Switzerland 2026: What the Proposed Corporate Sustainability (due Diligence) Law Means for Companies, a Practical Compliance Guide

Last reviewed: 11 May 2026

Corporate due diligence in Switzerland is about to undergo its most significant expansion in a generation. On 1 April 2026 the Swiss Federal Council published a draft Federal Act on Sustainable Corporate Governance and opened a public consultation that, if enacted, will impose broad human-rights and environmental due diligence obligations on Swiss-headquartered enterprises for the first time. The draft moves Switzerland from its current, sector-limited regime, focused on conflict minerals and child labour, towards a comprehensive Swiss corporate sustainability framework that closely mirrors the EU Corporate Sustainability Due Diligence Directive (CSDDD).

For compliance officers, general counsel and business owners, the consultation period is the window in which to assess exposure, map supply chains and begin the operational changes that the new rules will demand.

Executive Summary: What the April 1, 2026 Draft Changes and Why It Matters

The draft Sustainable Corporate Governance Act represents Switzerland’s response to mounting international pressure, and growing domestic investor demand, for mandatory corporate due diligence rules. In practical terms, it introduces three categories of obligation that go well beyond the existing baseline.

• Mandatory due diligence. In-scope companies must identify, prevent and mitigate adverse human-rights and environmental impacts across their own operations and their value chains, including upstream and downstream business relationships.
• Expanded non-financial reporting. Affected enterprises must publish annual sustainability reports covering due diligence processes, identified risks, remedial actions and outcomes, aligning Swiss ESG reporting obligations with international standards.
• Board-level governance duties. Directors bear explicit responsibility for overseeing due diligence implementation, integrating findings into corporate strategy and ensuring adequate resources are allocated.

According to commentary published by Lenz & Staehelin in April 2026, the Federal Council estimates that approximately 30 Swiss enterprises would fall within the initial scope of the law. However, the practical reach is far wider: mid-sized groups, subsidiaries and any company in the supply chain of an in-scope enterprise will face contractual pass-through obligations.

Three immediate next steps for every Swiss company:

1. Conduct a preliminary scope assessment to determine whether your entity meets the proposed thresholds.
2. Commission a gap analysis comparing current compliance processes against the draft requirements.
3. Brief the board and secure budget for a 12–18 month implementation programme.

Background: The Current Swiss Baseline and How We Got Here

Existing Rules, Art. 964j–l OR and the 2021 Ordinance

Switzerland already imposes limited due diligence and transparency obligations under Articles 964j–964l of the Swiss Code of Obligations (OR). These provisions, which entered into force on 1 January 2022, target two specific areas: conflict minerals (tin, tantalum, tungsten and gold) and products or services involving a reasonable suspicion of child labour. The accompanying Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour, published on Fedlex, sets out the detailed compliance mechanics, including supply-chain traceability, record-keeping and annual reporting.

The existing regime applies principally to enterprises that import or process specified minerals above de minimis volume thresholds, and to companies that offer products or services where child labour is a known sectoral risk. Importantly, these rules do not impose a general duty to conduct human-rights or environmental due diligence across an enterprise’s full value chain. As noted in the SIX Group regulatory handbook, the current scope is intentionally narrow and modelled on the OECD Due Diligence Guidance for Responsible Supply Chains.

International Drivers: The CSDDD and OECD Frameworks

The Swiss draft does not exist in a vacuum. The EU adopted its Corporate Sustainability Due Diligence Directive (CSDDD) in 2024, creating mandatory due diligence obligations for large EU companies and non-EU companies with significant EU turnover. Switzerland’s export-dependent economy, and the concentration of global commodity-trading, private-equity and financial-services operations in Geneva, Zurich and Zug, means that many Swiss enterprises already face indirect exposure to the CSDDD through their EU subsidiaries, customers or financing relationships.

Simultaneously, SECO has been promoting voluntary adoption of the OECD Guidelines for Multinational Enterprises, publishing sector-specific due diligence recommendations for agriculture, extractives and financial services. Fondation Ethos, a major Swiss institutional investor coalition, publicly called for strengthened mandatory due diligence obligations for Swiss companies in March 2025, reflecting growing shareholder pressure. The April 2026 draft can therefore be understood as the Federal Council’s attempt to formalise what leading Swiss companies are already doing voluntarily, while closing the gap with EU rules that could otherwise put Swiss firms at a competitive and reputational disadvantage.

