Climate Change Regulation 2025 Comparisons

Switzerland is an active participant in the global climate change legal regime. It is a party to the United Nations Framework Convention on Climate Change (UNFCCC) and ratified both the Kyoto Protocol and the Paris Agreement. As a non-EU developed country, Switzerland often negotiates as part of the Environmental Integrity Group alongside countries like South Korea and Mexico. Swiss negotiators support mitigation commitments to align with the Paris Agreement’s 1.5°C goal. Further, Switzerland’s delegation emphasises environmental integrity in carbon markets, transparency in reporting, and broad participation by all countries, while acknowledging the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). Overall, Switzerland’s role is that of a proactive country that implements climate measures domestically while contributing to the multilateral process on various key issues.

In multilateral forums, Switzerland promotes a comprehensive approach to mitigating and adapting to climate change. In terms of mitigation, the country has set domestic CO₂ reduction targets and relies heavily on emissions reductions abroad. On adaptation, Switzerland has developed a national strategy, recognising that mountain regions like the Alps are especially vulnerable. It also contributes to global adaptation efforts, for instance, by funding climate-resilient agriculture projects abroad. Regarding climate finance, Switzerland contributes to international climate funds such as the Green Climate Fund, with a recent commitment to contributing CHF135 million to the second replenishment for the period of 2024–2027. Further, it supports capacity-building and technology transfer initiatives through bilateral aid and participation in programmes that support other nations develop low-carbon technologies. Switzerland has generally welcomed the idea of a Loss and Damage Fund, particularly for supporting the most vulnerable nations. However, the country has emphasised the need to define the donor base, recipient countries, and fund management before committing to significant contributions.

As it is not a member of the EU, Switzerland is not under a legal obligation to transpose EU climate law into its domestic legislation. However, it engages closely with regional climate regimes in Europe. A prime example is Switzerland’s linkage of its domestic emissions trading system (ETS) with the EU ETS, which has been in effect since 1 January 2020. The two ETSs are governed by an agreement that covers the mutual recognition of emission allowances and the structure of the two ETSs. Aside from ETS linkage, Switzerland often aligns its regulations with EU climate regulations. For instance, it mirrors EU rules on CO₂ emission limits for new vehicles and on fluorinated gases, as well as climate reporting requirements.

In addition to EU linkage, Switzerland participates in other regional environmental agreements that have climate change components. For example, it is a signatory to the Alpine Convention, a regional treaty focusing on sustainable development in the Alpine region. Furthermore, as a member of the OECD and other intergovernmental organisations, Switzerland shares best practices on climate policies with its regional peers.

Swiss national climate policy is closely tied to its multilateral commitments. In particular, Switzerland’s policy goals are directly influenced by the Paris Agreement. In February 2020, the Swiss government submitted its first Nationally Determined Contribution (NDC) for the period 2021–2030 (NDC 2030), setting an unconditional target to reduce net greenhouse gas emissions by at least 50% by 2030 compared to 1990 levels. The NDC’s primary objective is mitigation, including through the purchase of international carbon credits. Rather than as a quantified NDC goal, adaptation is handled in parallel via a separate national adaptation strategy.

The NDC’s initial 50% by 2030 target was reaffirmed in subsequent updates, with the latest update in November 2024. In January 2025, Switzerland submitted its second NDC, covering the period from 2031 to 2035. The second NDC reaffirms Switzerland’s commitment to reducing greenhouse gas emissions, with a target of a 65% reduction by 2035 compared to 1990 levels. Switzerland emphasises its intent to achieve as much reduction as possible domestically, while leveraging international co-operation for the remainder (see 2.3 Bilateral/Multilateral Co-Operation, 5.1 Carbon Markets). When calculating the domestic share, emissions from the buildings, transport, industry and other sectors are relevant, while land use is not taken into account. Further, in line with UNFCCC guidance, emissions from international aviation and navigation are reported separately.

Switzerland’s mid-century long-term climate strategy, submitted to the UN in 2021, references IPCC 1.5°C scenarios and sets a target of achieving net-zero emissions by 2050. This target was transposed into domestic law through the Climate and Innovation Act of 2023 (see 2.2 National Climate Change Legal Regime). For hard-to-abate emissions, the government’s long-term climate strategy proposes the use of carbon capture and storage (CCS) and negative emission technologies (NET).

