Switzerland 2026: Practical Checklist for Boards, Swiss Sustainable Corporate Governance Act 2026

Last reviewed: May 4, 2026. This article will be updated when the consultation period closes or after any official legislative change.

On 2 April 2026, the Swiss Federal Council published the preliminary draft of a Federal Act on Sustainable Corporate Governance, known in German as the Bundesgesetz über die nachhaltige Unternehmensführung (NUFG), and opened a public consultation that runs through 9 July 2026. The Swiss Sustainable Corporate Governance Act 2026, if enacted, will impose mandatory risk-based human rights and environmental supply chain due diligence obligations on large Swiss undertakings, significantly expand non-financial reporting requirements, and create new enforcement mechanisms that directly affect directors’ personal liability exposure. For boards, general counsel and compliance officers, the window between now and the consultation deadline represents a critical planning period.

This practical guide provides the step-by-step legal checklist that every in-scope company should be working through today.

Executive Summary, What Boards and GCs Must Know Right Now

The draft Swiss Sustainable Corporate Governance Act 2026 introduces two parallel regulatory streams for affected companies: comprehensive sustainability reporting obligations and mandatory supply chain due diligence duties. Both streams build on the existing provisions in the Swiss Code of Obligations that have required certain reporting and due diligence since 2022, but the new draft substantially widens their scope, deepens their substance, and aligns Switzerland more closely with the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).

The draft is framed as an indirect counterproposal to the Responsible Business Initiative and represents the Federal Council’s effort to strengthen the protection of human rights and the environment while, according to SECO, easing the burden on SMEs through tailored lighter obligations and exemptions. Industry observers expect the practical effect to be a significant compliance uplift for large companies, listed entities and any business with material exposure to complex supply chains, including commodity traders and private equity portfolio structures.

Boards and general counsel should take the following five immediate steps:

• Scope assessment. Determine whether your entity meets the draft’s size thresholds (turnover, balance sheet total, headcount) or falls within a specifically regulated sector such as conflict minerals or child labour risk.
• Board briefing. Schedule a dedicated agenda item at the next board meeting to brief all directors on the draft’s obligations, consultation timeline and potential liability implications.
• Supplier mapping. Begin an initial tier-one and tier-two supplier inventory, identifying geographies and sectors with elevated human rights or environmental risk.
• Gap analysis. Benchmark current reporting and due diligence practices against the draft’s requirements, identifying gaps in data collection, internal controls and external assurance readiness.
• Consultation response. Evaluate whether your company or industry association should submit comments during the consultation period before 9 July 2026.

What the Draft Act Says, Scope, Thresholds and Who Is in Scope

The preliminary draft of the Swiss corporate governance draft 2026 addresses two distinct categories of obligation: non-financial reporting and corporate due diligence. Not every company faces both sets of requirements, the scope depends on entity type, size and sector.

The draft targets Swiss undertakings that meet defined quantitative thresholds as well as entities that engage in activities carrying specific regulatory risk. According to Baker McKenzie’s April 2026 analysis, the draft requires Swiss undertakings to comply with supply chain due diligence and reporting obligations if they place tin, tantalum, tungsten, gold or certain other minerals and metals on the market, or if they offer goods or services in relation to which there is a reasonable suspicion of child labour in the supply chain, requirements that carry over and expand from the existing Code of Obligations framework.

Entity Types and Thresholds

SECO’s summary of the draft explicitly notes that the new law on sustainable corporate governance strengthens protection of human rights and the environment while easing the burden on SMEs. Industry observers expect this to mean proportionate reporting carve-outs and simplified due diligence expectations for smaller entities, though SMEs that supply larger in-scope companies may face contractual compliance demands cascading down through supply chain agreements. The distinction between reporting and due diligence obligations is critical: a company may be in scope for one stream but not the other, depending on its activities, size and sector.

Directors’ Duties, Governance and Liability Under the Swiss Sustainable Corporate Governance Act 2026

The draft fundamentally expands the governance responsibilities of directors and boards. Under existing Swiss law, the board of directors already holds certain non-delegable duties under Article 716a of the Code of Obligations. The proposed legislation layers sustainability oversight onto this existing framework, making the board explicitly responsible for the design, implementation and monitoring of due diligence processes and for the accuracy of sustainability reporting.

