Corporate responsibility: what the new federal proposal could change for SMEs

The Federal Council is proposing a new law on sustainable corporate management. SMEs would be excluded from the main direct obligations, but many would remain affected as suppliers, subcontractors or partners of large groups.

On April 1, 2026, the Federal Council opened a consultation on a preliminary draft Federal Act on Sustainable Corporate Management (LGDE, its French abbreviation). The consultation ended on July 9, 2026. As of September 2, 2026, it remains a preliminary draft: the text has neither been adopted by Parliament nor entered into force.

For an SME, the right question is therefore not only “are we below the thresholds?” but also “which customers, markets or supply chains may already be asking us for sustainability data?” This is where the proposal becomes very practical.

Where does the federal proposal stand?

The LGDE responds to two developments. First, a new popular initiative submitted in May 2025 calls for extensive due diligence duties, a binding climate plan, parent-company liability and supervision with sanctioning powers. Second, the European Union revised its sustainability and due diligence rules through the February 2026 “omnibus” directive.

The Federal Council proposes rejecting the initiative and presenting an indirect counterproposal aligned with the European rules considered relevant to Switzerland, without a “Swiss finish”. The consultation ended on July 9, 2026. The next steps are analysis of the submissions, possible adoption of a dispatch by the Federal Council and parliamentary debates. A referendum would remain possible.

No entry-into-force date can therefore be announced at this stage. The preliminary draft also provides that the previous law would continue to apply to financial years underway when the law enters into force and those beginning in the following two years. This transitional arrangement may itself still change.

What would change for very large companies

General due diligence duties

Directly affected companies would have to identify and prioritize actual or potential adverse impacts on human rights and the environment arising from their activities, controlled subsidiaries and certain business partners. In particular, they would have to adopt a strategy and code of conduct, prevent risks, take corrective measures, consult stakeholders, establish a reporting mechanism and document their actions.

Specific thresholds are envisaged for certain foreign companies operating in Switzerland and for franchise or licensing models. The table above presents the main case, not every variation.

A verified sustainability report

The report would cover the environment, social and personnel matters, human rights and governance, including anti-corruption. It would have to follow European standards or other standards recognized as equivalent and undergo external assurance at a limited level. According to the Federal Council, the number of companies subject to reporting would fall from around 200 today to around 110, but requirements would be more standardized and subject to greater scrutiny.

More structured supervision and sanctions

The Federal Audit Oversight Authority’s mandate would be extended to sustainability. For directly regulated companies, the preliminary draft provides, in particular, for corrective measures, an administrative sanction of up to 3% of worldwide revenue for a violation, publication of certain decisions and exclusion from public procurement for up to five years in cases of serious and repeated violations. A maximum criminal fine of CHF 100’000 is also envisaged for certain intentional breaches of reporting obligations.

Why SMEs would remain affected

The preliminary draft excludes SMEs from the new general due diligence duties and mandatory sustainability reporting. However, this does not mean they disappear from the framework. A large company must examine its chain of activities and ensure, according to the level of risk, that its partners comply with its code of conduct.

A supplier could therefore receive requests concerning the origin and composition of raw materials, working conditions, corruption prevention, energy consumption, emissions, certifications, transport or storage. In a high-risk sector or country, expectations could include inspections, training, contractual commitments and, as a last resort, suspension of the business relationship.

The explanatory report estimates that around 100’000 companies are already indirectly affected by European rules along supply chains, 99% of them SMEs. According to the impact assessment commissioned by the Confederation, the LGDE should not increase their overall burden compared with the status quo. This remains an estimate, however: more stringent enforcement in Switzerland could encourage large groups to systematize questionnaires and evidence requirements further.

The safeguards proposed for smaller businesses

The proposal specifically seeks to prevent large companies from transferring their entire compliance burden to suppliers. Three protections are important:

• Due diligence: a regulated company could request information from a partner with fewer than 5’000 jobs only if it cannot obtain that information elsewhere.
• Sustainability reporting: for partners with fewer than 1’000 jobs, only information customary in the sector and consistent with a designated voluntary standard could be requested. The explanatory report cites the VSME standard as a possible example.
• Support: very large companies would have to provide appropriate support to SMEs in their chain of activities, such as templates, platforms, training, help desks or, depending on the circumstances, financing.