According to Swiss climate law, at least two-thirds of the greenhouse gas emissions reductions necessary to meet Switzerland’s reduction targets must be realised domestically. Accordingly, up to one third may be achieved through measures abroad. To this end, Switzerland is operationalising Article 6 of the Paris Agreement, which is a cornerstone of the country’s climate policy (see 2.3 Bilateral/Multilateral Co-Operation, 5.1 Carbon Markets).

The Swiss government submits regular progress reports under the UNFCCC transparency framework (previously Biennial Reports and, going forward, Biennial Transparency Reports under the Paris Agreement). The first Biennial Transparency Report was filed in 2024, outlining the country’s climate regime in detail, demonstrating the progress made over the past years and the efforts made to keep to the commitments under the UNFCCC and the Paris Agreement.

In sum, Swiss climate policy is guided by IPCC science and has evolved progressively in line with the Paris Agreement. It is continuously updated as international rules and knowledge advance. However, environmental groups have criticised the government’s climate policies and targets as inadequate and have challenged them in court. See the case of KlimaSeniorinnen et al. v Switzerland (see 2.5 Climate Litigation).

Climate change issues are formally legislated in Switzerland through dedicated statutes, which are embedded in the constitutional framework for environmental protection and energy policy.

The central pillar of the Swiss climate change legislation is the Federal Act on the Reduction of CO₂ Emissions (the “CO₂ Act”). First enacted in 2000 and subsequently revised several times, the CO₂ Act establishes the legal framework for national policies aimed at achieving the country’s climate targets. In June 2023, the Swiss public approved the Climate Protection and Innovation Act (CPIA), a framework legislation that codifies Switzerland’s climate targets in line with the Paris Agreement. The CPIA codifies the net-zero 2050 by goal and places interim emission reduction targets into law. The CO₂ Act and the CPIA are grounded in the Swiss Constitution’s environmental provisions – in particular Article 74 (environmental protection) and Article 89 (energy policy). Although the Constitution does not explicitly use the terminology “climate change”, these broad constitutional provisions support an ambitious regulatory approach to climate change.

The statutory regime of the CO₂ Act and the CPIA is complemented by other statutes. In particular, the Environmental Protection Act (EPA) provides general pollution control tools that extend to greenhouse gases (eg, concerning fluorinated gases). Further, the Energy Act implements the “Energy Strategy 2050” which, while focused on energy supply and efficiency, underpins emissions reduction by promoting renewable energy. These laws operate within a federal system where the national legislature adopts frameworks, and the cantons (states) typically handle implementation.

In parallel to administrative law, climate change issues are increasingly governed by private law as well. In particular, large public companies are required to publish climate change-related information as part of their sustainability reports, and the Unfair Competition Act explicitly forbids unsubstantiated climate change-related claims in commercial communication.

Supported by constitutional principles of environmental protection and energy policy, this domestic legal regime has enabled Switzerland to implement measures such as carbon pricing, emissions trading and vehicle emissions standards (see 3.1 Policy/Regulatory Instruments and Spheres of Government/Sectors in respect of mitigation and 4.1 Policy/Regulatory Instruments and Spheres of Government/Sectors) in respect of adaptation.

International co-operation is a cornerstone of Switzerland’s climate strategy. In fact, Switzerland is a global pioneer in implementing international collaboration under Article 6 of the Paris Agreement. This refers both to bilateral agreements under Article 6.2 of the Paris Agreement and preparation for the rollout of the multilateral Paris Agreement Crediting Mechanism (PACM). In addition, Switzerland is exploring Article 6.8 (non-market approaches) as part of its co-operative climate action.

Further implementing Article 6, Switzerland is collaborating with Norway, Iceland and Denmark on carbon capture, utilisation and storage (CCUS) and Carbon Dioxide Removal (CDR).

Switzerland’s climate change policy is developed and implemented through various authorities at different levels of government. At the federal level, the policy framework requires the approval of the Federal Parliament and, if a popular referendum is called, of the Swiss population.

