Switzerland

This section provides an overview of the most important regulatory developments related to sustainable finance in Switzerland. [As of: 30 January 2025. The overview is not exhaustive[1].]

It does not claim to be comprehensive and does not represent legal or tax advice.

1) CLIMATE AND INNOVATION ACT (KLG) AND ORDINANCE (KLV) 

2) REVISED FEDERAL ACT ON THE REDUCTION OF CO2 EMISSIONS (CO2 ACT)

3) CORPORATE SUSTAINABILITY REPORTING OBLIGATIONS

4) CORPORATE DUE DILIGENCE AND TRANSPARENCY OBLIGATIONS

5) GREENWASHING – POSITION OF THE FEDERAL COUNCIL OF DECEMBER 2022 AND JUNE 2024

6) SWISS FINANCIAL MARKET SUPERVISORY AUTHORITY (FINMA)

7) SUSTAINABLE FINANCE SELF-REGULATION (PREVENTION OF GREENWASHING)

8) EXAMPLES OF OTHER NON-BINDING RECOMMENDATIONS

1. Climate and Innovation Act (KlG) and Ordinance (KlV)

KIG: 

• Entry into force: 1 January 2025
• Legally binding framework for Switzerland's 2050 climate targets (including emissions reductions)
• Specific reduction targets for the building, transport, and industrial sectors (benchmark values
• Transition plans for companies (Art. 5 KlG) if they want to benefit from financial support
• Financial industry: Climate-compatible alignment of financial flows (Art. 9 KlG)
• Obligation for the Confederation and cantons to take implementation measures (Art. 10 KlG)

KIV: 

• Entry into force: 1 January 2025
• Minimum requirements for roadmaps for companies and sectors (Art. 3-8 KlV) if they want to benefit from financial support
• Promotion of innovative technologies and processes (financial support)
• Financial industry (Art. 30 KlV):
  • Voluntary climate tests
  • Minimum requirements for transition plans: amendment of the Ordinance on Climate Disclosures

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2. Revised Federal Act on the Reduction of CO2 Emissions (CO2 Act)

The revised CO2 Act aims to achieve a halving of CO2 emissions by 2030 primarily through measures implemented domestically; enter into force: 1 January 2025

• Aims to implement the objectives set out in the KIG (Art. 1 CO2 Act)
• Financial market (Art. 40d CO2-Act):
• Obligation for FINMA to assess climate-related financial risks for supervised companies and for the SNB to assess climate-related financial risks for the stability of the financial system
• Regular public report of FINMA and SNB on the results of the assessment on climate risks and any measures taken

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3. Corporate sustainability reporting obligations

Non-financial reporting obligations: Art. 964a-964c of the Code of Obligations (CO)

• In Scope: large companies (≥ 500 FTE)
• In force since 1 January 2022; first reports published in 2024 for the financial year 2023
• Double materiality
• Formal rules for the report
• Reporting on: social issues, employee-related issues, human rights, combating corruption, environmental matters
• Provisions are under revision (public consultation ended in October 2024) with the objective to better align the provisions with the EU-CSRD and to fulfil the climate objectives defined by the Climate Protection Act (KIG)

Ordinance on Climate Disclosures  

• Double materiality
• TCFD recommendations as safe harbour
• In force since 1 January 2024; first reports to be published in 2025 for the financial year 2024
• Under revision: public consultation until 21 March 2025 (minimum requirements for transition plans of financial institution, alignment with the KIG  and the KIV)

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4. Corporate Due Diligence and Transparency obligations

Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour (Art. 964j-964l CO); in force since 1 January 2022

• Reporting and due diligence obligations of undertakings whose seat, head office or principal place of business is located in Switzerland
• Continuous due diligence, establishment of a management system, definition of a supply chain policy and a supply chain traceability system

Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour (DDTrO); in force since 1 January 2022

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5. Greenwashing – Position of the Federal Council of December 2022 and June 2024

Position of the Federal Council of 16 December 2022:

• The Swiss financial market is in need for a uniform and clear understanding of the conditions under which products and financial services can be described as sustainable (point of sale and product level including transparency/reporting). Reasons:
  • Investor protection
  • Financial institutions are exposed to legal and reputational risks without clarity
  • International competitiveness and reputation of the Swiss financial center
  • Switzerland as a leading hub in Sustainable Finance
• Create a basic understanding (principle-based rules, not detailed specifications)
• Create a level playing field for all financial market players and financial products

On 19 June 2024, the Federal Council took note of the progress made by the financial sector in preventing greenwashing and the three main financial association’s new self-regulation measures against greenwashing (SBA, AMAS, SIA). According to the Federal Council:

