Swiss Council Halts Climate Disclosure Overhaul, Awaits EU Law Alignment

The Swiss Federal Council has resolved to suspend the revising of the Ordinance on Climate Disclosures, which took effect as from 1 January 2024. The move has come in a bid to prevent duplication of rules and provide an opportunity for the country to respond to the new legal environment unfolding in the European Union. The Council assured that subsequent action regarding the ordinance would be suspended at least until early 2026.

Originally enacted to encourage disclosure of business climate intentions and activities—especially in the financial sector—the ordinance requires companies to disclose climate-related goals and risks. It also required the Federal Department of Finance (FDF) to assess Swiss law's level of compliance with international standards and establish minimum threshold level compliance. The imposition is intended to help financial institutions comply with the country's Climate Protection Act goals.

It was in December 2024 that the Swiss government brought about amendments to the ordinance to align the latter with global standards, namely the EU's. The amendments proposed to institute a roadmap for financial institutions to be best equipped to meet sustainability expectations. In an open consultation process, the proposals were broadly welcomed but were complained of as being premature to act prior to revolutionizing the wider legal framework, namely the Code of Obligations.

In March 2025, the Council acted by instructing the Federal Department of Justice and Police to propose more workable solutions for revising the Code of Obligations focusing on corporate governance and sustainability reporting. It is still under review and is now directly correlated with the timing of revisions to EU sustainability reporting requirements.

The government has expressed that it would rather hold off and wait until the EU's new system is finalized before legislating any further. This move has been deemed to be a necessity in an attempt to have Switzerland's rules continue to follow overall European tendencies, particularly in light of the interdependence of financial markets.

So, therefore, the climate disclosure action will remain suspended until at least 1 January 2027. The Council intends to make a final decision in 2026, subject to the speed of EU regulatory updates. The suspension is also meant to prevent duplicative regulation or hasty changes that subsequently require realignment.

The regulation shall remain in its current state until the time that any ensuing amendments are ratified. Stakeholders such as reporting companies and financial institutions are encouraged to continue with existing conformity but remain stand-by for possible changes in line with EU legal development.

This break is not a signal for the climate commitment change in Switzerland but rather a follow-up to international regulatory evolution. The move is administrative and one of bringing consistency and effectiveness into the nation's sustainability policy. 

Source: Swiss Government