At the federal level, the lead authority is the Federal Department of the Environment, Transport, Energy and Communications (DETEC). Within DETEC, the Federal Office for the Environment (FOEN) is the agency primarily responsible for climate change matters. FOEN develops climate policy strategies and measures, drafts legislation and guidance documents, and oversees the implementation of measures addressing climate change. It is the key authority responsible for Switzerland’s greenhouse gas inventory, operating the national emissions trading registry, and representing Switzerland in international climate negotiations. FOEN has a dedicated Climate Division specialised in mitigation policy, adaptation strategy and climate science. Furthermore, FOEN has a mandate to co-ordinate across sectors and with cantonal authorities on climate issues. Given Switzerland’s consensus-driven governance, climate regulation drafts and policies must be consulted on by other federal offices and relevant stakeholders to ensure widespread support and practicality.

Alongside FOEN, other specialised federal offices play important roles in the climate regulatory landscape. For example, the Federal Office of Energy (FOE) is primarily responsible for energy policy and the implementation of the Energy Act. It is driving measures such as the promotion of renewable energy, energy efficiency programmes, emission regulations for new vehicles and fostering renewable heating systems together with the Swiss cantons. The Federal Office of Transport (FOT) and the Federal Roads Office (FEDRO) influence transport sector emissions by supporting public transport and electric mobility infrastructure. The Federal Office for Civil Aviation (FOCA) is involved in applying international schemes like CORSIA (for aviation emissions). The Federal Office for Agriculture (FOAG) runs programmes aimed at reducing agriculture-related greenhouse gas emissions. These include encouraging more sustainable farming practices and the use of bioenergy.

To foster co-ordinated legislative proposals, Switzerland has established co-ordination mechanisms, such as the Interdepartmental Committee on Climate, which is chaired by FOEN. This committee brings together representatives from all relevant federal offices to discuss climate actions in different sectors.

Responsibilities for regulatory enforcement are shared between federal agencies and the cantons. For instance, federal authorities implement the CO₂ levy on heating and process fuels, as well as the redistribution of a part of this revenue to individuals and businesses (see 3.1 Policy/Regulatory Instruments and Spheres of Government/Sectors). A portion of the revenue is earmarked for the buildings programme, which promotes renewable heating systems and energy-efficient refurbishments. Conversely, the cantons are responsible for setting standards to continuously reduce CO₂ emissions in buildings.

At the sub-national level, several cantons, municipalities and cities have adopted their own net zero targets or are in the process of doing so.

Until recently, climate change-related litigation was relatively uncommon in Switzerland. However, this has changed due to an emerging body of litigation in the field of administrative law, notably the landmark case of KlimaSeniorinnen et al. v Switzerland, and a pilot case under private law against a major building materials company, Asmania et al. v Holcim, as well as a growing body of greenwashing cases.

Traditionally, Switzerland’s rather strict rules on legal standing have limited the scope for environmental lawsuits in the public interest. Under Swiss law, plaintiffs are generally required to demonstrate specific, direct harm. However, civil society groups have challenged this status quo, aiming to compel the government to take stronger action on climate change. In the landmark case of KlimaSeniorinnen et al. v Switzerland, four individual women and a Swiss association comprising over 2,000 elderly women aged over 64 argued that the federal government’s climate policies were inadequate and thus violated their fundamental rights, given that elderly women are particularly susceptible to heatwaves exacerbated by climate change. Having exhausted all domestic legal avenues in Switzerland, where the authorities and courts denied them standing, the plaintiffs took their case to the European Court of Human Rights (ECtHR). In a landmark judgment delivered in April 2024, the ECtHR found in favour of the plaintiffs, ruling that Switzerland had breached its positive obligations under the European Convention on Human Rights (ECHR) by failing to take adequate measures to mitigate the impact of climate change on human rights. Specifically, the ECtHR held that there had been a violation of Article 8 (right to respect for private and family life) and Article 6 (right to a fair trial) ECHR. Further, the court clarified that Article 8 includes a right to effective protection by the public authorities from the serious adverse impacts of climate change on lives, health, well-being and quality of life. This was the first time that an international court had found a state in breach of its human rights obligations in the context of climate change. Following the judgment, a controversy ensued about the implications of the ruling for climate change policy-making in Switzerland.

