Navigating the CSRD: A Swiss SME’s Guide to Sustainable Reporting

Sustainability reporting should begin with a strategic decision. For Swiss SMEs—especially those not legally required to report—choosing to engage in ESG disclosure is often voluntary, yet increasingly important for long-term competitiveness. Rather than treating reporting as a stand-alone compliance exercise, leading SMEs embed sustainability into their core strategy and governance from the outset.

This means using sustainability data not only to meet stakeholder expectations, but also to inform key business decisions—whether in risk management, product development, financial planning, or investment strategy. The first step is board and executive-level commitment: governance structures should reflect ESG ambitions through clear responsibilities, oversight mechanisms, and regular performance reviews. Additional governance mechanisms may include:

• establishing a dedicated ESG committee
• linking executive incentives to sustainability objectives
• obtaining third-party assurance for ESG disclosures
• ensuring ESG expertise at board level
• or amending their bylaws to define social and environmental objectives alongside profit (as required, for instance, by the B Corp certification).

Starting with this strategic alignment ensures that sustainability efforts are not siloed, but fully integrated into operations and decision-making. Over time, this enables SMEs to shift from a reactive posture to a proactive one—anticipating regulatory shifts, capturing new market opportunities, and strengthening stakeholder relationships.

With strategic commitment in place, the next step is to clarify regulatory obligations (e.g. the Swiss Code of Obligations, sector-specific laws, or CSRD criteria if relevant) and assess the expectations of key stakeholders such as clients, employees, investors, or business partners. This involves a combination of research and stakeholder engagement to clarify ESG expectations.

Even without a legal obligation, your company may face implicit reporting expectations through market dynamics and stakeholder relationships. Understanding these expectations early helps you identify relevant ESG topics and lays the foundation for developing credible transition plans, robust data management, and meaningful reporting content. Not every SME will conduct a full materiality assessment—but engaging in early dialogue with stakeholders helps shape priorities and reporting focus as your sustainability journey evolves.

• Start with your eligibility and exposure: Determine whether the company is currently subject to any non-financial reporting mandate in Switzerland. For most SMEs with fewer than 500 employees, no formal obligation exists. However, voluntary reporting may still be strategically valuable. Does the company have operations in the EU or listings that bring the CSRD directly into play? If unclear, refer to the CSRD scope criteria in Section 2.2 as a checklist. It’s also important to monitor upcoming regulatory developments.
• Engage stakeholders: Consult major clients or investors to understand what ESG information they expect. Some larger customers may already require compliance with supplier codes of conduct or sustainability questionnaires—which may ultimately be replaced by the European VSME standard. Internally, employees may also have expectations or suggestions—such as interest in the company’s position on climate action or diversity—and may value increased transparency. Taking everyone along in the transformation journey is essential for a successful sustainability transition. Annual sustainability reports can serve as a trigger for learning from peers and encouraging ongoing exchange across internal departments and hierarchies. Additionally, when engaging with major clients and business partners, clarify industry-specific considerations. For example, the Responsible Care® program provides ESG guidance in the chemical industry. Other industries may offer codes of conduct, voluntary pledges, or ESG disclosure platforms that are relevant and widely used.

This analysis helps determine whether sustainability reporting is already an implicit requirement—even in the absence of legal mandates—through financing incentives, contracting practices, client demands, or investor expectations. It also clarifies what type of information may be expected in practice. In this context, SMEs should proactively engage with stakeholders —such as clients, investors, banks, employees, suppliers, and business partners—to understand their sustainability concerns and priorities. Early dialogue helps shape credible transition plans, strengthen risk and data management, and inform relevant reporting content. For larger or more advanced SMEs, this process can also lay the groundwork for a more structured materiality assessment over time.

Selecting a reporting standard brings structure, comparability, and credibility to the ESG reporting process. While Swiss non-listed SMEs are not legally required to follow a specific framework, adopting a recognized standard—such as the VSME or GRI—can provide much-needed guidance and help align reporting practices with stakeholder expectations.

A key factor in selecting a framework is understanding the intended users of the report. If the primary users are capital providers—such as banks or investors—frameworks focused on financial materiality, like the ISSB standards, may be most appropriate. If the audience includes non-financial stakeholders—such as NGOs, employees, or civil society—the GRI Standards offer strong guidance through their focus on impact materiality. Where both financial and non-financial stakeholders are relevant, the ESRS (European Sustainability Reporting Standards) provide a comprehensive solution based on double materiality. Meanwhile, the VSME standard has been specifically designed to meet the needs of SMEs responding to ESG information requests from larger clients, lenders, or partners—making it especially relevant for value chain integration.

