City Sky

Responsible Business Initiative

The results of the vote on the Responsible Business Initiative explained

On Sunday, 29.11.2020, the popular initiative "For responsible companies - to protect people and the environment" was rejected. The cantonal vote sealed the fate of the initiative. However, the initiative succeeded in capturing 50.7% of the popular vote.

The counter-proposal will enter into force after the deadline of the optional referendum of 100 days, provided that no optional referendum is held. But what does this mean exactly for Swiss businesses? What does the counter-proposal entail? We have compiled the most important information for you here.

We believe that, in capturing the popular vote, corporate responsibility and sustainability as well as the respect of human rights in value chains is an important concern for the Swiss population. This gives us an even stronger incentive to support our current and potential members in their engagement for responsible and transparent business practices.

We would like to join forces and invite companies and organisations to take this call very seriously, as our credibility will rely on our actions.

What are the consequences for companies?


The Federal Council will determine the transitional provisions and their date of entry into force in the course of 2021. The exact date is not yet known. It can be assumed that due diligence and reporting obligations will be introduced quickly. There will be a transitional period so that the companies concerned can prepare themselves and know from which year they must report. Until then, it is important that companies, especially the UNGC Signatories and Participants, continue to take on social and environmental responsibility on a voluntary basis and commit themselves to the implementation of Agenda 2030 (SDGs).


We will provide timely information on the decisions of the Federal Council.




What will change?


Reporting obligation
Public companies and large financial institutions domiciled in Switzerland are now subject to a statutory annual reporting obligation for transparency on non-financial matters.


Who is affected (scope)

  • Public companies and large financial institutions

  • Companies which, together with the domestic or foreign companies they control

    • employ at least 500 people

    • a balance sheet total of CHF 20 million or

    • sales revenue of CHF 40 million in two consecutive financial years.

Exempt companies are those controlled by a company that is required to report, or to
prepare an equivalent report under foreign law.

Accountability
The reports on non-financial issues (Sustainability Report, CSR Report, Communication
on Progress of the UN Global Compact etc.) provide accountability on:

  • Environmental concerns, especially CO2 targets

  • Social concerns

  • Employee concerns

  • Respect for human rights

  • Fight against corruption

Content of the reports

The report shall include in particular

  • A description of the business model

  • Policies for the above-mentioned issues and the due diligence procedures applied and carried out

  • The measures taken to implement and evaluate (measure) the effectiveness of these measures

  • A description of the main risks and how to deal with them

    • risks from our own business activities

    • risks arising from the business relationship, products (goods) and services, provided they are relevant and proportionate

  • Key Performance Indicators (KPI) related to the above issues

Standards
If the report is based on standards (OECD, UNGC, GRI, etc.), these should be mentioned. They must meet all the requirements set out in the law.
Further requirements:

  • Activities of subsidiaries and controlled companies must be included in the report

  • If policies for specific issues (e.g. corruption) are missing, reasons must be given

  • The report can be written in a national language or in English

  • The report must be signed by the highest governing or responsible body

  • The report must be approved by the body responsible for approving the annual accounts

  • The report must be published electronically and remain accessible for at least ten (10) years

Special duties of care and transparency regarding minerals and metals from
conflict areas and child labour

Companies operating in the risk sector of minerals and metals from conflict areas and
offering products or services that could be produced by child labour are subject to
additional supply chain due diligence and reporting requirements.

Companies that are affected

  • Have in their supply chain minerals containing tin, tantalum, tungsten or gold

    • Who offer products or services where there are reasonable grounds for suspecting the use of child labor

  • Exceptions are determined by the Federal Council (small quantities, exemption for small companies)

Mandatory management system
The companies concerned are obliged to operate a management system. It contains:

  • A supply chain policy on conflict minerals and child labour

  • A system for tracing the supply chain

Companies identify and assess risks, draw up a risk management plan, take measures to
minimise risks. An inspection by an independent expert is mandatory. The Federal
Council issues more detailed regulations based on the OECD guidelines. The same rules
apply to reporting as for "transparency on non-financial matters" (refer to the above).