Another notable case is the “Swiss Farmers Case”. In March 2024, nine Swiss farmers and five farming interest associations petitioned the federal government to take stronger action against the rising number of droughts harming their livelihoods. As of mid-2025, the case was still pending before the Swiss Federal Administrative Court.

In the field of private climate litigation, one pending case is particularly noteworthy. In Asmania et al. v Holcim, a case initiated in 2022, four residents of the island of Pari in Indonesia sued the major construction company Holcim in the courts of the canton of Zug, where Holcim has its registered seat. Relying on general clauses of extra-contractual liability, the plaintiffs request that the company substantially reduce its greenhouse gas emissions and compensate them for climate change-related damages threatening their livelihood on Pari. As of mid-2025, the case was still pending.

In addition to the above cases, the Swiss Fairness Commission (SFC), a self-regulatory body, has dealt with several greenwashing complaints against various companies. In most cases, the SFC sided with the complainants, recommending that the companies concerned cease using certain commercial claims (such as “climate positive” or “CO₂ neutral”). Further, in several cases, allegations of greenwashing have led to the involvement of the State Secretariat for Economic Affairs (SECO), which has certain enforcement powers to combat unfair competition. Moreover, criminal investigation authorities have also been called upon to investigate.

In climate litigation cases in Switzerland, the plaintiffs are usually individuals or civil society organisations, often acting in concert. The respondents are typically either the Swiss Confederation or (large or smaller) companies. The purposes of climate litigation range from shaping Swiss climate policy (KlimaSeniorinnen) to securing compensation for victims and protecting consumers (eg, greenwashing cases). Often, the scope of the proceedings extends to public campaigns about climate change issues.

Switzerland employs a mix of policy and regulatory instruments to mitigate climate change (see 2.2 National Climate Change Legal Regime). The Swiss mitigation policies cut across various spheres of government and sectors. The national approach to mitigation is multi-faceted, combining market-based mechanisms, regulatory standards and support programmes.

Carbon Pricing

Switzerland has both a carbon tax and an emissions trading scheme. The federal government levies a duty of CHF120 on every tonne of CO₂ produced when heating oil, natural gas and other fossil fuels are burned. The CO₂ levy is intended to create an incentive for businesses and households to reduce emissions. The levy rate increases if interim emission reduction targets in the building sector are not met. Notably, two-thirds of the carbon tax revenue is redistributed to the population (per capita) and businesses. One-third of the revenue is used to reduce carbon emissions in buildings (Buildings Programme) as well as to fund renewable energy and promote innovative businesses (Technology Fund). Under certain conditions, companies are exempted from the levy. In parallel, a cap-and-trade Emissions Trading System (ETS) covers large industrial emitters and (a part of) the aviation industry. Since the Swiss ETS is linked with the EU ETS, companies in Switzerland can trade allowances with the much larger EU market. Further, large fossil fuel importers must offset a certain percentage (24% as of 2024) of gasoline and diesel emissions, by investing in climate projects or purchasing carbon credits.

Technical Standards

The Swiss mitigation regime further relies on technical standards, for example CO₂ emissions standards for vehicles. Switzerland enforces targets for average CO₂ emissions from new passenger cars and light commercial vehicles, essentially mirroring the EU’s fleet-wide standards. Importers exceeding the limits are liable to penalties. Additionally, there are building-sector regulations: encouraged by federal goals and funding, many cantons have adopted model building codes that require high thermal insulation for new buildings and set deadlines for replacing old fossil-fuelled heating systems with cleaner alternatives such as heat pumps or district heating.

Reporting and Emissions Monitoring

Large emitters in the ETS must monitor their greenhouse gas emissions and have them verified annually, reporting the data to FOEN. Likewise, companies that opt for an agreement exempting them from the CO₂ levy must report their emissions and progress yearly. Furthermore, companies that are subject to sustainability reporting obligations under company law (see 6.4 ESG Reporting and Climate Change) must report annually on their greenhouse gas emissions and related targets.

Carbon Markets

Carbon market instruments are integrated into the mitigation regime. As described, Switzerland uses international carbon credit purchases under Article 6 for part of its NDC – this is implemented via government programmes rather than imposed on private entities, but indirectly Swiss companies may get involved in those international projects, for instance, a Swiss company funding an emission reduction project in a foreign country to generate credits, under government oversight. The federal government maintains quality criteria for such projects.