• Self-regulatory provisions implement various aspects of the Federal Council’s position
• Unresolved issues regarding:
  • Permissible reference framework for sustainability targets and enforceability
  • Compliance with the self-regulatory provisions by applying EU law
• Currently, no proposal on state regulation of the Federal Council
• Re-evaluation of the need for action based on amended EU-SFDR but by the end of 2027 at the latest

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6. Swiss Financial Market Supervisory Authority (FINMA)

Amendment to FINMA Circular 2016/01 Disclosure - Banks and 2016/2 Disclosure - Insurers (Public Disclosure); entry into force on 1 July 2021

• Transparency obligations on climate-related financial risks for large banks and insurers (cat. 1 and 2)
  • Description in business strategy, risk management, governance structure, disclosure of quantitative information (incl. methodology used)
• Based on the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD recommendations) as international standard
• FINMA Guidance 03/2022 Implementation of climate-related risk disclosures by category 1-2 institutions (FINMA findings, inclusion in supervisory dialogue, communication of expected improvements)

FINMA Guidance 05/2021 Prevention of and fight against greenwashing of 3 November 2021

• FINMA's expectations/current practice to ensure investor protection (Art. 12 para. 1 CISA, Art. 35a CISO )
• Transparency: sustainability-related collective investment schemes: fund documents must contain adequate information for investors to make an informed investment decision (see Art. 35a CISO, Annex 6 FIDLEV, Art. 20 and 102 CISA); reporting must have a "high degree" of transparency
• Appropriate organisational structure at the institution level for the management of sustainability-related collective investment schemes (Art. 9 FINIG, Art. 14 para. 2 let. c and Art. 20 CISA)

FINMA Guidance 01/2023 Developments in the management of climate risks of 24 January 2023

• Reference to relevant developments in climate-related financial risk management (BCBS, IAIS)
• Reiteration of the expectation that supervised companies establish appropriate management of climate risks (using best practices)
• Further development of FINMA and its expectations on climate risk management (alignment with relevant international developments

FINMA Circular 2026/1 Nature-related financial risks of 12 December 2024

• Objective: Strengthening risk management (RM) for nature-related financial risks and resilience
• Key focus areas:
  • Governance: Obligation to define organizational responsibilities, tasks, processes, and controls
  • RM: Risk identification and materiality assessment in areas with significant nature-related financial risks
• Addressees:
  • Banks, branches of foreign banks, financial groups and financial conglomerates
  • Insurance companies, branches of foreign insurance companies, insurance groups and conglomerates
• Institutions in categories 3-5: Certain relief measures apply
• Exemptions: Small bank or small insurance regimes as well as FINIA- and CISA-institutions (FINMA recommendation: alignment with this circular)
• Entry into force:
  • Climate-related financial risks:
    • 1 January, 2026: Institutions in categories 1-2
    • 1 January, 2027: Institutions in categories 3-5 (one-year transition period)
  • Nature-related financial risks beyond climate-related risks:
    • 1 January, 2028: For all institutions in scope of the circular
• Climate and other nature-related risks are relevant insofar as they may have significant financial impacts on institutions (financial materiality)
• No double materiality

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7. Sustainable finance self-regulation (prevention of greenwashing)

Swiss Bankers Association (SBA)

• Guidelines for financial service providers on the integration of ESG preferences and ESG risks into investment advice and portfolio management (2023)
• Guidelines for mortgage providers on the promotion of energy efficiency (2022)

Asset Management Association Switzerland (AMAS)

• Self-regulation on transparency and disclosure for sustainability-related collective assets from 29 April 2024 (Version 2.0)
• Circulars on environmental indicators for real estate funds (Circulars 04/2022 and 06/2023)

Swiss Insurance Association (SIA)

• Self-regulation on the prevention of greenwashing in sustainability-related unit-linked life insurance

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8. Examples of other non-binding recommendations

Stewardship

• Swiss Stewardship Code of SSF/ AMAS, October 2023

For non-financial reports of financial service providers:

• TCFD Disclosure – Guidance and Best Practice in the Swiss Context  of SSF/ECOFACT, August 2023

For asset managers:

• How to avoid the greenwashing trap: recommendations on transparency and minimum requirements for sustainable investment approaches and product of AMAS and SSF, December 2021 (DE, FR, EN)
• Sustainable Asset Management: Key messages and Recommendations AMAS/SSF, 16 June 2020 (DE, FR, EN)

For pension funds:

• ESG-guidance of the Swiss Pension Funds Association (ASIP) for Swiss pension funds on how to consider ESG criteria in their investment decisions of July 2022
• ESG-Reporting: Standards for pension funds of ASIP, 2022

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