26 September 2023

Is your Swiss (Board) Governance ready for the 2024 ESG reporting sign-offs?

  • Articles
  • Compliance
  • Legal
  • Banking / Insurance
  • Governance / ESG

Starting in the new year, board members of major Swiss companies are required to endorse and sign non-financial reports and due diligence reports, with some setting ESG goals; hence, they should comply with new laws and maintain appropriate processes and documentation to avoid legal consequences.


As of 2024, Boards of certain large Swiss companies will need to sign-off the non-financial report as well as reports on the due diligence regarding conflict minerals and child labor. These reports must be approved by the Board and, the non-financial report, also by the General Meeting of Shareholders.

Some companies made public statement about their ESG targets, in particular, around Net Zero targets.

Is your (board) governance up to date to deal with the new legal requirements and to keep up with the announced targets? Do you have adequate processes and documentation in place that allow the Board to discharge their obligations?

They better be, then the consequences of failure are under criminal sanctions for individual board members!


In today's globalized and interconnected world, environmental, social, and governance (ESG) considerations have become fundamental factors in decision-making for businesses. ESG encompasses a wide range of issues, from climate change and human rights to ethical business practices.

While corporate management is under constant pressure to deliver strong financial performance over the short and medium term, board members have a different time horizon. Boards play a critical role in steering companies over the long term. And the ESG challenges confronting companies today will require sustained, long-term action and strategies.

Switzerland, renowned for its robust corporate governance framework, has been proactive in addressing these concerns through its corporate law and its Swiss Code of Best Practice for Corporate Governance, 2023: “Good corporate governance therefore serves the goal of the sustainable interest of the company. It is an essential prerequisite for corporate success and sustainable growth of company value. Sustainable growth of company value is not just in the interests of shareholders as the beneficial owners and/or risk capital providers of the company, but also in the interests of other stakeholders.”

Board Governance and ESG: What model is fit for purpose in your company?

In a study of 2022 by the INSEAD Corporate Governance Center (ICGC) and Boston Consulting Group*, 91 percent of board members said they want to spend more time on strategic reflection about sustainability. Yet 70 percent indicated that their boards are only moderately or not at all effective at integrating ESG into company strategy and governance. In fact, 43 percent of directors said the ability of the company to execute ESG strategies is one of the biggest threats to achieving ESG goals.

*directors-can-up-their-game-on-environmental-social-and-governance-issues-march2022.pdf (insead.edu)

The study states that corporate boards struggle with ESG due to two main reasons: one is the skills gap where board members may not have the necessary ESG expertise. The other is the convergence of the high speed of change and complexity of change in ESG issues.

The study outlines six core board governance models that support the ESG agenda. Models include full integration, appointment of ESG committees, ESG representatives in committee or board champion, and no formal embedding. The study concludes that there is no one-size-fits-all solution.

Kopie von 230809 Template_Auszeichnungen WWL (2)

Six possible board structures. Source: BCG-INSEAD ESG Pulse Check (March 2022). 

Has your board reviewed it skills matrix and board governance with a view to the new disclosure requirements in Switzerland?

Swiss Non-Financial Disclosure:

From the 2023 financial year onwards, public companies, banks, and insurance companies with 500 or more employees and at least CHF 20 million in total assets or more than CHF 40 million in turnover are obliged to report publicly on non-financial matters. As of 2024 in scope organizations also need to disclose on their climate impact, as specified in the ordinance on climate disclosures, which references the Task Force on Climate-related Financial Disclosures (TCFD).

The non-financial report will need to be signed-off by the board and the General Meeting of Shareholders of the company, starting in 2024.

Swiss Due Diligence Obligations:

In addition, the Swiss Code of Obligations introduced due diligence and transparency obligations in relation to minerals and metals from conflict-affected areas and child labour. The requirements and exemptions which apply from the financial year 2023 onwards are specified in an ordinance. Among others, in-scope companies must set up a supply chain policy and management system that ensures traceability. Moreover, due diligence on minerals and metals requires an audit.

Both reports on the due diligence and transparency obligations in relation to minerals and metals from conflict-affected areas and child labour must be signed-off by the Swiss Board.

The European Union's Expanding ESG Regulatory Framework

Switzerland's commitment to ESG principles aligns with the broader international effort to promote sustainability and responsible business practices. An essential element of this global movement is the EU's recent initiatives, which could have implications for Swiss companies operating within the EU. The Swiss Government announced that Switzerland should adapt its legislation to the new EU ESG Regulatory Framework.

  • Corporate Sustainability Reporting Directive (CSRD):

                The CSRD significantly expands the scope of non-financial reporting. It requires large EU-listed companies and some non-listed entities to disclose extensive ESG information, including climate-related data, environmental and social indicators, and information about their supply chain due diligence.

                Swiss companies with substantial operations in the EU or selling products and services within the EU may need to comply with CSRD requirements, thereby aligning their reporting practices with EU standards.

  • Corporate Sustainability Due Diligence Directive (CSDDD):

                The proposed CSDDD is a far-reaching regulation that aims to hold companies accountable for their entire supply chain. If adopted, it would require companies to conduct due diligence on ESG-related risks, including environmental, human rights, and governance issues, throughout their supply chains. This directive could have implications for Swiss companies operating within the EU.


ESG considerations have evolved beyond mere corporate social responsibility; they are now integral to sound decision-making and governance. Switzerland's strong corporate governance framework, as exemplified by the Swiss Code of Best Practice on Corporate Governance, underscores the importance of ESG issues in business operations.

The due diligence obligations regarding conflict minerals and child labor, mandatory under Swiss law, reflect Switzerland's commitment to responsible business practices. Swiss companies must annually assess their operations to ensure compliance with these obligations.

Furthermore, as the EU strengthens its ESG regulatory framework through initiatives like the CSRD and the proposed CSDDD, Swiss companies operating within the EU must stay informed and adapt to these evolving standards and be prepared for future Swiss legislation.

Aligning with these international ESG trends not only promotes sustainability but also enhances the reputation and competitiveness of Swiss businesses in the global marketplace.

In conclusion, ESG is not just a trend but a fundamental aspect of modern governance and being up to date in the (board) governance is essential to contribute to the long-term success of the company.