Severe adverse impacts of climate change are already being felt in Switzerland, including more frequent heatwaves and dry periods, dramatic loss of glaciers, increasing natural hazards and biodiversity loss. In fact, Switzerland is one of the countries most affected by climate change. It is experiencing warming at a much faster rate than the global average, particularly in the Alpine region, which is having a significant impact on glaciers, ecosystems and weather patterns. These impacts will become increasingly significant in the future.

Switzerland is addressing the issue of climate change adaptation through a combination of various measures and initiatives, in particular as follows.

• The National Climate Change Adaptation Strategy, adopted by the Federal Council and first issued in 2012 with an updated Action Plan for 2020–2025, sets out goals and guiding principles, as well as a comprehensive set of adaptation measures across different sectors. The strategy is accompanied by detailed Action Plans that list concrete adaptation measures, ranging from improving flood defences and heat-health warning systems to adjusting building standards for future climate conditions. Many cantons, cities and municipalities are addressing various aspects of climate change adaptation, including by developing strategies and action plans.
• Switzerland has also established the National Centre for Climate Services, a collaborative platform that develops climate scenarios and risk assessments which are provided to planners, businesses and communities to inform their adaptation decisions.
• The Climate Change Adaptation Network, established in 2025, brings together the federal government, cantons, municipalities, cities, businesses, scientists and civil society to promote dialogue on solutions and strategies for adapting to climate change. Also launched in 2025 is Adapt+, a climate change adaptation funding programme. Run by FOEN, this programme provides federal support for the implementation of adaptation measures.
• In respect of sectoral regulations and policies, adaptation measures are usually incorporated into existing sectoral regulatory frameworks. For instance, water protection legislation has been amended to account for increasing climate change impacts. As another example, agricultural policy encourages diversification of crop varieties and provides research and advisory services to farmers on drought-resistant farming and soil conservation. Moreover, forestry policies have been amended to promote adaptation measures.

Switzerland’s climate adaptation strategy is shaped and implemented by multiple spheres of government, including federal, cantonal and municipal levels. For example, the cantons are responsible for mapping hazard zones for landslides and floods, and they can impose measures such as no-build buffer zones along rivers. Several cities have climate adaptation plans focusing on urban drainage, green roofs and emergency preparedness for extreme weather. This multi-level approach ensures adaptation is mainstreamed into everyday governance. Importantly, many efforts are being made to improve disaster risk management. Switzerland has a well-developed system of protective structures against avalanches and landslides, as well as flood retention basins and emergency response drills. These measures have been strengthened in anticipation of more extreme weather events due to climate change.

Switzerland is strongly involved in the development and use of carbon markets under the Paris Agreement. The country fully intends to participate in the emerging carbon credit mechanisms – both the bilateral approaches under Article 6.2 of the Paris Agreement and the multilateral Paris Agreement Crediting Mechanism (PACM) under Article 6.4. Switzerland views carbon markets as an important tool to achieve its mitigation targets while supporting global emission reduction efforts.

Switzerland is actively pursuing bilateral agreements under Article 6.2 of the Paris Agreement to partially achieve its NDC through foreign emission reductions (see 2.1 National Climate Change Policy). These bilateral agreements establish a framework through which Switzerland can fund emission-reduction projects in partner countries and receive internationally transferred mitigation outcomes (ITMOs) in return. In 2020, Switzerland concluded pioneering climate co-operation agreements with Peru and Ghana, the first of their kind globally. Since then, it has signed treaties with several other countries, including Senegal, Georgia, Vanuatu, Dominica, Thailand and Ukraine. These agreements cover a range of project types, from renewable energy to methane reduction, and they make Switzerland one of the world leaders in Article 6 implementation. Each agreement specifies requirements – such as independent verification, transparency of transactions, and sustainable development criteria – seeking to ensure environmental integrity. Article 6.2 agreements present opportunities for the private sector in Switzerland, as companies can invest in or purchase credits from authorised projects abroad with the confidence that the credits will be recognised under the Paris system. Information about each agreement is made public. Texts of the treaties and descriptions of authorised projects are available on a website, underscoring Switzerland’s commitment to transparency in co-operative approaches. Many of these arrangements are already being implemented. For example, Ghana and Switzerland finalised the first issuance of ITMOs for NDC use in July 2025.

