Resilience and Sustainability – Why One Cannot Exist Without the Other

Introduction

In modern corporate management, resilience and sustainability are among the key strategic and legal concepts. Resilience refers to the ability of companies to withstand and adapt to increasingly rapid changes, crises, and uncertainties—from pandemic-related supply chain disruptions to energy price shocks and geopolitical instability. Sustainability encompasses the environmental, social, and economic responsibilities of companies, with the goal of creating long-term, sustainable value that integrates the environment and society. Both concepts are inseparably linked: Sustainability creates the long-term conditions for stability and crisis resilience, while resilient companies are the ones that have the resources and structures to successfully implement sustainability investments and transformations in the first place. Without sustainability, there can be no lasting resilience — and without resilient structures, there can be no effective sustainability.

Today, more and more companies are recognizing this dual role: Sustainability is now regarded as a strategic lever for promoting innovation, efficiency, and resilience. Companies that strategically integrate sustainability into their management strengthen their resilience while simultaneously opening up new opportunities for innovation and competitiveness. Both in the economic and regulatory contexts, it is clear that sustainability is no longer a niche topic but is crucial to the future viability of companies. The growing density of laws and standards — from EU directives on ESG reporting and due diligence obligations to Swiss legislation — highlights the trend that sustainability is becoming an integral part of good corporate governance and risk management. These legal developments aim to firmly embed sustainability in strategic management — and thereby help make companies more resilient to risks.

Legal Developments in the EU and Switzerland

The following outlines key legal developments in the EU and Switzerland that prioritize sustainability and resilience as obligations. Subsequently, the (perceived) tension between sustainability and cost-efficiency is examined. Finally, the discussion explores how companies should effectively implement sustainability and resilience measures to achieve real impact — rather than merely satisfying “check-the-box” compliance.

European Union: CSRD & CSDDD

EU law is setting new standards for sustainability and corporate resilience. With the European Green Deal, numerous ESG regulations were enacted starting in 2019, notably the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). These standards aim to mandatorily integrate sustainability into corporate governance and reporting — in the interest of greater transparency, long-term risk management, and fair competition.

• CSRD – Corporate Sustainability Reporting Directive: The goal of the CSRD is to introduce binding European Sustainability Reporting Standards (ESRS) so that financial markets, civil society, and consumers can better compare companies’ sustainability performance. The reporting requirements cover all ESG dimensions (environmental, social, and governance aspects) and follow the concept of double materiality — companies must demonstrate how sustainability aspects impact their business operations and vice versa. Additionally, an external review (limited assurance) will be established to ensure credibility and quality. For corporate resilience, these rules have two implications: First, sustainability risks (e.g., climate risks) are integrated into corporate reporting and management, which improves preventive risk identification and mitigation. Second, the transparency requirement leads to greater accountability and stakeholder pressure, thereby incentivizing companies to position themselves in a robust and forward-looking manner.
• CSDDD – Corporate Sustainability Due Diligence Directive: The CSDDD aims to require large companies to exercise appropriate due diligence regarding human rights and the environment throughout their entire value chain. Key obligations will include implementing risk management, including risk analysis; adopting policy statements; taking preventive and remedial measures; and establishing grievance procedures. The substantive due diligence obligations will apply to the affected companies starting in July 2029. The objective of the CSDDD is explicitly emphasized in the legislative rationale: better integration of risk analysis and risk mitigation for human rights and environmental risks into corporate strategies and the creation of a uniform framework within the EU single market (level playing field). This is doubly relevant for corporate resilience: On the one hand, these obligations firmly embed preventive risk management into the business model, which helps prevent serious disruptions (e.g., supply chain scandals, production stoppages due to environmental damage). On the other hand, protects companies from liability and reputational risks, as significant sanctions are imposed for violations. The implementation of the CSDDD will thus promote not only compliance but also crisis resilience in the sense of a more robust corporate culture.

Switzerland: Art. 964a et seq. CO and KVI 2.0

Switzerland, too, has significantly further developed its legal framework for sustainability in recent years. In doing so, the Swiss legislature is responding, on the one hand, to domestic political impulses (the Responsible Business Initiative and its new edition) and, on the other hand, aligning itself with international developments, particularly in the EU.

