From 2024, key commercial entities required to comply with the ordinance’s specifications for climate-related disclosure
In late November 2022, an implementing ordinance was adopted intending to increase comparability of corporate climate disclosure in Switzerland, by making large Switzerland-based companies required to report on climate-related matters in a more harmonized manner. With the new ordinance entering into force on January 1, 2024, in just under a year, Switzerland will join global efforts towards greater alignment in climate reporting practices.
In line with the recommendations of the G20-mandated Task Force on Climate-related Financial Disclosures (TCFD), the Swiss government approved an ordinance specifying that large companies of public interest are obligated to report on climate-related matters in their non-financial reporting. Guided by trends in non-financial reporting in the European Union and beyond, the new ordinance includes the concept of double materiality. Double materiality means that a reporting company must consider two perspectives in its public climate-related reporting: first, the effects that climate change have on the company’s business activities, and second, the impact that the company’s business activities have on the climate. Furthermore, it requires Swiss companies to also describe the specific emission reduction targets intended for its direct and indirect greenhouse gas emissions, as well as how they plan to implement the targets named.
According to a statement from the Swiss government seat in Bern, the ordinance will specifically affect public companies, banks and insurance companies with 500 or more employees which have over CHF 20 million in assets or at least CHF 40 million in annual turnover.
Sound advice on the new regulations
Over the next several months, qualifying companies in Switzerland are expected to respond to the new regulations by firming up numbers and targets as well as drafting implementation plans on paper, which First Climate sees as part of constructive measures to advance increased transparency and environmental responsibility. “Swiss companies must also consider that these regulations are not set in stone and may further evolve and tighten, especially considering the current developments in the EU where the adopted Corporate Sustainability Reporting Directive and the currently developed European Sustainability Reporting Standards will bring about a new level of content and granularity in ESG reporting,” says Jonathan Schwieger, Co-Head of Consulting/Corporate Climate Strategies.
To give affected entities sufficient time to prepare the required disclosures, the Swiss government has stated that the new ordinance will not go into effect until the beginning of 2024. First Climate invites interested parties to contact our Swiss-based consulting team at zurich@firstclimate.com to start laying the groundwork for reporting and planning now, in time for the first reporting year. The expert First Climate consulting team is available as a competent partner to all companies concerned.