How Duties Change, Duty of Care, Oversight and Strategic Integration

Under the draft, directors face a broadened duty of care that specifically encompasses sustainability risk. Boards will be expected to integrate human rights and environmental considerations into corporate strategy, not merely as a reporting exercise, but as an operational governance function. The likely practical effect will be threefold:

• Active oversight obligation. The board must demonstrate that it has established and regularly reviewed a functioning due diligence system. Passive reliance on management representations will no longer satisfy the standard of care.
• Strategic integration requirement. Sustainability risks must be incorporated into risk management frameworks, investment decisions and strategic planning. Board minutes should reflect substantive discussion of these topics.
• Competence expectation. Early indications suggest that directors will be expected to possess, or have access to, sufficient expertise to evaluate sustainability risks, potentially requiring the appointment of specialist advisers or the creation of dedicated sustainability committees.

Liability Exposure and Enforcement Mechanisms

The draft introduces enforcement mechanisms that go beyond the existing comply-or-explain framework. While the final shape of penalties will depend on the parliamentary process, the preliminary draft contemplates:

• Administrative sanctions. Competent authorities may impose fines for non-compliance with due diligence and reporting obligations.
• Civil liability. Directors who fail to discharge their sustainability oversight duties with the required standard of care may face personal liability claims, in addition to existing liability under Article 754 of the Code of Obligations.
• Injunctive relief. The draft appears to contemplate the possibility of regulatory orders requiring companies to implement specific remedial measures where due diligence deficiencies are identified.

Industry observers expect that the combination of administrative sanctions and civil liability provisions will create a materially higher risk profile for directors than the current regime, particularly for boards that cannot demonstrate documented compliance efforts.

Practical Governance Changes, Committees, Delegated Authorities and Escalation

Boards should consider the following governance architecture changes in response to the draft:

• Sustainability or ESG committee. While Swiss law does not currently mandate specific board committees, the practical compliance burden of the draft strongly favours establishing a dedicated sustainability committee with a clear charter, reporting line to the full board and defined escalation procedures.
• Delegated authority framework. Where the board delegates operational due diligence to management, the delegation must be clearly documented, include defined reporting triggers and reserve key decisions (remediation strategy, public disclosure, supplier termination) for board-level approval.
• Minutes and documentation. Board minutes should consistently record: (a) the sustainability items discussed; (b) the data and reports considered; (c) the decisions taken and the rationale; and (d) any dissenting views. This documentation trail is critical for demonstrating compliance with the duty of care.

A sample board resolution, adaptable to individual circumstances, might read: “The Board resolves to (i) establish a Sustainability Committee with the mandate and charter attached as Annex A; (ii) instruct management to conduct a baseline supply chain risk assessment and report findings to the Committee within 90 days; and (iii) allocate a budget of CHF [amount] for external advisory support in connection with the implementation of the Federal Act on Sustainable Corporate Governance.”

Mandatory Supply Chain Due Diligence, Requirements and Practical Steps

The most significant operational impact of the Swiss Sustainable Corporate Governance Act 2026 draft is the introduction of mandatory risk-based human rights and environmental supply chain due diligence. This obligation applies across the full value chain, not merely to direct contractual counterparties, and requires companies to adopt a continuous, systematic approach to identifying, preventing, mitigating and accounting for adverse impacts.

Risk-Based Due Diligence: Supplier Mapping, Risk Assessment, Remediation and Documentation

The draft follows a risk-based methodology consistent with international frameworks. Companies are not expected to conduct identical due diligence on every supplier, but must calibrate their efforts to the severity and probability of adverse impacts. The core due diligence workflow comprises four stages:

1. Supplier mapping. Identify all direct (tier-one) suppliers and, where risk indicators are present, key indirect (tier-two and beyond) suppliers. Map each supplier against geographic, sectoral and commodity-specific risk indicators.
2. Risk assessment. Evaluate identified suppliers against defined human rights and environmental risk criteria. Prioritise high-risk relationships for deeper assessment, including on-site audits or third-party verification where warranted.
3. Prevention and remediation. Where risks are identified, implement preventive measures (contractual clauses, corrective action plans, capacity building) and, where adverse impacts have occurred, establish remediation processes including grievance mechanisms.
4. Documentation and reporting. Maintain comprehensive records of all due diligence activities, decisions and outcomes. These records form the evidential basis for demonstrating compliance and must be available for regulatory review.

Sectoral Expectations: Extractives, Commodities and Manufacturing

Companies in the extractive, commodity trading and manufacturing sectors face heightened expectations under the draft. Baker McKenzie’s analysis highlights that the draft specifically addresses undertakings placing tin, tantalum, tungsten, gold and other conflict minerals on the Swiss market. Commodity trading firms operating out of Geneva, Zug and Lugano, a significant segment of the Swiss economy, should anticipate particularly detailed supply chain mapping requirements given the complexity and length of their value chains.

