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Sustainable Finance Regulation – Corporates: Comparative Analysis for Switzerland

Financial market participants depend on accurate data from corporations for assessing sustainable investment opportunities. They are a primary target of sustainable finance regulation, as financiers of the transition, but largely depend on the information disclosed by investee firms. Firms’ disclosures on sustainability thus improve the data available to financial market actors, and thus helps them make informed investment decisions and fulfil their own disclosure obligations.

Regulations on corporate transparency for sustainability matters are being developed across jurisdictions to foster data availability. In the European Union, the regulator enhanced existing disclosure requirements through the Corporate Sustainable Reporting Directive (CSRD). The CSRD requires large and public companies to report information on environmental risks to the firm and the impact of the firm on society and the environment, all along the value chain. In the United States, the Securities and Exchange Commission, which regulates companies with a focus on investor needs, recently proposed disclosure obligations for registrants on climate-related issues, only if they are financially relevant. Both the existing European and suggested American regulations are still being adjusted or developed but the market already underlined some lack of clarity and high related costs. Regulations on due diligence in supply chains complement these transparency requirements through related reporting.

Switzerland is also establishing transparency requirements for sustainability matters. Following modifications in the Swiss Code of Obligations and the introduction of the Ordinance on Climate Disclosures, certain Swiss large companies will have to disclose sustainability-related information for the first time for the accounting year 2023. These obligations are complemented by specific due diligence and reporting obligations for the supply chain of companies active in sensitive industries. Some Swiss industry actors, such as the Swiss Financial Market Supervisory Authority and the Swiss Infrastructure and Exchange, have already put in place sustainability-related disclosures for their registrants.

There is room for enhancing the effectiveness of the Swiss framework, given the current foreign developments, the dependence of the Swiss market and the Federal Council’s objective of making Switzerland a global leader in sustainable finance. Recommendations include (1) enhancing the effectiveness of the corporate disclosure framework through mandatory auditing, binding mechanisms and dissuasive sanctions, (2) enhancing the comparability of disclosed information on sustainability-related information, (3) acknowledging international regulations and their impact on Swiss firms, (4) considering sustainability-related financial risks as well as the impact of firms on the environment and society in disclosure requirements and (5) considering the extension of reporting obligations to small and medium enterprises (SMEs) while providing them with specific assistance.



This E4S Series on Sustainable Finance Regulation investigates regulatory developments in Europe and beyond and discusses the implications for Swiss corporate and financial market actors, regulators, and civil society. Swiss Subsidiary Tradition in Light of Foreign Approaches sets the stage in assessing regulatory objectives and comparing regulatory approaches for sustainable finance across jurisdictions. Corporates: Comparative Analysis for Switzerland compares sustainability-related reporting regulation targeting corporate actors across juris- dictions and provides recommendations for the Swiss context. In a third white paper, Financial Market Participants: Comparative Analysis for Switzerland, the series highlights the specificities and implications for financial market actors.



Sustainable Finance Regulation - Corporates: Comparative Analysis for Switzerland