The Draft Federal Act on Sustainable Corporate Governance, Key Elements of Swiss Due Diligence Law

Due Diligence Obligations: Human Rights and Environment

The core of the proposed sustainable corporate governance act is a requirement for in-scope companies to conduct ongoing, risk-based due diligence covering adverse impacts on human rights and the environment. According to analysis published by PwC Switzerland, the draft closely follows the structure of the OECD Due Diligence Guidance and the EU CSDDD, requiring enterprises to:

• Embed due diligence into policies and management systems. Companies must adopt and publish a due diligence policy approved by the board, covering human rights (including labour rights, health and safety and community impacts) and environmental matters (including climate, biodiversity and pollution).
• Identify and assess actual and potential adverse impacts. This extends to the company’s own operations, its subsidiaries and its established business relationships across the value chain, including suppliers, sub-contractors and downstream distributors.
• Prevent, cease and mitigate adverse impacts. Where risks are identified, the enterprise must take appropriate measures. For its own operations this means direct remediation; for business relationships it means leveraging contractual influence, providing capacity-building support and, as a last resort, disengaging from the relationship.
• Track implementation and effectiveness. Companies must monitor outcomes using qualitative and quantitative indicators and adjust their approach accordingly.
• Communicate publicly. Annual reporting on due diligence processes, findings and remediation is mandatory, feeding into the broader non-financial reporting obligations discussed below.

Non-Financial Reporting Obligations, Scope and Content

The draft significantly expands existing Swiss ESG reporting obligations. Where current rules require only limited disclosures on minerals and child labour, the proposed framework mandates comprehensive sustainability reporting aligned with international standards. Commentary from Bär & Karrer notes that the draft draws on elements from both the EU Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) framework.

Reports must cover the company’s governance arrangements for sustainability, the material risks and impacts identified through the due diligence process, the targets set for prevention and mitigation, and the metrics used to track progress. Reports must be published annually, approved by the board and made available to the public.

Governance Duties and Board Responsibilities

A distinctive feature of the Swiss draft is the explicit allocation of governance duties to the board of directors. Directors must ensure that due diligence is integrated into the company’s strategy, risk management and internal controls. The board must designate a responsible member or committee, allocate adequate resources and review due diligence findings at least annually. Industry observers expect this provision to generate significant boardroom activity in the run-up to enactment, particularly around director liability insurance and committee structures.

Who Is Affected by Swiss Sustainability Law, Scope, Thresholds and Cross-Border Considerations

Size and Sector Thresholds

The question of who is affected by Swiss sustainability law is the single most urgent concern for compliance teams. According to Lenz & Staehelin’s April 2026 analysis, the Federal Council estimates that approximately 30 Swiss enterprises would initially fall within the direct scope of the law, based on proposed size thresholds relating to balance-sheet total, turnover and employee numbers. The draft targets large undertakings, those exceeding specified financial and headcount thresholds, reflecting a similar approach to the EU CSDDD’s tiered entry into force.

However, companies operating in designated high-risk sectors (extractives, agriculture, textiles, financial services) may face lower thresholds or sector-specific requirements, mirroring the approach already applied under the existing conflict-minerals regime.

Group Liability and Subsidiaries

The draft introduces group-level obligations. A Swiss parent company that controls subsidiaries, whether domestic or foreign, must ensure that its due diligence covers the entire group’s operations and value chain. This means that a holding company in Zug with operational subsidiaries in emerging markets cannot delegate and forget: the parent bears ultimate responsibility for establishing and overseeing adequate processes at subsidiary level.

Contractual and Supplier Exposure

Even companies that fall below the direct scope thresholds will feel the impact through supply chain due diligence in Switzerland. In-scope enterprises are expected to flow down due diligence requirements to their suppliers through contractual clauses, questionnaires and audit rights. Any Swiss SME or international supplier doing business with an in-scope company should expect to receive new compliance questionnaires and amended contractual terms within 12–18 months of enactment.

Practical Compliance Roadmap, A 12–18 Month Action Plan for Corporate Due Diligence in Switzerland

The consultation period is not a pause, it is the preparation window. Companies that begin now will be materially better positioned when the final text is adopted. The following phased compliance checklist for Swiss companies provides a structured approach.