Third-Party Audits and Contractual Clauses

Practical implementation of supply chain due diligence in Switzerland will require companies to embed compliance expectations in commercial contracts. Recommended contractual provisions include:

• Sustainability compliance representation. Supplier warrants compliance with specified human rights and environmental standards.
• Audit rights clause. Buyer reserves the right to conduct or commission third-party audits of supplier operations, with reasonable notice and access provisions.
• Corrective action obligation. Supplier commits to implementing corrective action plans within defined timeframes where non-compliance is identified.
• Cascading clause. Supplier agrees to flow equivalent obligations down to its own sub-suppliers, creating a contractual chain of responsibility.
• Termination trigger. Persistent or material non-compliance, or refusal to cooperate with audit or remediation processes, constitutes grounds for termination.

ESG Reporting and Disclosure Obligations Under the 2026 Draft

The second regulatory stream in the draft significantly expands sustainability reporting requirements for Swiss companies. The legislation aims to align Swiss non-financial reporting with the EU’s CSRD framework, creating greater consistency for companies operating across both jurisdictions and reducing the risk of Swiss entities being treated as non-equivalent reporters by EU counterparties and regulators.

Reporting Timeline and Required Content

Under the existing Swiss regime, certain companies are already subject to non-financial reporting obligations under Articles 964a–964c of the Code of Obligations. The draft expands both the scope and substance of these requirements. PwC Switzerland’s analysis notes that the draft moves toward alignment of Swiss sustainability reporting with European standards, which early indications suggest will include:

• Double materiality assessment. Companies must report on sustainability matters that are material both from a financial impact perspective and from the perspective of the company’s impact on people and the environment.
• Standardised metrics. Reporting content is expected to follow recognised frameworks, likely aligned with European Sustainability Reporting Standards (ESRS) or equivalent Swiss-adapted standards.
• Forward-looking disclosures. Companies will likely need to include transition plans, targets and progress indicators, not merely backward-looking performance data.

Internal Data and IT Implications

Meeting the enhanced ESG reporting requirements for Switzerland 2026 will require material investment in internal data infrastructure. Companies should expect to address:

• Data collection systems. Sustainability data (emissions, water usage, labour practices, supply chain metrics) must be captured systematically, with defined ownership and quality controls.
• Audit trails. All reported data must be traceable to underlying source records, with version control and change logs maintained in the same manner as financial reporting data.
• Integration with financial reporting. Sustainability data will increasingly need to be reconciled with and presented alongside financial disclosures, requiring coordination between finance, sustainability and legal teams.

Assurance Expectations

The draft is expected to introduce mandatory external assurance of sustainability reports. KPMG Switzerland’s ESG regulation update factsheet notes that the consultation addresses assurance requirements, with the likely trajectory moving from limited assurance in initial reporting periods toward reasonable assurance over time. Companies should begin identifying suitable assurance providers and building the internal controls necessary to support external verification.

Practical Legal Checklist for Boards and General Counsel, 20 Action Items

The following sustainable governance compliance checklist is organised into three implementation phases, reflecting the urgency and complexity of each action item. Boards and general counsel should adapt these steps to their company’s specific circumstances, size and risk profile.

Phase 1: Immediate Actions (0–3 Months)

1. Conduct a scoping assessment. Determine whether your entity falls within the draft’s scope by reference to entity type, size thresholds and sector-specific triggers.
2. Brief the full board. Present a summary of the draft to all directors at the next scheduled board meeting, including an overview of new duties and liability exposure.
3. Appoint an internal project lead. Designate a senior executive (typically the General Counsel or Chief Compliance Officer) to coordinate the company’s response to the draft.
4. Map tier-one suppliers. Compile a complete inventory of direct suppliers, with basic geographic and sectoral risk classification.
5. Review existing reporting practices. Benchmark current non-financial disclosures against the draft’s expected requirements and identify data gaps.
6. Draft a board resolution. Formally resolve to establish a sustainability oversight structure and allocate initial resources for implementation.
7. Engage external counsel. Retain advisers with expertise in Swiss sustainability regulation to provide a tailored gap analysis and implementation roadmap.

