Climate Reporting is a foundational element addressing the urgent need to combat and adapt to climate change and transition to a low-carbon economy. It enables stakeholders, including investors, regulators, and the public, to assess an organisation's climate-related performance and efforts to mitigate environmental impacts.

During its meeting on November 23rd 2022, the Swiss Federal Council adopted the implementing ordinance (the "ordinance”) on climate disclosures for large Swiss companies bringing it into force as of January 1st 2024. The ordinance enters in effect in 2025, while the code of obligations will already mandate a non-financial report from 2024.

The ordinance regulates companies' reporting on climate issues as part of the environmental matters to be reported on under Articles 964b – 964c of the Swiss Code of Obligations (CO) on transparency for non-financial matters. It specifies how companies can comply with the corresponding reporting obligation. It does so by stating that compliance is presumed if the reporting is based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

While general Sustainability Reporting provides a comprehensive overview of a company's sustainability strategy and performance, Climate Reporting narrows it to climate-related governance, strategy, risk management, metrics, and actions.

Climate Reporting is complex, and the efforts for initial reporting are substantial even if companies have experience with Sustainability Reporting. Furthermore, companies affected by the ordinance have a relatively short adaptation period to publish their first reports by the end of 2025.

Who is obliged to report on climate matters in Switzerland? 

According to Article 964a para. 1 in the Swiss Code of Obligations (CO), companies are obliged to report on nonfinancial matters which, according to Article 964b para. 1 CO, include environmental matters, in particular the CO2 goals, and thus climate matters. A company must report on their climate matters if they fulfil all three of the following:  

• If they are companies of public interest (as defined in Article 2 letter c of the Federal Act on the Licensing and Oversight of Auditors);  

• If, together with the Swiss or foreign companies they control, they have at least 500 full-time equivalent positions on an annual average in two successive financial years; and  

• If, together with the Swiss or foreign companies they control, they exceed at least one of the following amounts in two successive financial years: a balance sheet total of CHF 20 million or sales revenues of CHF 40 million.  

The obligation does not apply to companies that are controlled by another company to which Article 964a para. 1 CO applies, or that must prepare an equivalent report under foreign law (Article 964a para. 2 CO).  

The ordinance itself does not establish the responsibility to report but rather only states that compliance with the obligation to report on climate issues under Articles 964a – 964c CO is presumed if the disclosure is made in accordance with the recommendations of the TCFD as outlined in Article 3 of the ordinance (Article 2 para. 1 of the ordinance). 

What are the obligations under the Swiss Climate Ordinance? 

The ordinance is a so-called implementing or enforcement ordinance and not a so-called legislative ordinance and, thus, only specifies the obligations already contained in the CO (Swiss Code of Obligations). Accordingly, the purpose of the ordinance mainly consists of outlining how companies can fulfil the transparency obligations on climate matters under Articles 964a – 964c CO.  

The ordinance does so by declaring that a disclosure made in accordance with the recommendations of the TCFD as outlined in Article 3 of the ordinance presumably meets the reporting obligations. Alternatively, the ordinance states in Article 2 para. 2 that a company that does not make disclosures on climate issues in accordance Article 3 of the ordinance must either (i) demonstrate that it complies in other ways with the disclosure obligation or – in accordance with the principle of comply or explain – (ii) declare that it does not follow any climate concept and justify this decision.  

Furthermore, the ordinance specifies in Article 4 para. 2 the obligation contained in Article 964c para. 2 number 1 CO that the report on non-financial matters must be published electronically. It states that electronic publication shall be in at least one human-readable and one machine-readable electronic format for international use.