In parallel, SMEs should assess which standards are already used or expected by key business partners. Aligning with these expectations can streamline communication, reduce duplication, and ensure the SME speaks the same “language” as others in its ecosystem. Certifications and programs such as EcoVadis, B Lab’s Swiss Triple Impact (STI), or EcoEntreprise can also serve as practical entry points for SMEs beginning their sustainability journey.

For SMEs with cross-border exposure—particularly those embedded in EU supply chains—alignment with the VSME or even selected elements of the full ESRS Set 1 may become increasingly important. Choosing a recognized framework also facilitates external assurance and improves the comparability of ESG data across companies and sectors. Some SMEs may prefer a ‘light’ version or a modular approach, beginning with simplified frameworks and gradually expanding as they gain experience.

Once the reporting framework and key topics at both the sector and company levels have been identified, the next step is to take stock of the company’s existing data landscape. This process is essentially a gap analysis. Key questions may include:

• What HR, environmental, or governance data are already being tracked?
• Are existing systems (e.g. Enterprise Resource Planning (ERP), accounting software) usable for sustainability reporting?
• What supplier or value chain data is realistically accessible?

This step provides a clear overview of internal data and systems and highlights which additional data needs to be collected to support ESG reporting efforts efficiently.

Not all ESG topics are equally relevant to every SME. To avoid reporting fatigue, companies should prioritize material topics—meaning those that are particularly important from stakeholder and shareholder perspectives. Depending on the company’s size, resources, and ambition, this may involve either a full double materiality assessment—required under ESRS Set 1 to identify both impact and financial materiality—or a simplified applicability analysis, as proposed in the VSME standard, which helps determine which ESG topics are relevant for the company to report on. The goal is to identify the topics that truly matter for the company and its ecosystem.

This step also offers an opportunity to identify the company’s most relevant impacts, risks, and opportunities (IROs).Impacts refer to the company’s positive or negative effects on the environment, workers, communities, or human rights—whether direct or indirect. Risks may be physical (e.g. extreme weather), transition-related (e.g. regulation, market shifts), or reputational. Opportunities might include ESG-driven innovations, improved access to finance, or entry into new markets.

Stakeholder input is essential to validate the relevance of selected topics. This step ensures that reporting efforts focus on the ESG issues most significant to the company and its ecosystem—including impact materiality (effects on people and planet) and financial materiality (risks and opportunities affecting the business).

With the foundations in place, the SME can move forward with implementing its ESG reporting process. This phase begins with structuring data collection, validation, and internal analysis processes. It can involve the development of internal ESG policies, assigning responsibilities across departments, and creating dashboards or templates to track performance over time. Depending on its maturity, the company may transition from ad hoc spreadsheets to more structured reporting tools or ESG software. Employees may also require targeted training to ensure consistent data handling and understanding of key ESG concepts.

To support future assurance or audit-readiness, SMEs may also begin documenting data sources, calculation methods, and internal controls. Clear traceability of reported information enhances credibility and enables continuous improvement. Once sufficient data has been collected and processed, the SME can proceed to draft and publish its sustainability report. Even if not legally required, preparing the report in line with recognized frameworks—such as the VSME—improves clarity and comparability for stakeholders.  Participating in supportive programs and certifications, such as Blab, EcoVadis or EcoEntreprise can also strengthen the credibility of the report and demonstrate early ESG readiness to clients, investors, and financial partners.

Sustainability reporting is not a one-off exercise. Once the first report is published, companies should view it as the starting point of a continuous improvement cycle. This includes gathering feedback from internal teams, external stakeholders, and assurance providers to identify where data quality, disclosure scope, or performance tracking can be strengthened.

A key part of this process is staying alert to regulatory developments. ESG reporting requirements continue to evolve—as illustrated by the Omnibus package—and new obligations may arise as EU or Swiss frameworks are updated. SMEs should monitor these changes closely to anticipate and integrate them early.

As regulations evolve and stakeholder expectations shift, new data points or assurance requirements may emerge.Maintaining flexibility and responsiveness is therefore essential. Each reporting cycle becomes an opportunity to refine internal processes, update key performance indicators, and broaden ESG coverage in line with evolving strategic objectives. By embedding sustainability into core strategic planning and company culture—rather than treating it as a stand-alone obligation—Swiss SMEs can build long-term resilience, enhance their competitiveness, and seize new market opportunities, rather than being caught off guard by future regulatory or client demands. Figure 2 summarizes the process described in this section.