Switzerland Pauses Climate Rules Amid EU Law Review

Switzerland formally suspended implementation of its updated climate disclosure rules for firms pending receipt of additional information on linked regulatory proposals being prepared in the European Union. The move, publicly announced by the Swiss Federal Council, is another important development in the nation's continued quest to align its sustainability reporting framework with international best practices while achieving regulatory coherence with key trading partners.

The foundation of the initiative lies in the EU's already-in-place "Omnibus" process, a blanket attempt at harmonizing and standardizing corporate sustainability and due diligence rulemaking within the union. The Swiss government explained that its action is deliberate and serves to maintain regulatory equivalence to the EU while gaining competitive parity for Swiss firms competing in the European market. The Omnibus procedure, still in process, will clarify how the EU will adjust its existing sustainability regulations, including those of the Corporate Sustainability Reporting Directive (CSRD) and the affiliated European Sustainability Reporting Standards (ESRS).

Switzerland's climate reporting journey began in 2022 when the Federal Council adopted its first Ordinance on Climate Disclosures. According to this ordinance, major Swiss banks and corporations had to begin providing climate-related information from 2025. These include, among others, greenhouse gas emissions, climate-related risk of finance, and measures taken in order to prevent such risk. The framework was largely influenced by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which has been widely accepted across the world.

But it was only the beginning. Later in December 2024, the Swiss government opened a consultation process to reflect and improve the ordinance. The aim was to include new international trends in climate reporting as well as give scope to companies to fulfill these requirements with commonly accepted standards like those provided by the International Sustainability Standards Board (ISSB) or the ESRS of the CSRD. One of the most important additions to the updated proposals was a call for businesses to create "net-zero roadmaps" — comprehensive carbon-reduction plans to achieve climate neutrality by 2050, in alignment with Switzerland's new Climate and Innovation Act.

March 2025 public consultation on the revisions reflected widespread backing for the new strategy. The consultation window, however, coincided with the start of the EU's Omnibus review. Under such concurrent timelines, the Swiss Federal Council was cautious, directing the Federal Department of Justice and Police to begin preparing possible revisions to wide-ranging corporate governance law, including the requirement for sustainability reporting. The objective, in the opinion of the Council, was to safeguard equitable trading conditions for Swiss companies and prevent duplicate and conflicting regulatory requests.

The Federal Council subsequently formally put off the ordinance amendment until something is clear about the final decisions of the EU on the Omnibus process. The Council also repeated that it will not complete its legislative plan until at least early 2026, once the simplification plans become clearer. The government did the same for its more general initiative on business climate reporting in the interim. The suspension will continue until there is a passed amendment bill, presently expected by January 1, 2027, at the latest.

This delay is a mere balance act of Switzerland — staying true to its net zero by 2050 pledge while not risking its regulatory systems into making Swiss companies competitively at a disadvantage in the global marketplace. While revision process is currently on ice, the administration has not proposed cancellation of climate plans. Rather, it seems set to construct an improved coordinated and internationally harmonized system of corporate sustainability reporting.

The delay may also be reflective of a broader global trend of rewriting climate and sustainability regulation to reduce administrative expense while maintaining environmental commitments. As major economies continue to mature their climate disclosure rules, global coordination will increasingly play a critical role. Switzerland's choice to delay and reassess its own rules based on further news of the EU's action shows a pragmatic and prudent strategy to rule-making.

The moment the EU finalizes its Omnibus amendments, Switzerland is most likely to resume its regulatory update process rapidly with an objective of coming up with a solution that addresses both environmental responsibility and worldwide competitiveness for Swiss firms.