21 November 2025

How Swiss real estate companies can use sustainability as a competitive advantage

  • Articles
  • Legal
  • Governance / ESG
  • Real Estate

New sustainability requirements in Switzerland and the EU are changing the real estate industry. For owners, developers, and asset managers, it is no longer just a matter of complying with environmental regulations or meeting investor expectations. Sustainability performance increasingly determines valuations, financing terms, tenant demand, and long-term competitiveness.

  • Adrian Peyer

    Legal Partner

New sustainability requirements in Switzerland and the EU are changing the real estate industry. For owners, developers, and asset managers, it is no longer just a matter of complying with environmental regulations or meeting investor expectations. Sustainability performance increasingly determines valuations, financing terms, tenant demand, and long-term competitiveness.

Companies that act early can turn regulatory pressure into a strategic opportunity. This article outlines the key legal developments in Switzerland and presents practical steps on how real estate players can turn compliance into a competitive advantage.

Sustainability has become business critical

The regulatory framework in Switzerland is becoming stricter. Climate transition plans, due diligence obligations, CO₂ reduction targets, and energy efficiency standards are evolving rapidly. At the same time, banks, insurance companies, and institutional investors expect credible sustainability information that goes far beyond the minimum legal requirements.

For real estate companies, this means that

  • Financing is increasingly dependent on ESG KPIs.
  • Real estate values correlate with energy and climate performance.
  • Planning and approval procedures are increasingly taking environmental criteria into account.

Nevertheless, many companies still lack sound corporate governance, reporting structures, and long-term remediation strategies that are aligned with the new obligations.

Key Swiss and EU regulations affecting the real estate sector

Below is an overview of the regulatory framework that has a significant impact on the Swiss real estate market, as well as the relevant EU regulations due to cross-border transactions, financing, and investor expectations.

1. Swiss Code of Obligations (non-financial reporting)

  • Large public-interest companies must publish non-financial reports, including information on their climate and environmental performance (CO Art. 964a ff).
  • From the 2024 financial year onwards, climate transition plans that are consistent with Switzerland's net-zero pathway are also mandatory (Art. 3 Ordinance on Reporting on Climate Matters).
2. Swiss Climate and Innovation Act (KIG) – in force since 2024
  • Sets Switzerland's net-zero target for 2050.
  • Creates incentives for building renovations, renewable heating systems, and energy efficiency improvements.

3. CO₂ Act – revised and in force since 2025

  • Stricter CO₂ limits for buildings.
  • Increased incentives for replacing fossil fuel heating systems.
  • Stricter requirements for energy monitoring and emissions reporting.
4. Cantonal building and energy regulations
  • The cantons are introducing increasingly stringent requirements for:
    • Heating systems,
    • Building envelopes,
    • photovoltaic systems,
    • Electric charging infrastructure.
5. EU Directive on Corporate Sustainability Reporting (CSRD) / ESRS
  • Applies to very large Swiss companies that operate in the EU or are listed on the stock exchange there.
  • Creates high reporting requirements, which are now being adopted by many Swiss lenders and investors.
  • However, the scope and requirements of the CSRD are currently being revised.
6. Taxonomy-compliant financing standards
  • Even without direct applicability, the EU taxonomy criteria influence the credit standards and interest margins of Swiss banks.
  • Banks in Switzerland also follow the Swiss Bankers Association's "Guidelines for Mortgage Lenders to Promote Energy Efficiency."
7. Municipal planning and building regulations (building permit procedures)
  • Cities such as Zurich, Geneva, and Basel are integrating sustainability assessments into "density bonuses" and building permits, etc.

What is at stake if real estate companies fail to act?

Swiss real estate players face a growing risk if they fail to adapt:

  • Loss of value of non-renovated properties ("brown discount" or "stranded assets").
  • Restricted access to bank financing, especially for CO2-intensive buildings.
  • Higher insurance premiums or loss of insurance coverage due to climate risks.
  • Competitive disadvantages in finding tenants and in relationships with investors.

Steps to turn Swiss sustainability requirements into competitive advantages

1. Make sustainability a core element of your business strategy

Sustainability is now a driver of profitability and no longer just an additional compliance requirement.

Real estate companies with measurable sustainability goals achieve:

  • better financing terms
  • stronger demand from tenants
  • higher long-term property values

Use the new Swiss climate and reporting regulations as a catalyst for strategic clarity.

2. Identify regulatory risks and opportunities across your entire portfolio

Conduct a structured analysis of:

  • CO₂ footprint of buildings
  • Upcoming cantonal energy regulations
  • Renovation obligations and timelines
  • Climate risks (heat, flooding, landslides, hail, etc.)

This will enable you to prioritize and optimize CAPEX allocation.

3. Secure financing early on – sustainability KPIs determine the conditions

Swiss lenders are increasingly using:

  • Energy efficiency classes
  • CO₂ intensity
  • Renovation paths
  • Taxonomy-compliant data

as criteria for margins, collateral valuations, and loan renewals.

Proactive documentation gives companies bargaining power and reduces long-term financing risks.

4. Building a robust ESG reporting architecture

The Swiss Code of Obligations, the CSRD, and investor expectations require:

  • traceable data
  • digital documentation of building performance
  • Due diligence processes in the supply chain
  • Climate scenario analyses

Companies that invest in reporting systems reduce the risk of greenwashing and related lawsuits.

5. Position yourself for sustainable land development

Swiss municipalities are increasingly awarding development projects and "density bonuses" based on:

  • Climate performance
  • Circular economy concepts
  • Mobility and energy concepts
  • Social integration measures

A mature sustainability strategy and project-related KPIs significantly increase the chances of being awarded a contract.

6. View new building regulations as drivers of innovation

The switch to performance-based building standards (instead of regulations) enables companies to:

  • to differentiate themselves from the competition through technical innovations
  • test new energy systems
  • use flexible, modular construction methods
  • Employ digital twin and data-driven facility management

This differentiation can lead to faster approvals and higher ratings.

7. Early integration of circular construction principles

Key concepts for future-proof buildings in Switzerland:

  • Low-carbon materials
  • Reuse and recycling processes
  • Adaptability and dismantlability
  • Water and gray water management
  • Design for disassembly
  • Scalability of PV systems and storage

Circular economy reduces life cycle costs and strengthens investor demand.

8. Continuously monitor legal developments

Knowledge enables better timing and reduces regulatory risk.

Conclusion: A moment of strategic opportunity

Swiss real estate companies can turn the complexity of regulations into a competitive advantage by acting early, investing in governance, and leveraging performance-driven building innovations. Those that systematically integrate sustainability into their strategy and operations strengthen:

  • Real estate values
  • Financing conditions
  • Risk resilience
  • Access to development projects

The change is not only regulatory in nature - it is also an opportunity to transform the business model of real estate companies.

Our specialized teams in the areas of real estate law, ESG, and Tax would be happy to discuss this with you.
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