Corporate social responsibility: a counter-proposal that is causing division even within supply chains

The Federal Council wanted to strike a middle ground. However, its indirect counter-proposal to the new initiative on responsible business finds itself caught between two stools: too burdensome for parts of the business community and the right, and too timid for the initiative’s proposers and the left. Behind this highly political debate lies a very practical question for Swiss companies: who will have to document what, how far up the value chain, and what impact will this have on suppliers?

The proposal is primarily aimed at very large corporations. But, as is often the case with compliance, the standards may trickle down to SMEs: supplier questionnaires, contractual clauses, certificates, traceability requirements. Even when a small or medium-sized enterprise is not directly covered by a law, it may feel the effects if it works for a client who is affected.

A second round following the 2020 referendum

The issue of responsible business is back on the federal agenda with particular urgency. In 2020, the popular initiative ‘Responsible Business – to protect people and the environment’ failed at the ballot box, despite a majority of the electorate, because it failed to secure a majority of the cantons. An indirect counter-proposal subsequently came into force in 2022, introducing sustainability reporting requirements to supplement the annual report for the multinationals concerned. The initiators, however, believe that this measure has had no significant effect.

A new initiative was tabled in May 2025. It aims to impose binding rules on Swiss multinationals to ensure they respect human rights and environmental standards in their business activities. In response, on 2 April 2026 the Federal Council launched a consultation on a new indirect counter-proposal, with a deadline set for 9 July 2026.

An indirect counter-proposal does not formally replace a popular initiative in the Constitution. It proposes a legislative amendment designed to address some of the initiators’ concerns whilst offering a more targeted or workable solution. It is precisely this balance that is currently the subject of debate: should large companies be subject to stricter regulation, or should we avoid imposing obligations that the business community considers burdensome?

The 5,000-employee threshold: at the heart of the controversy

The text put out for consultation takes the form of a special law on sustainable corporate governance. According to the published details, it would introduce duties of care and transparency for large companies, whilst excluding SMEs from its direct scope. The companies targeted would be multinationals with at least 5,000 employees and a turnover of at least 1.5 billion francs.

These two concepts – due diligence and transparency – warrant clarification. Due diligence refers to the idea that a company must identify, prevent and address certain risks associated with its activities, particularly where these relate to human rights or the environment. Transparency refers to the obligation to explain publicly, in a structured manner, what has been analysed, what measures have been taken and how the company monitors these risks. In practice, this involves internal processes, clearly defined responsibilities, documentation and, in some cases, the reporting of information from subsidiaries or suppliers.

The choice of threshold is one of the most sensitive issues. For the petition’s initiators, it is too high and would exclude companies whose activities may nevertheless pose significant risks. The commodities sector is the focus of criticism: of the 975 commodities traders operating in Switzerland, only half a dozen would meet the threshold of 5,000 employees, whilst many would meet the turnover criterion. Opponents of tighter regulations, on the other hand, see this as a necessary limit to prevent complex obligations from being extended to too many players.

This tension is a classic feature of economic regulation. The lower the threshold, the broader the coverage, but the more the administrative cost is spread out. The higher the threshold, the more the burden is concentrated on a few large groups, but the greater the risk of grey areas. For an SME, the challenge is therefore not just to determine whether it itself exceeds the legal threshold. It is also to understand whether its customers, parent companies or business partners might be affected.

Business, political parties, NGOs: no one is backing the same compromise

The consultation reveals a fragmented landscape. The PLR rejects the counter-proposal, arguing that it is aligned with the initiative, that it puts Swiss companies at a disadvantage internationally and that it creates legal uncertainty. The party believes that Swiss companies already fulfil their responsibilities and instead calls for competitive framework conditions, greater legal certainty and fewer burdens.

The SVP sees the text as a direct transposition of the initiative’s main demands, without any genuine compromise. Swissmem also rejects the draft in its entirety. The Swiss Technology Industry Association sees it as an attack on the existing economic system and fears that bureaucracy will harm the business environment. Scienceindustries also criticises the move, arguing that the Federal Council risks going beyond international trends and sending a negative signal.

The Centre takes a more nuanced stance. It supports the principle behind the objectives, but considers that the draft goes too far on several points and creates new risks, particularly for SMEs. This position clearly illustrates the political difficulty of the issue: few stakeholders openly dispute the importance of human rights or the environment, but disagreements centre on the degree of regulation, legal liability, the scope and the costs of implementation.

At the other end of the spectrum, the PS believes that the proposal does not go far enough. In its view, it only partially incorporates the key elements of European regulations and leaves gaps, particularly regarding liability and the organisation of monitoring. The Green Liberal Party (PVL), for its part, would like to see additional measures to support SMEs, such as a temporary increase in the number of contact points or support services during the implementation phase. The Coalition for Responsible Multinationals and Amnesty International Switzerland also consider the counter-proposal to be insufficient, particularly due to its scope.

Why should SMEs have to comply with a proposal that does not directly target them?

For many SME managers, the initial reaction will be to note that the announced thresholds exclude them. This is correct in terms of direct applicability, according to the available information. But this interpretation is incomplete. Within supply chains, the obligations of large companies often result in requests being made to suppliers: information on the origin of products, internal policies, contractual commitments, codes of conduct, evidence of checks or explanations regarding certain processes.

An industrial SME, a specialist service provider, a distributor or a subcontractor may therefore be required to answer more specific questions from a client subject to due diligence obligations. The client will seek to demonstrate that it has identified its risks and taken reasonable measures. For the supplier, the issue then becomes as much a commercial one as a regulatory one: the ability to respond quickly and effectively can be a deciding factor in a business relationship.

It would, however, be unwise to turn every SME into a mini-compliance department. The most pragmatic approach is to build on what already exists: supplier contracts, general terms and conditions, quality procedures, procurement policy, insurance, HR documentation, product traceability or partner selection. In many companies, useful elements are already in place, but scattered. Bringing them together, updating them and identifying sensitive areas can help avoid having to come up with improvised responses when the first questionnaire arrives.

Fiduciaries, accountants and administrative managers also have a role to play. Not to provide a definitive legal answer on their own, but to help organise the information. A company that knows where its contracts are, can identify its main suppliers, maintains consistent documentation and distinguishes its high-risk activities from its day-to-day operations will be better prepared. Depending on the sector, specialist advice may be required, particularly where contractual commitments go beyond a simple declaration of intent.

A consultation that signals, above all, a battle over feasibility

The current debate is not merely about a moral or reputational issue. It concerns how Switzerland wishes to balance corporate responsibility, competitiveness and legal certainty. The Federal Council states that it is seeking a framework that protects human rights and the environment whilst preserving economic competitiveness and limiting administrative burdens and costs. The reactions show that this equation has not yet been resolved.

For businesses, the sensible approach is to follow the rest of the process without jumping to conclusions. The draft is currently under consultation and may still evolve. The thresholds, monitoring mechanisms, scope of obligations and alignment with international practices will be decisive. An SME would be ill-advised to take on too much before the final framework is known, but it would be wrong to ignore the signal: expectations regarding accountability, transparency and documentation are rising in commercial relations.

Time will tell whether the counter-proposal succeeds in defusing the new initiative or whether it itself becomes a point of contention. In any case, the underlying trend is clear for Swiss businesses: sustainability is gradually moving away from the realm of communication and into that of processes, contracts and evidence. It is here, far more than in campaign slogans, that SMEs will have to gauge the concrete effects of the debate.