Navigating the new Swiss Federal Act on Governance

Switzerland is entering a bold new era of corporate accountability with the unveiling of the Federal Act on Sustainable Corporate Governance (NUFG). 

Announced by the Federal Council, this landmark proposal seeks to harmonise Swiss business practices with the high-stakes environmental and social standards currently sweeping across Europe. By positioning the NUFG as an indirect counter-proposal to the popular initiative for responsible business, the government is attempting a delicate balancing act: championing human rights and environmental protection while ensuring Swiss giants remain competitive in the global marketplace.

In a strategic move to preserve competitiveness, the NUFG closely mirrors the European Union’s recently streamlined Omnibus standards. This means that while the rules are becoming more rigorous, they are also becoming more targeted. Under the new regime, sustainability reporting obligations will shift from the current 500-employee threshold to a more exclusive bracket of companies with at least 1,000 employees and 450 million CHF in revenue. This change effectively focuses the regulatory lens on approximately 100 major players, relieving the burden on small and medium-sized enterprises while mandating that those at the top report in strict compliance with international standards and undergo mandatory external audits.

The most profound shift, however, lies in the realm of due diligence. For the roughly 30 largest companies which boast over 5,000 employees and 1.5 billion CHF in revenue, the law demands a proactive deep dive into their supply chains. These firms must now identify and remediate negative impacts on human rights and the environment, overseen by the Swiss Federal Audit Oversight Authority.

Perhaps most significant is the debate over parent company liability; the council is weighing options that could make Swiss headquarters explicitly liable for the failings of their foreign subsidiaries. As the July 2026 deadline for feedback nears, it remains to be seen if the NUFG will satisfy the public’s demand for corporate responsibility while still providing the breathing room Swiss businesses need to thrive.

Don't miss future regulatory insights; sign up for our weekly update here.