02 May 2024

ESG: Switzerland adopts ban on greenwashing

  • Articles
  • Compliance
  • Legal
  • Governance / ESG
  • Regulatory Compliance

With the renewed amendment of the CO2 Act, the Swiss parliament has also amended the Unfair Competition Act (UWG). Anyone who makes statements about themselves, their work or their services in relation to the climate impact caused that cannot be backed up by objective and verifiable data is acting unfairly.

With the renewed amendment of the CO2 Act (Federal Act on the Reduction of CO2 Emissions), the Swiss Parliament has also amended the Unfair Competition Act (UCA; UWG). If no referendum is held by 4 July 2024, the Federal Council will bring the amendment into force on 1 January 2025.

Art. 3 para. 1 UCA will be amended as follows (Art. 3 para. 1 lit. x UCA): In particular, anyone who: ... “makes statements about himself, his works or services with regard to the climate impact caused that cannot be substantiated by objective and verifiable bases.”

By amending the law, Switzerland is stepping up the fight against greenwashing. Under the current law, greenwashing could only be combated on the basis of Art. 3 lit. b UCA (misleading behaviour). According to Art. 3 lit. x UCA, statements about climate impact that cannot be substantiated are now unfair (obligation to provide evidence or proof repectively reversal of the burden of proof).

Various types of information can be used in relation to climate impact:
  • qualitative statements and claims (‘sustainable’, ‘climate neutral’, ‘green’, ‘CO2-free’, etc.);
  • quantitative information (KPIs, CO2 consumption in tonnes, greenhouse gas emissions, offsetting, Scope 1, 2 and 3 figures, measurement of progress, achievement of quantitative targets, statements on climate-related financial risks, etc.);
  • procedural information (description of measures taken to reduce climate impact, success stories, interviews, etc.).

The greenwashing ban applies to different activities and areas of the company. In particular:

  • Large companies that have to publish a sustainability report (report on non-financial matters pursuant to Art. 964b CO; Swiss Code of Obligations) must in future be able to substantiate all statements on climate impact.
  • Companies that voluntarily publish a sustainability report must also be able to prove and substantiate their statements on climate impact objectively and verifiably.
  • Advertising and marketing for products (including financial products) and services
  • Product and service descriptions
  • Use of climate labels
  • Corporate communications

Violations of the UWG can have civil and criminal consequences. Not only competitors, but also customers, professional and trade associations and consumer protection organisations are entitled to take legal action. For example, the Swiss consumer protection organisation has set-up a reporting platform where consumers can report suspected greenwashing.

Recommendation: Companies should raise awareness of the issue of greenwashing and take appropriate measures (integration into risk management and ICS; guidelines or directives; training; concentration of expertise).

Pro memoria: Bluewashing is not covered by the new provision.

Your Team