Phase 2: Medium-Term Actions (3–9 Months)

8. Establish a sustainability committee. Create a board-level committee with a defined charter, meeting cadence and reporting obligations to the full board.
9. Conduct a full risk assessment. Extend supplier mapping to tier-two and key indirect suppliers; complete a risk assessment against human rights and environmental criteria.
10. Update committee charters. Amend existing audit committee and risk committee charters to incorporate sustainability oversight responsibilities where the new committee model overlaps.
11. Develop a due diligence policy. Draft and approve a formal due diligence policy covering scope, methodology, escalation triggers, remediation procedures and documentation requirements.
12. Review and amend supplier contracts. Insert sustainability compliance clauses, audit rights, corrective action obligations and cascading requirements into standard procurement templates.
13. Build internal data infrastructure. Invest in sustainability data collection systems, assign data ownership and establish quality control protocols aligned with assurance requirements.
14. Prepare a consultation response. If applicable, submit comments on the draft before the 9 July 2026 deadline, either directly or through an industry association.

Phase 3: Longer-Term Preparation (9–18 Months)

15. Conduct a dry-run sustainability report. Prepare a draft report under the new standards to test data completeness, internal controls and presentation format.
16. Engage assurance providers. Select and contract an external assurance provider and agree the scope, timeline and deliverables for first-period assurance.
17. Train directors and senior management. Deliver targeted training on sustainability governance duties, liability exposure and the company’s due diligence framework.
18. Establish grievance mechanisms. Implement or enhance internal and external channels for reporting human rights or environmental concerns related to the company’s operations or supply chain.
19. Integrate sustainability into M&A processes. Update due diligence playbooks, representations and warranties schedules and post-acquisition integration checklists to incorporate sustainability risk assessment.
20. Monitor legislative developments. Track the post-consultation process, parliamentary debate and any implementing ordinances, adjusting the implementation programme as the final legislative text crystallises.

Impact on Private Equity, Commodity Trading and Investors

The draft Swiss Sustainable Corporate Governance Act 2026 carries particular implications for private equity sponsors, commodity trading firms and institutional investors operating in or through Switzerland.

Private Equity and Portfolio Due Diligence

Private equity firms should anticipate that the due diligence obligations in the draft may apply at both the fund-management entity level and the portfolio company level, depending on the size and structure of the portfolio company. The likely practical effect for PE sponsors will include:

• Pre-acquisition due diligence. Sustainability risk assessments should become a standard component of pre-deal due diligence, alongside financial, legal and tax workstreams.
• Representations and warranties. Sale and purchase agreements should include specific seller representations regarding compliance with due diligence obligations and the absence of material sustainability liabilities.
• Post-acquisition integration. Where a portfolio company is in scope, the sponsor must ensure that the company’s governance, reporting and due diligence systems meet the draft’s requirements within a reasonable transition period.

Commodity Trading

Switzerland’s commodity trading sector, one of the world’s largest by transaction volume, faces some of the most complex compliance challenges under the draft, given the length, opacity and geographic reach of commodity supply chains. Commodity traders should prioritise early supplier mapping and invest in technology-enabled supply chain monitoring tools to manage the volume and complexity of due diligence data.

Implementation Timeline, Consultation and Likely Next Steps

Understanding the legislative timetable is essential for calibrating corporate governance Switzerland 2026 implementation efforts. The key milestones and recommended board actions are as follows:

Industry observers expect that the parliamentary process, including committee deliberations in both the National Council and Council of States, will likely take at least 12–18 months following the Federal Council’s submission of the final draft. Companies should not wait for enactment to begin preparation, as the compliance infrastructure required is substantial and time-consuming to build.

Conclusion, Key Takeaways and Recommended Immediate Board Resolution

The Swiss Sustainable Corporate Governance Act 2026 represents the most significant expansion of Swiss corporate sustainability obligations in a generation. Boards that begin preparing now, during the consultation period, will be materially better positioned to comply when the final law takes effect. The core message is clear: sustainability governance is no longer a voluntary aspiration for Swiss companies; it is becoming a legally enforceable board-level duty with real liability consequences. Every board should pass a resolution at its next meeting to establish oversight structures, allocate resources and launch the implementation programme outlined in this checklist.

Sources

1. Swiss State Secretariat for Economic Affairs (SECO), Corporate Social Responsibility
2. Baker McKenzie, Swiss Federal Council Proposed Draft Corporate Sustainability Act (April 2026)
3. BDO Schweiz, NUFG: New Swiss Law on Sustainable Corporate Governance
4. PwC Switzerland, Swiss Sustainability Reporting and Due Diligence
5. KPMG Switzerland, Swiss ESG Regulation Update Factsheet
6. Bär & Karrer, Switzerland’s Proposed New Framework for Corporate Sustainability
7. CMS, Swiss Federal Council Launches Consultation on SCGA
8. Haerting, New Law on Sustainable Corporate Governance Under Consultation
9. Lalive, The Swiss Corporate Sustainability Act
10. SIX Handbooks, Sustainability Reporting Overview