Switzerland Emerging as Driving ESG Force at Home and Overseas

In late June, the Swiss government unveiled bold new proposals for expanding its corporate sustainability reporting rules to align with international standards, namely the EU's CSRD. From lowering the employee threshold from 500 to 250 to setting financial thresholds at CHF 50 million in sales, the proposed changes would increase the number of Swiss companies required to report on sustainability from 300 to 3,500. Moreover, this enhanced, binding regime would impose stricter environmental, human rights, and corruption risk disclosure requirements.

Despite recent scepticism about a potential slowdown in the ESG movement, corporate commitment to sustainability is intensifying. Published on 1 July, the third annual global "Sustainability in the Spotlight" survey from Spencer Stuart and the Diligent Institute reveals a strong corporate resolve to tackle sustainability challenges, with executives across various industries bolstering their ESG strategies and oversight.

Given the world's pressing socioeconomic and environmental challenges, innovative multinational companies with ambitious ESG agendas will be crucial in driving inclusive and sustainable development, with Switzerland's strong public-private collaboration poised to help lead this transformative journey.

Embedding Swiss Culture of ESG

Switzerland's commitment to ESG is not merely regulatory but also deeply rooted in its corporate culture. By setting rigorous ESG standards, the Swiss government ensures its firms are not just compliant but leaders in sustainability, underscoring the power of effective policy in driving innovative corporate action.

Take the ambitious collaboration recently announced between Swiss International Air Lines (SWISS) and Zurich-based carbon removal pioneer Climeworks to help flyers cut their Scope 3 emissions through Direct Air Capture (DAC) technology. By capturing unavoidable carbon emissions straight from the air and using this CO2 to manufacture sustainable aviation fuels (SAF)—vital for the green transition according to the International Energy Agency (IEA)—this Swiss partnership aims to accelerate net-zero innovation in the hard-to-abate aviation sector.

Thanks to Climeworks' revolutionary DAC solution, SWISS now offers its customers a premium add-on service, "Aviation Tech Pioneer," promising 20% emissions reduction via DAC and 80% through SAF, with the airline seeing this new venture as key in progressing its strong corporate environmental targets. What's more, for Climeworks, this undertaking builds on its previous agreement with SWISS's parent company, Lufthansa Group, to involve customers in slashing challenging emissions via carbon removal.

In the Lausanne region, Prilly-based global security solutions provider SICPA has also joined the group of innovative Swiss multinationals, placing ESG at the core of its operations. Recognising its talented, driven workforce as its greatest strength, SICPA's robust corporate ESG processes and regulations, ranging from diversity and inclusion to health and safety, have seen it ranked among the best Swiss employers for the fourth consecutive year in 2024—including a top 15 position in PME Magazine's and Handelszeitung's 'Chemicals and Pharmaceuticals' category.

Capitalising on private sector's global footprint

Not satisfied with its status as the first company in French-speaking Switzerland to receive this employer distinction, SICPA has actively exported its ESG approach to fuel community-level sustainable development in its many countries of operation, guided by its participation in and annual reporting to the United Nations Global Compact.

Among its recent initiatives, SICPA Uganda launched a partnership with the National Water and Sewerage Corporation (NWSC) to enhance access to clean water and sanitation in its communities, including 30 new public water points as well as new trees and learning materials for local schools. This project notably builds on SICPA's ESG initiatives to provide a local village in Togo with a solar-powered borehole and hundreds of indigenous trees to help counter extreme drought in Kenya.

Swiss giant Nestlé has similarly aligned its ESG commitments in Africa to help fuel sustainable and inclusive development within local communities. As reported in March, Nestlé has teamed up with suppliers Cargill and ETG | Beyond Beans on two groundbreaking agroforestry projects in Ghana and Côte d'Ivoire. These initiatives aim to rejuvenate land surrounding cocoa farms and slash carbon emissions across Nestlé's supply chains by accelerating regenerative agriculture and reforesting degraded areas.

This Nestlé-led venture will see over two million shade trees planted by nearly 20,000 farmers—who will receive technical training and finance support to fuel this long-term effort—with an anticipated reduction and removal of over 500,000 tonnes of carbon over two decades. What's more, these projects will create new jobs for local residents while conserving community forests and their crucial socioeconomic and biodiversity benefits. Citing such initiatives as central to its corporate net-zero journey, Nestlé plans to expand to 18 cooperatives within five years as part of its broader sustainability agenda.

Swiss model complementing African-led development agenda

As Jeanelle Connolly of South African business process solutions firm SoluGrowth has recently highlighted, ESG-driven multinationals operating in Africa currently have significant opportunities to not only access new trade benefits, but also to enhance ESG reporting in Africa to help embed lasting socioeconomic and environmental change.

Citing the African Continental Free Trade Area (AfCFTA) as the key to this endeavour, Connolly positions the private sector-fueled ESG agenda as a vital supporting player in the AfCFTA's mission to lift 30 million Africans out of extreme poverty and ramp up the incomes of nearly 70 million more people. With corporate sustainability reporting in Africa standing at only 56% compared to over 90% for S&P companies, Swiss ESG leaders have an important role to play in driving these rates up and inspiring other multinational firms to invest sustainably in their communities and catalyse local development efforts.

More broadly, beyond Swiss companies' well-established experience in ESG projects and its public sector's leadership in ESG reporting regulation, the country's historically neutral stance on the international stage makes it a promising counterpart to the competing, geopolitically-charged development cooperation offers of the EU and China in Africa—the Global Gateway and Belt and Road Initiative (BRI), respectively.

A global blueprint for future

Looking ahead, Switzerland's dynamic approach to ESG underscores the enduring importance of innovative multinational companies in promoting sustainable and inclusive development. With strong public sector support, Switzerland is not only advancing its own sustainability agenda but also setting a global benchmark for ESG practices.

By creating a robust framework for transparency and accountability, Switzerland sets a high bar for other nations to follow, showcasing how concerted efforts between the public and private sectors can lead to substantial progress in sustainability, addressing the pressing environmental and social challenges of our time and ensuring a better future for all.