The Swiss government is following in the EU’s footsteps as it recently advanced a new corporate due diligence law. The law mirrors the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) in both scoping and substance. ESG Today summarizes its main provisions in a recent article:
“The due diligence obligations under the proposed law would also apply a CSDDD-like threshold of 5,000 employees and CHF1.5 billion (€1.6 billion), and will require companies to examine if their activities or those of controlled companies or business partners in the supply chain have actual or potential negative impacts on compliance with internationally recognized human rights and environmental standards, and obligate companies to establish a strategy and code of conduct and integrate them into corporate policy and risk management, identify, assess and prioritize impacts, prevent potential impacts and prepare prevention plans, remediate actual impacts, establish complaint and reporting mechanisms, and monitor effectiveness.”
While not in the EU itself, Switzerland’s economy is intrinsically tied to its neighbors. This is a great example of how leadership in sustainability policy can lead to the establishment of international norms. When a major economy adopts sustainability reporting and due diligence laws, economic partners are encouraged to do likewise. However, the reverse is also true. When a major economy takes a step back from ESG, it can trigger a “race to the bottom.” In addition to proposing due diligence standards, Switzerland’s law also relaxes scoping for sustainability reporting within the country. This is a direct consequence of the EU’s omnibus reforms and CSRD scoping reworks.
Our members can learn more about supply chain due diligence laws here.
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