Manufacturing and trade secrets would remain protected. The official commentary specifies that a large customer could not require an SME to produce its own full sustainability report or disclose confidential data such as production costs, processes or strategy. However, where necessary information exists only at the supplier, the supplier could be required to disclose it, subject to protection of those secrets.

Example: a Vaud SME supplying an international group

An industrial company with 45 employees manufactures components for a group subject to due diligence duties. It clearly does not exceed the LGDE thresholds and does not have to prepare a statutory report. Its customer may nevertheless ask about the origin of certain metals, workplace safety measures, production-related emissions and the list of subcontractors exposed to a particular risk.

Under the proposed regime, the group would first have to use reasonably available information and limit its request to necessary data. It would also have to offer appropriate support. The SME, for its part, would benefit from providing a consistent file, setting confidentiality terms and giving reasoned refusals to disproportionate requests. In commercial practice, bargaining power does not disappear by decree; a well-organized file helps far more than a “no” sent at 5:58 p.m.

Civil liability: two options remain open

The Federal Council is consulting on two alternatives. The first would introduce a specific rule: a company subject to due diligence duties would be liable for damage it caused abroad through an intentional or negligent breach of those duties. The second would expressly refer to the general rules of the Code of Obligations. In both cases, the proposal excludes liability of the regulated company solely for the conduct of its business partners and provides for special conciliation in Switzerland before litigation.

The argument in favor of the first option is legal certainty and clearer access to compensation. The argument against it is that a new special rule could increase litigation risk and evidentiary costs. Conversely, a simple reference to current law may appear more predictable for businesses but less clear for injured parties. Parliament will have to weigh these considerations.

For a partner SME, excluding the large group’s liability for the SME’s conduct does not grant the SME immunity. It would remain responsible for its own actions under the applicable contractual, tort, criminal or administrative rules. Commitments accepted in a supplier code or contract may also have separate commercial consequences.

What an SME can do now

1. Identify exposure: large Swiss or European customers, public tenders, sensitive sectors, raw materials or international subcontracting.
2. Centralize existing evidence: HR and safety policies, energy consumption, product origins, certificates, supplier checks and anti-corruption measures.
3. Create one reusable response sheet for customer questionnaires, without voluntarily producing an 80-page report nobody will read.
4. Set boundaries for requests: purpose, proportionality, confidentiality, retention period, audit rights and allocation of costs.
5. Assign internal responsibility: one person coordinates the data and checks that it is up to date, with management support.
6. Monitor the proposal: wait for the Federal Council’s dispatch and parliamentary debates before investing in a burdensome system.

How Delta Conseil SA can support you

Delta Conseil SA can help an SME map customer requests, organize available information, allocate internal responsibilities and adapt administrative or contractual clauses. Where the analysis requires environmental expertise, a specialist audit or legal advice on litigation, we coordinate the involvement of the appropriate specialist.

Frequently asked questions

Is the LGDE already in force?

No. Consultation on the preliminary draft ended on July 9, 2026. The text still has to be finalized, submitted to Parliament and adopted. A referendum is possible, and no entry-into-force date has been set.

Will an SME have to publish a sustainability report?

Not under the proposed new general regime. An SME may nevertheless choose voluntary reporting or have to provide targeted data to a customer, bank or investor, or as part of a tender.

Will a large customer be able to demand any information?

The proposal sets limits: necessity, information unavailable elsewhere, customary sector data for reporting-related requests and protection of trade secrets. The precise scope will nevertheless depend on the final text, the ordinance and the commercial contract.

Will the VSME standard become mandatory for SMEs?

The preliminary draft does not make it mandatory. The explanatory report cites it as an example of a voluntary standard the Federal Council could recognize to regulate information requested from companies outside the scope.

Should data collection start now?

Yes, proportionately, if customers already request it or the business is exposed to the EU. No, if this means immediately creating a burdensome system solely because of the Swiss preliminary draft. Starting with existing information is generally the best investment.

Official sources

• Federal Council press release of April 2, 2026, on the new LGDE
• Preliminary draft Federal Act on Sustainable Corporate Management
• Explanatory report on the opening of the consultation
• FDJP thematic dossier on the LGDE
• SECO — Corporate sustainability and current Swiss law
• Code of Obligations, in particular Articles 964a et seq. and 964j et seq.

First published: April 3, 2026

Last legal review: September 2, 2026.