• CO 964a et seq.: Sustainability Reporting and Due Diligence Obligations – In Switzerland, the indirect counter-proposal to the Responsible Business Initiative (RBI) entered into force on January 1, 2022. Articles 964a–964c of the Swiss Code of Obligations (CO) were newly introduced, requiring larger companies of public interest (i.e., publicly traded companies, banks, insurance companies, etc.) to report annually on non-financial matters. The topics covered include the environment, labor issues, social issues, human rights, and anti-corruption. In addition, the Federal Council has issued supplementary ordinances, such as the Ordinance on Reporting on Climate Issues (in force since January 2024), which mandates TCFD-compliant reporting on climate risks. In addition, comprehensive due diligence and transparency obligations regarding conflict minerals and child labor (Art. 964j et seq. CO in conjunction with VSoTr) apply to all companies that encounter conflict minerals or potential child labor. Violations of Swiss ESG obligations are subject to sanctions: Responsible natural persons (e.g., board members) risk fines of up to CHF 100,000 for intentional breaches of reporting obligations.
• “KVI 2.0” – New Initiative and Swiss Outlook: In January 2025, a second Corporate Responsibility Initiative (“KVI 2.0”) was launched. The aim of KVI 2.0 is to introduce more far-reaching obligations—in particular, civil liability for Swiss corporations for damages resulting from a lack of due diligence regarding human rights and environmental violations in the value chain, binding corporate climate targets, and a supervisory authority to ensure implementation. The Federal Council has announced that it will reject this popular initiative and instead draft another indirect counterproposal. In particular, Swiss regulations are to be further aligned with future EU rules to ensure as level a playing field as possible. In April 2026, the Federal Council launched a consultation on the new “Federal Act on Sustainable Corporate Governance” (NUFG), which provides for further adjustments to ESG obligations in Switzerland. The NUFG is largely based on EU and international standards, but with a certain “Swiss touch” (particularly regarding liability). The NUFG is at odds with KVI 2.0: If voters approve KVI 2.0, Switzerland would have to introduce its own stricter regulations, such as group liability—which would fundamentally alter the competitive landscape for local companies in an international context.

Implications: EU vs. Switzerland

The overlapping developments in the EU and Switzerland create a complex regulatory environment for internationally active companies —but they also demonstrate that sustainability is being politically anchored as part of the resilience strategy.

The trend toward stricter sustainability requirements continues unabated in the EU and Switzerland — even though certain simplification measures have since been adopted (European omnibus procedures for postponing or adjusting deadlines and thresholds). However, companies must prepare for persistently high standards. Those who take sustainability seriously and act proactively — rather than waiting to see what happens — will not fall behind, will improve their relationships with investors, customers, and regulatory authorities, and will strengthen their resilience, even in an international context.

Sustainability and Cost Efficiency: Investing in Resilience

In practice, sustainable business practices were long viewed as potentially at odds with cost efficiency: climate protection, social standards, or ecological innovations initially entailed additional costs and were considered a luxury. Today, however, it is becoming increasingly clear that this narrative is short-sighted. Sustainability is not merely a cost driver — it is an investment in efficiency, risk prevention, and future viability:

• Savings and efficiency gains: Many sustainability measures lead to cost reductions, particularly in the medium and long term. Companies that, for example, increase energy efficiency and conserve resources sustainably lower their operating costs. Many companies have reduced their energy consumption to save on energy costs — a classic win-win for both cost and climate goals. Many financial cost benefits of sustainability are now well-documented: For instance, companies with good ESG ratings tend to receive lower interest rates on loans and can meet their capital needs more cost-effectively. Certified climate protection and ESG measures, for example, lower insurance premiums and strengthen equity, which in turn increases resilience to market fluctuations. Sustainability thus often goes hand in hand with cost savings. Reducing resource consumption, minimizing waste, and optimizing usage protects the environment and reduces associated costs.
• Risk reduction and resilience: Sustainable practices reduce business risks and increase crisis resilience. For instance, aligning supply chains with sustainability and diversification reduces the risk of disruptions caused by environmental events, geopolitical conflicts, or legal sanctions. Supply chain resilience is inextricably linked to sustainable procurement and due diligence. Similarly, proactive ESG compliance reduces liability and reputational risks: Companies that proactively prevent environmental damage and human rights violations in their value chain are far less likely to face existential crises due to scandals, fines, or boycotts. Stakeholders reward sustainable commitment, for example through higher customer loyalty, better credit terms, and investor confidence—factors that inevitably have a positive impact on a company’s financial strength and resilience.
• Sustainability as a Value Driver: Last but not least, sustainability boosts innovation potential and competitiveness, which can translate into higher profitability and corporate value in the long term. Sustainable companies anticipate regulatory and market trends (e.g., CO₂ pricing, customer preferences for eco-friendly products) early on and can thus capitalize on market opportunities, while less sustainable competitors are still feeling the costs of being late to the game and the pressure to adapt. This not only makes sustainable companies more resilient to external shocks but also gives them a strategic advantage in financing and market access.

