Switzerland’s Proposed Corporate Sustainability Act: Key Impacts and Implications

Switzerland Proposes Federal Act on Sustainable Corporate Governance: A Strategic Pivot in Corporate Accountability

On April 1, 2026, the Swiss Federal Council initiated a public consultation on the draft Federal Act on Sustainable Corporate Governance (CSA). This proposed legislation represents a significant shift in Switzerland’s approach to corporate responsibility, moving toward stricter standards that align more closely with European Union directives.

The CSA isn’t just a regulatory update; it’s a strategic response to domestic pressure. The act serves as an indirect counterproposal to the second Responsible Business Initiative (RBI 2.0), a movement led by a coalition of 90 civil organizations. While the Federal Council proposes to reject the RBI 2.0, the CSA aims to address the core demands for enhanced due diligence and corporate liability.

Aligning with the EU: CSRD and CSDDD

A central pillar of the proposed CSA is the alignment of Swiss sustainability reporting and supply chain due diligence with EU standards. Specifically, the legislation mirrors the EU Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

By harmonizing these rules, Switzerland aims to reduce friction for companies operating across borders and ensure that Swiss corporate governance meets international expectations. This alignment includes a focus on climate disclosures, where standards like those from the International Sustainability Standards Board (ISSB) are expected to play a critical role in how companies report their environmental impact.

Scope and Impact: Fewer Companies, Higher Stakes

The CSA introduces a “quality over quantity” approach to regulation. While the previous framework affected a broader group of firms, the new proposal narrows the scope significantly:

• Reduced Scope: The number of companies subject to these requirements will drop from approximately 230 to about 100.
• Targeted Entities: The law will focus on the largest Swiss companies, regardless of whether they are listed on a stock exchange.

Although fewer companies will be in scope, those that are will face a much more rigorous regulatory environment. The CSA proposes several high-impact changes for these firms:

• Enhanced Standards: Stricter diligence and reporting requirements.
• Government Supervision: The establishment of government oversight to ensure compliance.
• Sanctions and Liability: The introduction of a new sanctions regime and a potential increase in corporate liability.

Key Takeaways for Investors and Executives

Frequently Asked Questions

How does the CSA differ from the 2022 counterproposal?

The previous counterproposal, which took effect on January 1, 2022, introduced non-financial reporting and sector-specific supply-chain due diligence. The CSA goes further by introducing government supervision, a formal sanctions regime, and broader alignment with EU directives.

Which companies will be affected by the CSA?

The legislation targets the largest Swiss companies, whether they are publicly listed or privately held. The estimated number of companies in scope is approximately 100.

Why is the EU alignment important?

Aligning with the CSRD and CSDDD ensures that Swiss companies remain competitive and compliant when operating within the EU market, providing a consistent framework for sustainability reporting and due diligence.

Looking Ahead

The transition toward the Federal Act on Sustainable Corporate Governance signals that Switzerland is moving away from voluntary or sector-specific guidelines toward a mandatory, supervised regime. For the largest Swiss firms, the focus must now shift toward preparing for enhanced transparency and the legal risks associated with a new sanctions framework. As the public consultation process unfolds, the final version of the CSA will determine the exact boundaries of corporate liability in Switzerland.