Under Article 6.4, which establishes the multilateral Paris Agreement Crediting Mechanism (PACM), Switzerland has taken steps to participate once it becomes operational. The Swiss government has appointed the FOEN to serve as the Designated National Authority (DNA) for carbon market purposes. In anticipation of the rules of the Article 6.4 Supervisory Body, Switzerland has set up administrative processes to prepare for a full rollout.

In terms of administrative and governance processes for carbon markets, Switzerland uses a combination of government oversight and market-based participation. Under the Article 6.2 scheme, a Swiss public-private system is evolving: the government often facilitates or even co-finances projects. At the same time, private sector entities – such as climate project developers – are encouraged to engage by identifying projects in partner countries and then going through the authorisation process to make the resulting emissions reductions eligible as ITMOs. The government has created a centralised authorisation procedure: a Swiss entity must apply to FOEN for approval to use or transfer a mitigation outcome internationally. In collaboration with the relevant authority in the partner country, FOEN verifies that the project meets all the necessary criteria, including confirmation that the host country will apply a corresponding adjustment to prevent double-counting. Only after this bilateral approval can the ITMOs be transacted and counted. This ensures a high level of environmental integrity and traceability for every credit that Switzerland uses.

The voluntary carbon market, generally understood as the carbon market not related to any government supervision and approval (but typically governed by private standards), is very active in Switzerland. For the time being, Switzerland has refrained from passing specific legislation governing the voluntary carbon market. However, it is worth noting that on 1 January 2025, the Unfair Competition Act (UCA) was amended to include a provision that requires any climate change-related commercial communication to be substantiated with objective and verifiable information (Article 3 paragraph 1 letter x UCA), in order to prevent misleading claims relating to climate change. The implementation of this new provision is expected to have implications for the voluntary carbon market in Switzerland.

For private sector involvement, Switzerland’s general approach is to facilitate but also control quality. It invites private investment in carbon markets by securing international frameworks fostering legal certainty. However, it also maintains oversight via FOEN approvals and limits on how many foreign credits can be used.

The EU’s Carbon Border Adjustment Mechanism (CBAM) has significant implications for countries trading with the EU. Switzerland, however, benefits from an exemption, due to the linkage of the Swiss ETS with the EU ETS (see 3.1 Policy/Regulatory Instruments and Spheres of Government/Sectors). Therefore, goods originating from Switzerland are excluded from CBAM requirements. Accordingly, when CBAM is fully implemented (with a phasing-in period from 2023 to 2026), imports of covered goods from Switzerland (eg, steel, aluminum, cement, electricity, fertilisers and hydrogen) will be exempt.

Given that the majority of Switzerland’s emissions-intensive trade is with the EU, it is not expected that the country will be significantly affected by CBAM. For the time being, Switzerland does not intend to introduce its own carbon border adjustment mechanism. Instead, the government intends to maintain alignment of its Emissions Trading Scheme (ETS) with the that of the EU in order to ensure continued equivalence (and thus exemption from CBAM).

Since the financial year 2024, large listed companies and large companies supervised by the Financial Market Supervisory Authority (FINMA) are required, based on a comply-or-explain basis, to report their climate risk exposure in line with the Recommendations of the Task Force on Climate Related Financial Disclosures (the “TCFD Recommendations”). The Ordinance on Climate Disclosures (OCD), which came into force on 1 January 2024, specifies the requirements for climate-related reporting under the Code of Obligations (Article 964a et seq. Code of Obligations; see 6.4 ESG Reporting and Climate Change). Investors, particularly institutional investors, as well as proxy advisers such as Ethos, supported the push for TCFD-aligned disclosures.

In 2024, the Federal Council proposed revising and updating the OCD in line with international developments, particularly with emerging IFRS standards relating to climate disclosures and the European Sustainability Reporting Standards (ESRS). However, mainly due to delays in the implementation of the ESRS in the EU, the Federal Council decided to pause the OCD revision process in 2025.

