The planned EU directive on due diligence obligations could have a direct impact on several hundred companies in Switzerland. This is the conclusion of an external study by the Swiss government.
The popular initiative for responsible companies was rejected at the ballot box on November 29, 2020. As a result, Parliament's indirect counter-proposal came into force on January 1, 2022. Large Swiss companies must report on the risks in the areas of the environment, social issues, employee issues, human rights and combating corruption, as well as the measures taken to counter these risks. Companies with risks in the sensitive areas of child labor and so-called conflict minerals must also comply with special and far-reaching due diligence and reporting obligations.
EU directive on new due diligence obligations affects large and small companies alike
With this regulation, Switzerland has opted for internationally coordinated legislation. However, a new EU directive on new due diligence obligations for companies is about to be adopted. Due to the close economic ties between Switzerland and the EU, both large and small Swiss companies will be affected by this regulation. As the new EU directive has not yet been definitively adopted, it is not yet possible to conclusively assess its impact.
EU directive has an impact on many companies in Switzerland
A study commissioned by the Federal Department of Justice and Police (FDJP) and the Federal Department of Economic Affairs, Education and Research (EAER) has come to the preliminary conclusion that the draft EU directive would have a direct impact on several hundred companies in Switzerland. In addition, there are several thousand companies that could be indirectly affected because the directly affected companies would pass on the requirements to their suppliers.
In-depth analysis to follow
The Federal Council took note of this preliminary result at its meeting on December 22, 2023. The FDJP and EAER will have the study updated as soon as the EU has definitively adopted the Due Diligence Directive. Following this in-depth analysis and observing how the EU member states implement the directive, the Federal Council will decide on how to proceed.
Consultation draft is being prepared
The EU has already decided to further develop the sustainability reporting obligation. To ensure that Swiss law remains internationally harmonized, the Federal Council has instructed the Federal Department of Justice and Police (FDJP) to prepare a consultation draft by mid-2024.
