Swiss banks, insurance firms and other large public companies will be required to publish climate-related financial disclosures and transition plans under legislation passed by the country’s Federal Council last week. The measures will apply to companies with over 500 employees and will become mandatory from 1 January 2024.
Disclosures under the new law must be aligned with the recommendations of the Taskforce for Climate-related Financial Disclosures and include all greenhouse gas emissions, as well as emissions targets and the standards, assumptions and methods behind them. Companies will also be required to include climate transition plans that are “comparable with the Swiss climate goals”.
In an acknowledgment of the principle of double materiality, the legislation will require that disclosures cover “both the effects of climate change on companies and the effects of companies’ activities on climate change”. In addition, financial institutions will be obliged to provide “forward-looking, scenario-based climate compatibility analyses”.
However, the new law does offer an opt out in certain circumstances. If a company does not make disclosures on climate issues, it can instead demonstrate that it “complies in other ways” with the disclosure obligation or can “clearly declare that it does not follow any climate concept and justify this decision”. The legislation does not define the term “climate concept”.
The government’s decision on corporate disclosures stands in stark contrast to its position on the climate responsibilities of the Swiss National Bank (SNB). A recent Federal Council report on sustainability and the SNB opposed environmental action, implicitly rejecting calls for the SNB to disclose its investment positions and associated greenhouse gas emissions.
A 2021 study found that assets owned by the SNB are responsible for between 23% and 38% of Switzerland’s domestic CO2 emissions, equivalent to the greenhouse gas emissions of all Swiss households combined.
In accordance with the Paris Agreement’s 1.5°C temperature target, Switzerland has committed to reducing CO2 emissions by at least 50% by 2030 and to achieve carbon neutrality by 2050. However, independent analysis has shown that its climate policies are far from consistent with these targets and that its current emissions trajectory is instead aligned with global heating of between 2°C and 3°C.
This page was last updated November 30, 2022
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