Sanctions
Companies will be fined if they intentionally or negligently violate these new rules (up
to CHF 100,000).




Our recommendations


These new rules mean a significant strengthening of due diligence and reporting obligations.


We recommend that all companies of all sizes familiarise themselves with the details.


The UNGC as a platform is well positioned to support companies in meeting the new requirements, provided that they prepare the annual communication of progress reports (COP) or sustainability reports in accordance with the ten principles of the UNGC. Some adjustments may be necessary.


A management system, indicators (KPI) and their measurement are mandatory for the companies concerned. It is also to be expected that in the coming years the requirements for all companies (SMEs and large companies) will become stricter internationally. (EU non-financial reporting directive, EU mandatory human rights due diligence, Loi de vigilance in France, German supply chain law etc.).

This means that companies should be prepared for stricter requirements. This results in the following recommendations:

Strategy

  • Social, economic and ecological responsibility belong together. Innovative companies see this "triple bottom line" as the basis of their business activities.

  • The Boards of Directors are increasingly sensitised to this issue. They are strategically addressing the issues of ecological and social sustainability, their potential and risks.

  • Questions of social and environmental sustainability are a central component of corporate strategies, business processes and shape corporate culture.

  • Companies deal with the potentials of "Agenda 2030" and the "Sustainable Development Goals" (SDGs). These offer a framework for a sustainable economy.

Processes and innovation

  • Companies know their value chains. They deal with the opportunities and risks and monitor especially the ecological and social risks.

  • According to the OECD guidelines, ecological and human rights due diligence is one of the core tasks of every company, regardless of its size. Risks are continuously monitored and documented in the business processes. An adapted management system for recording data and monitoring processes is strongly recommended (this was legally required in the counter proposal)

  • Companies are looking for opportunities by consistently using innovative solutions in the environmental and social fields to improve the quality of their products and services.

  • Companies internally promote a "culture of social, economic and ecological responsibility and sustainability". This minimises risks and promotes innovation. Employees are informed and trained accordingly.

Reporting and accountability

  • The legal requirements for transparency and reporting will continue to increase. Companies are recommended to use reporting as a strategic management tool. It allows transparency towards a) the board of directors, b) management, c) employees, d) suppliers, customers and other stakeholders. It serves to further develop a positive and successful corporate culture.

  • Good reporting, adapted to the company's size, structure and market positioning, enhances credibility, meets legal requirements and helps to meet the expectations of society. For SMEs this can be done in a concise form. Large companies comply with standards and legal requirements (GRI, OECD etc.).

Stakeholders

  • Companies involve internal and external "stakeholders", in order to receive regular feedback on risks and potentials.

  • Companies obtain the necessary knowledge, network with relevant people, actors and networks that match their market position and requirements.




Offers of the Global Compact Switzerland & Liechtenstein


The members of the Global Compact Network Switzerland & Liechtenstein can take advantage of our offers and services. We are happy to provide support with questions, access to information, training and exchange of experiences. By actively participating in the UN Global Compact network, companies commit themselves to implementing the Ten Principles on human rights, labour standards, environment and anti-corruption step by step and to report annually on the progress achieved.
The network provides the necessary support.
This prepares companies for current and future legal requirements. However, an active engagement with the various topics is a prerequisite.
The following offers are planned for the coming months:

  1. Informational webinar: Votingresults on the RBI – Expectations for companies (3.12.20, one hour each, offered in three languages)
  2. Support for specific questions: info@globalcompact.ch or 044 421 35 75
  3. Introductory training on corporate environmental and social responsibility (RBC/CSR) and the approaches of the UN Global Compact (regular events)
  4. Webinar series on Human Rights Due Diligence
  5. Human Rights Due Diligence training programme
  6. Webinars and trainings on reporting
  7. Training and working group on supply chain management (in cooperation with öbu)
  8. Pre-evening dialogues on various sustainability topics (regular events)
  9. SDG programmes (how to use the Agenda 2030 for innovation)
  10. Dilemma dialogues on sensitive issues (closed events)
  11. Access to the various UN Global Compact platforms (international)
  12. Regular information on national and international regulatory developments (in cooperation with ecofact)