Phase 1: Board and Governance (Months 1–3)

• Brief the board of directors on the draft Act and its likely timeline.
• Designate a responsible board member or committee for sustainability due diligence oversight.
• Commission a legal gap analysis comparing current compliance programmes against the draft requirements.
• Review and, if necessary, extend directors’ and officers’ liability insurance to cover sustainability governance duties.
• Allocate budget for the remaining implementation phases.

Phase 2: Risk Mapping and Supplier Due Diligence (Months 3–8)

• Map the company’s full value chain, upstream suppliers, sub-contractors, downstream distributors and key business relationships.
• Conduct a risk-based assessment to identify actual and potential adverse human-rights and environmental impacts, prioritising high-risk geographies and sectors.
• Distribute supplier due diligence questionnaires. A sample questionnaire should cover: supplier identification and corporate structure; human-rights policies and labour standards; environmental management systems; sub-contracting practices; and willingness to accept audit and reporting obligations.
• Benchmark against SECO’s sector-specific OECD implementation guidance for operational due diligence standards.

Phase 3: Policies, Contracts and Audits (Months 6–14)

This phase converts findings into binding obligations. Key actions include:

• Draft and adopt a board-approved due diligence policy covering human rights and environmental impacts.
• Update supplier contracts to include due diligence clauses. Sample language should include provisions such as:

Sample supplier due diligence clause: “The Supplier shall implement and maintain a due diligence management system consistent with the OECD Due Diligence Guidance for Responsible Supply Chains and shall, upon reasonable notice, provide the Buyer with access to relevant records, facilities and personnel for the purpose of verifying compliance with this clause.”

Sample audit and right-to-audit clause: “The Buyer reserves the right, at its own expense, to conduct or commission audits of the Supplier’s operations and supply chain to verify compliance with the sustainability obligations set out in this Agreement. The Supplier shall cooperate fully with any such audit and shall promptly remediate any non-conformities identified.”

• Establish grievance and remediation mechanisms accessible to affected stakeholders.
• Implement internal training programmes for procurement, legal and operations teams.
• Conduct initial pilot audits on high-risk suppliers to test the effectiveness of new contractual and operational frameworks.

Phase 4: Reporting and Disclosure (Months 12–18)

• Design the reporting template and data-collection process for annual sustainability reporting.
• Prepare a first draft sustainability report covering governance structure, risk identification, due diligence actions, metrics and targets.
• Engage external assurance providers to review reporting processes (early engagement reduces cost and improves quality).
• Establish a calendar for ongoing monitoring, annual board review and public disclosure.

Sector Considerations and Worked Examples

Commodity Trading, Supply Chain Mapping and Provenance Checks

Switzerland’s commodity-trading sector, centred on Geneva, Lugano and Zug, faces the most immediate exposure under the draft Act. Commodity traders typically operate multi-layered supply chains spanning high-risk jurisdictions. The practical effect will be mandatory provenance documentation, enhanced know-your-counterparty processes and contractual requirements for upstream suppliers to demonstrate compliance with human-rights and environmental standards. Companies already subject to the existing Art. 964j–l OR minerals regime will find the new obligations an extension of familiar processes, but applied to a far broader range of commodities and impact categories.

Private Equity, Portfolio Oversight and Covenant Drafting

Private equity and venture capital firms headquartered in Switzerland will need to consider how due diligence obligations extend to their portfolio companies. Early indications suggest that the draft treats controlling shareholders as bearing responsibility for group-level due diligence. Practically, this means updating investment agreements and shareholder agreements to include sustainability covenants, securing reporting rights from portfolio companies and building due diligence reviews into the investment committee cycle.

FinTech, Data and Indirect Exposure

While FinTech companies may not have physical supply chains in the traditional sense, they face indirect exposure through their business relationships, customer base and the underlying assets they facilitate access to. Payment-processing platforms, digital-asset exchanges and lending platforms should assess whether their counterparties or underlying activities present human-rights or environmental risks requiring due diligence responses. The likely practical effect will be enhanced counterparty screening and updated terms of service.

SMEs, Scaled Compliance

Small and medium-sized enterprises are not the primary targets of the draft Act, but they will feel its effects as suppliers to larger companies. The draft is expected to include a proportionality principle, allowing smaller entities to adopt scaled compliance measures. In practice, this means lighter documentation requirements, reliance on industry-standard questionnaires and the ability to demonstrate compliance through membership in recognised industry schemes. SMEs should prepare for incoming supplier questionnaires and consider proactively obtaining certifications that will satisfy the due diligence demands of their larger customers.