Under Swiss company law, directors owe a duty of care towards the company they oversee (Article 717 CO). As in other jurisdictions, directors are also subject to a duty of loyalty. Failure to comply with these duties, which are sometimes referred to as fiduciary duties, may result in liability (Article 754 et seq. CO). With regard to climate risks, directors could face liability claims if they fail to adequately disclose them (duty to disclose). In this respect, climate risks are treated like any other risk a company faces. This liability could also potentially arise if directors fail to address climate risks (duty to address), as an expression of the duty of oversight. It is worth noting that the TCFD Recommendations, to which Swiss legislation refers (see 6.1 Climate Financial Reporting), recognise the central role of the board in overseeing climate risk.

In addition to civil liability, directors may face risks of criminal liability. In particular, directors (and other individuals acting on behalf of the company, such as officers) may be subject to a personal criminal fine of up to CHF100,000 (up to CHF50,000 in cases of negligence) if they fail to ensure that the company fulfils its climate reporting obligations (Article 325ter of the Swiss Criminal Code). Furthermore, if the company fails to comply with other climate change-related obligations, such as those relating to CO₂ levies or emission allowances, directors may incur liability for failing to exercise proper oversight. In addition, more general criminal offences could be applicable, such as fraud.

In terms of infrastructure investments and financing arrangements, projects involving high emissions, such as the financing of coal mines abroad, have attracted significant attention from Swiss civil society, particularly with regard to major banks. However, as far as the authors know, this has not yet resulted in legal action being taken against company directors.

Swiss law generally recognises the separate legal personality of each company. As a matter of principle, a parent company is not strictly liable for the actions of its subsidiary. According to literature and case law from the Federal Supreme Court, piercing the corporate veil only occurs in exceptional circumstances, including in particular situations in which:

• the parent company misuses the group structure to escape liability (abuse of corporate form);
• the parent company acts as a de facto corporate organ of the subsidiary;
• the group trust doctrine applies (Swissair Decision);
• it is impossible to distinguish the parent company from the subsidiary; and
• the subsidiary has been stripped of any assets.

In 2020, the Responsible Business Initiative, a popular constitutional initiative, was rejected by a very narrow margin. Had the initiative been adopted, it would have established a constitutional basis for strict liability of parent companies in cases of severe human rights or environmental protection violations by their foreign subsidiaries. In 2025, civil society groups launched a follow-up initiative, the Responsible Business Initiative 2.0.

Based on the model of the EU’s 2014 Non-Financial Reporting Directive (NFRD), and as a counter-proposal to the (narrowly rejected) Responsible Business Initiative, Switzerland introduced, on 1 January 2022, so-called “non-financial” reporting requirements for large listed companies and large companies supervised by FINMA (see 6.1 Climate Financial Reporting). These obligations are enshrined in Article 964a et seq. CO. As part of their annual disclosures, companies within the scope of these requirements must report on environmental issues, particularly their CO₂ targets, as well as social and workers’ issues, respect for human rights, and anti-corruption measures. The reporting requirements are informed by the principle of double materiality, meaning that companies must report on both their (adverse) impacts on relevant topics as well as on the risks that these topics (eg, climate change) pose to their business (see 6.1 Climate Financial Reporting).

In practice, the absence of adequate reporting standards and methodologies has resulted in significant variation in companies’ climate change reporting. Common issues include the lack of reporting on Scope 3 emissions and the absence of adequate climate targets.

While most companies still rely on the Global Reporting Initiative (GRI), many are preparing to report in line with emerging climate reporting standards issued by the International Sustainability Standards Board (ISSB) and the European Sustainability Reporting Standard (ESRS). Further, many Swiss companies rely on the Science Based Targets initiative (SBTi) to inform their climate targets, which feeds into their climate reporting.

Typically, as part of broader “ESG due diligence”, climate change is increasingly a topic that forms part of M&A, finance and property transactions. There are various reasons why buyers include climate change in due diligence, ranging from strategy and compliance to cost-related considerations.

