A “green” breakthrough for large Swiss companies: starting from 2024 they will have to submit climate impact reports. The innovation is contained in the implementing ordinance adopted by the Federal Council in late 2022.
The ordinance requires large Swiss companies to implement in a binding way the internationally recognized recommendations of the TCFD, Task Force on Climate-related Financial Disclosure.
Legislative pressure on integrating environmental, social and governance (ESG) factors into business strategies and processes is growing day by day. Regulators are heavily involved in setting a “green agenda.”
Sustainable development requirements have thus entered the financial services sector as well. Indeed, listed companies, banks and insurance companies with more than 500 employees, a balance sheet value of at least 20 million francs or a turnover of more than 40 million francs will be affected by this new directive.
In order to give affected companies enough time to implement the new provisions, the Federal Council has decided that the ordinance will come into effect starting next January 1, 2024.
From that date, companies will be required to publish a report on climate issues. The reporting will include both data on the financial risk the company incurs when it pursues climate-affecting activities and detailed information on the specific climate impact those activities generate.
Reports should also describe reduction targets for direct and indirect greenhouse gas emissions, and how the company plans to implement them.
“Large companies’ transparency on the climate impact of their activities is a key aspect for the markets to function well and for climate sustainability in the financial sector – has pointed out the Federal Council in a note – . To date, Switzerland has lacked clear and comparable climate-related disclosures. With the new ordinance, the Council aims to change this state once and for all”.
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