Sustainability - what is it all about?

There is no clear definition of the term sustainability. However, sustainable business is understood to mean the permanent weighing up of social, ecological and economic aspects against each other so that they are in a reasonable relationship with each other. In addition to environmental issues, sustainability therefore also encompasses social and employee concerns, human rights and the fight against corruption.

What has happened so far (in Switzerland on the political stage)

In November 2020, the Swiss people voted on the Responsible Business Initiative. As this failed at the ballot box, Parliament's indirect counter-proposal came into force on January 1, 2022. Provisions on non-financial reporting were added to Art. 964a to i CO. These currently only apply to listed companies with more than 500 employees and mean that these companies must prepare sustainability reporting.

‍Whatare the current developments?

In the EU, the relevant regulations have been further developed in recent years. As the Federal Council wants to harmonize the regulations applicable in Switzerland internationally, there is a need for adaptation. At its June meeting, it opened the consultation on the new provisions on reporting obligations for companies. The most significant change: in line with the EU, companies with 250 employees or more will now be subject to reporting requirements if their balance sheet total exceeds CHF 25 million or turnover exceeds CHF 50 million in two consecutive years.

‍Whatare the opportunities for SMEs to benefit from this development?

Sustainability management can become a driver of value enhancement because stakeholders increasingly expect sustainability to be integrated into the operational business, which in turn can mean risk reduction, value enhancement and market differentiation.

The following aspects should be highlighted as examples:

• Access to capital:‍ Increases access to capital and strengthens earnings growth (investor interest in so-called green investments, more favorable interest rates for debt capital)

• Regulatory compliance: Reduces the risk of regulatory incidents, guarantees compliance and increases credibility

• Employee engagement and retention: attracts talent and helps to retain them and tie them to the company (younger employees pay attention to sustainability)

• Operational efficiency: Increases productivity, reduces resource utilization and increases efficiency

• Innovation and creation of business opportunities: Creates access to new market segments

• Brand differentiation: Increases market advantages through brand and product differentiation

Due to the interconnectedness of supply chains, SMEs will also be confronted with this issue sooner or later (e.g. by customers who demand corresponding proof). It therefore makes sense to think about where your company currently stands in terms of sustainability at an early stage, even without a statutory reporting obligation.

With Christoph Andenmatten, Gfeller + Partner AG has a long-standing auditor and consultant who has undergone further training in the field of sustainability and will be happy to assist you with conceptual questions or to carry out an analysis of your company with a sense of proportion. Please do not hesitate to contact us.