Depending on the characteristics of a transaction, including its size and the industry in question, it is likely that a buyer will assess a target company’s compliance with environmental and climate regulations as part of the legal due diligence process in M&A transactions. Potential questions include, for example, whether the target participates in an emission trading scheme and whether it is meeting its emissions cap (or whether will it need to purchase a significant number of allowances). Another consideration may be whether any CO₂ levies owed have been paid. Furthermore, if the target company owns factories or operates facilities that emit significant quantities of greenhouse gases, the buyer will want to be aware of its historical and projected emissions and any potential liabilities. Additionally, buyers are increasingly scrutinising the target’s exposure to future climate policy, conducting a transition risk assessment. For example, how will upcoming policy changes, such as stricter laws in Switzerland or export markets or potential new carbon taxes, impact the costs or viability of a company that relies on CO₂-emitting technologies?

If the target is subject to climate reporting requirements (see 6.1 Climate Financial Reporting, 6.4 ESG Reporting and Climate Change), due diligence will cover the target’s climate-related disclosures and the related strategy. For example, if the company has made public climate commitments, such as pledging to achieve net-zero emissions by 2040, the buyer will evaluate these commitments for credibility and potential legal exposure. For example, could there be allegations of greenwashing or liability if these commitments are not met?

In finance transactions, such as project finance or corporate lending, banks in Switzerland have started to factor climate change considerations into their due diligence processes using ESG risk assessment frameworks. For instance, a lender might examine whether the borrower’s business plan is resilient to climate risks. As another example, if financing a large infrastructure project like a power plant or transport network, banks may consider physical climate risks (flood, heat, etc, affecting the asset) and transition risks (eg, changes to relevant regulatory framework). Further, as large Swiss financial institutions are obliged to disclose climate risks (see 6.1 Climate Financial Reporting), they are incentivised to only lend once they have evaluated how a new project might affect their portfolio’s carbon exposure.

In real estate transactions, climate due diligence is becoming salient. Buyers of property increasingly consider physical climate risks, such as whether a property is in an area prone to flooding or landslides (eg, in the alpine region), which are expected to worsen with climate change. They also consider regulatory changes. For example, if a property still uses oil heating, a purchaser will take into account the likelihood that legislation may soon require an upgrade to a cleaner heating system. Further, an old, poorly insulated building incurs higher carbon taxes and becomes less attractive to potential buyers and tenants, as energy costs rise.

Overall, climate change due diligence in Switzerland involves identifying and assessing potential climate-related risks and opportunities. Prospective buyers of shares or assets want to avoid inheriting hidden carbon liabilities or stranded assets, while capitalising on climate-related opportunities.

Switzerland promotes the uptake of renewable energy technologies through a combination of policy, regulatory and financial support instruments. The country’s energy policy, particularly within the remit of the Energy Strategy 2050, encourages renewable sources such as hydropower, solar photovoltaics, wind power, biomass and geothermal energy. The most widely used renewable sources of Swiss-produced energy are hydroelectric power (accounting for around 60% of the total), followed by wood (just under 20%), and then waste, ambient heat, sunlight, biofuels, biogases and wind in decreasing order of importance. Currently, renewable energy accounts for over 25% of total energy consumption, but this figure is set to increase significantly in the future.

Key support mechanisms, which are usually operated through cost-sharing between the government and the private sector, include feed-in tariffs and subsidies, as well as regulatory measures that reduce the administrative burden of deploying renewables, such as simplifying the process of obtaining planning permissions to install solar panels. Guaranteed grid access for renewable energy producers is another important measure. Furthermore, Switzerland operates a national fund for energy efficiency and renewables (Swiss Energy Research for the Energy Transition, SWEET). Additionally, many cantons have introduced incentives, including tax incentives, to encourage homeowners to replace old oil or gas heating systems with renewable alternatives, such as geothermal heat pumps.

In addition to promoting renewable energy, Switzerland encourages other climate-friendly investments through various policies and regulations. A notable area of focus is energy efficiency and innovation in low-carbon technologies. This aligns with non-market approaches, such as those set out in Article 6.8 of the Paris Agreement (voluntary co-operation between parties without carbon trading).

Key examples (at the federal or cantonal level) include energy efficiency and building retrofitting, such as through the buildings programme, as well as support for low-carbon transport. This includes schemes to expand EV charging infrastructure, tax relief for EVs, significant investment in public transport, and pilot projects for green hydrogen and the electrification of heavy transport. Furthermore, there is strong government support for the development and scaling-up of negative emissions technologies and carbon capture.