In short: Sustainability creates economic value. It is not a burden, but a means of minimizing risk — and, at its core, an investment in resilience.

Implementation and Impact: Effective Integration Rather Than “Check-the-Box” Compliance

Given the growing regulatory burden in the ESG sector, there is a risk that companies will merely tick sustainability measures off a list to comply with regulations—without bringing about any actual change. Such purely formal “check-the-box” compliance may meet the minimum legal requirements in the short term, but it falls short and can even be misleading: At best, it creates a false sense of security, but it does not tangibly improve a company’s sustainability performance or resilience. Furthermore, the risk of “greenwashing” increases — which exposes the company to reputational risks. Therefore, an integrated, impact-oriented implementation of sustainability and resilience measures is crucial — with a focus on impact rather than merely fulfilling obligations.

The interplay of sustainability and resilience in practice requires:

• Embedding in Governance & Culture: Sustainability and risk management must be “top management priorities.” The board of directors and executive management should actively drive sustainability goals, define clear responsibilities, and report regularly on progress. The requirement in Switzerland for sustainability reports to be approved by the board of directors and the general meeting underscores the need for these issues to be taken seriously and discussed at the highest level.
• Integration into strategy and risk management: Sustainability factors belong in the core risk inventory and strategic planning. Companies should systematically analyze ESG risks and opportunities, integrate them into their Enterprise Risk Management (ERM) processes, and derive preventive measures from them (e.g., supply chain diversification, climate adaptation strategies). In this way, sustainability becomes part of the corporate strategy and actively strengthens resilience.
• Operationalization in processes: Beyond policies on paper, concrete measures and internal controls must be implemented. For example: supplier contracts with ESG clauses (compliance with environmental and social standards), employee training on sustainability guidelines, key metrics & monitoring in day-to-day operations (e.g., regular CO₂ tracking, diversity metrics), and emergency plans (e.g., for raw material shortages or compliance violations).
• Measurability & External Validation: Metrics and audits help make impact visible. Companies should set targets (e.g., emissions targets, diversity quotas) and report transparently to internal and external stakeholders on a regular basis. A voluntary external review of sustainability reports can enhance quality and build trust.
• Willingness to learn & continuous improvement: Resilience also means remaining adaptable. Companies should critically evaluate sustainability initiatives and continuously improve them, rather than simply checking them off once the initial goals are met. Feedback from stakeholders and best practices (e.g., industry-wide cooperation to address ESG issues without violating antitrust laws) can be leveraged to take a more effective approach.

When effectively implemented, sustainability measures deliver real impact: they reduce emissions, improve working conditions, strengthen relationships of trust —and thus the overall resilience of the company. This stands in stark contrast to a purely formalistic fulfillment of ESG obligations, where standards may be met on paper, but actual risks often remain unmitigated. Sustainability as a “strategy” rather than a “mandatory exercise” means recognizing and leveraging its strategic value: it sharpens risk and opportunity awareness throughout the company, fosters innovation (e.g., the development of sustainable products), and generates competitive advantages.

In conclusion, it can be stated that resilience and sustainability are two sides of the same coin. For forward-looking companies, ESG is not merely a compliance issue but a strategic imperative. A company is truly resilient only if it integrates sustainability seriously and effectively—and sustainable success is achieved only by those who manage their companies in a resilient manner. Sustainability without resilience is ineffective; resilience without sustainability is short-sighted. Successful companies recognize that the two are inseparably linked.

How can MME support you? At MME, we bring practical experience in how regulatory requirements can be implemented pragmatically and cost-effectively — from banks and insurance companies to industrial enterprises.

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