3.1 Introduction and Current Conditions
The sustainability requirements in Swiss law are not as strict as in EU law. However, in recent years, the Swiss legislature has enacted several ESG provisions to catch up with international developments, especially with the requirements of EU legislation. The say-on-pay rules, which give shareholders a say in management compensation, already came into force ten years ago and set a higher standard than in many other legal systems internationally.
ESG stands for Environmental, Social, and Governance. It is not a defined term in Swiss law and generally refers to corporate sustainability reporting (especially non-financial reporting) and the associated due diligence obligations.
The most important sustainability rules for listed Swiss companies are laid down in the Swiss Code of Obligations (SR 220; CO). Certain obligations are explained in more detail in ordinances to the CO.
The main sustainability obligations for listed companies are explained in the following:
Say-on-pay rules
Diversity
Sustainability reporting
Climate commitment
These obligations are presented in a general and simplified form that is not intended to be exhaustive.