periodically to ensure it remains effective.

Looking ahead, Switzerland is likely to maintain a flexible and pragmatic approach, selectively aligning with EU standards while adapting them to Swiss market needs. There is also the potential for greater industry collaboration and public–private partnerships to drive innovation in ESG practices. Finally, as investor and public expectations around sustainability continue to rise, Swiss companies may increasingly adopt forward-looking ESG strategies that exceed minimum regulatory requirements, reinforcing Switzerland’s commitment to responsible business practices.