Enforcement, Penalties and Civil Liability Risks Under Swiss Due Diligence Law

Administrative Fines, Supervisory Powers and Civil Litigation

The draft Act is expected to include an enforcement framework combining administrative oversight with civil liability provisions. According to commentary published by PwC Switzerland, the proposed regime envisages administrative fines for non-compliance with due diligence and reporting obligations, supervisory powers for a designated authority to order corrective measures, and, critically, potential civil liability where a company fails to conduct adequate due diligence and an adverse impact materialises. This civil liability dimension is significant: it opens the door for affected parties to bring claims in Swiss courts for damages arising from failures in the due diligence chain.

Practical Steps to Mitigate Enforcement Risk

• Document everything. Maintain a complete audit trail of risk assessments, supplier questionnaires, remediation actions and board decisions.
• Demonstrate proportionality. Show that due diligence efforts were commensurate with the severity and probability of identified risks.
• Engage proactively with stakeholders. A functioning grievance mechanism and evidence of good-faith engagement can serve as a defence factor.
• Retain external verification. Independent audit and assurance of due diligence processes significantly strengthens a company’s defence position.

How the Swiss Draft Aligns With (and Differs From) the EU CSDDD

Many Swiss companies with EU operations already face the EU CSDDD. Understanding the alignment and divergence between the two regimes is essential for efficient compliance.

The likely practical effect for Swiss enterprises is that compliance with the EU CSDDD will cover most, but not all, of the Swiss draft’s requirements. Companies should conduct a detailed mapping exercise between the two regimes to identify any Swiss-specific additions and avoid duplicated effort.

Key Documents, Precedents and Templates

Companies beginning their compliance journey should assemble the following core documentation:

• Board resolution template. A formal resolution confirming the board’s commitment to due diligence, designating the responsible committee and allocating initial budget.
• Supplier due diligence questionnaire. A structured template covering corporate identity, human-rights policies, environmental management, sub-contracting and audit-readiness.
• Annual sustainability reporting checklist. A document mapping draft Act requirements to reporting fields, data owners and approval workflows.
• Sample contractual clauses. Due diligence, audit-right, representation-and-warranty and indemnity clauses for supplier and business-partner agreements.
• Gap analysis template. A structured comparison of existing policies against each obligation in the draft Act, with RAG-status tracking.

Conclusion, Six Immediate Legal and Operational Next Steps for Corporate Due Diligence in Switzerland

The April 2026 draft marks the beginning of a new era for corporate due diligence in Switzerland. Regardless of whether the final text changes during consultation, the direction of travel is clear. Companies that act now will reduce compliance cost, strengthen stakeholder relationships and mitigate the civil liability risks that the new framework introduces. The following six steps should be treated as immediate priorities:

1. Assess scope exposure. Determine whether your entity, or your group, meets the proposed thresholds and will fall within direct scope.
2. Brief the board. Ensure directors understand the governance duties that the draft Act imposes on them personally.
3. Map the value chain. Commission a comprehensive mapping of upstream and downstream business relationships, prioritising high-risk geographies and sectors.
4. Update contracts. Begin drafting due diligence, audit-right and reporting clauses for insertion into supplier and partner agreements.
5. Design the reporting framework. Build the data-collection and disclosure processes now, before mandatory reporting deadlines arrive.
6. Engage legal counsel. Work with experienced commercial and corporate lawyers to tailor the compliance programme to your sector, size and risk profile.

Sources

1. Fedlex, Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour (2021)
2. PwC Switzerland, Swiss Federal Council Moves Toward Alignment of Swiss Sustainability Reporting (April 2026)
3. Lenz & Staehelin, Switzerland’s New Corporate Sustainability Framework: What to Expect (April 2026)
4. Swiss State Secretariat for Economic Affairs (SECO), OECD Sector-Specific Due Diligence Guidance
5. Bär & Karrer, Switzerland’s Proposed New Framework for Corporate Sustainability (April 2026)
6. ESG Today, Switzerland Proposes New Sustainability Reporting, Due Diligence Law (April 2026)
7. SIX Group Handbook, Due Diligence and Transparency Obligations under Art. 964j–l OR
8. Fondation Ethos, Ethos Calls for Increased Due Diligence Obligations for Swiss Companies (March 2025)