In a bid to enhance transparency, comparability and accountability of corporate sustainability disclosure, the European Commission, in 2021, replaced the Non-Financial Reporting Directive (NFRD) with the Corporate Sustainability Reporting Directive (CSRD). The resulting European Sustainability Reporting Standards (ESRS) provided detailed guidelines for compliance on a wide range of issues including climate change, social responsibility and corporate governance.
Consequently, companies carried out double materiality assessments, conducted gap analyses, implemented data collection systems, and hired people, consultants and auditors. The largest companies (in the first wave) even produced and published extensive sustainability statements as part of their annual reports.
Then in February 2025, following months of rumours, leaks and media coverage, the Omnibus legislative package was formally introduced to “simplify EU rules, boost competitiveness, and unlock additional investment capacity.” These changes have impacted thousands of EU-based and international companies, including Swiss businesses.
Since the introduction of the Omnibus package, much has happened, and a clearer picture of what is likely to replace the CSRD and ESRS is starting to emerge. The shift ostensibly aims to reduce bureaucracy for companies and those responsible for corporate reporting, providing businesses with a better platform for differentiation and stakeholder engagement.
Omnibus updates
The Omnibus package follows two main tracks that could impact Swiss companies operating in or engaging with EU markets. The first track, known as the “Stop the Clock” Directive, which passed on 16th April 2025, sets out a two-year postponement in the implementation of sustainability reporting requirements for companies falling under Waves 2 and 3 of the CSRD. This means businesses now have additional time to prepare and align their systems with the new requirements, potentially easing the initial compliance burden.
The second legislative track, the Context Directive, is more nuanced and politically sensitive and focuses on revising the thresholds and scope of companies subject to CSRD. As negotiations are ongoing, the final details remain uncertain, but any adjustments could significantly reshape which entities are required to report and how reporting duties are defined.
In parallel with these legislative changes, the European Financial Reporting Advisory Group (EFRAG) has been mandated to streamline the ESRS, to ensure disclosures are aligned with global frameworks like the International Sustainability Standards Board (ISSB). Expected to conclude by 31 October 2025 (though there is growing uncertainty whether this deadline will be met), the focus will be on eliminating low-priority data points, placing greater emphasis on quantitative rather than narrative disclosures to enhance clarity, and improving interoperability with international standards.
Timeline Recap
Considerations for Swiss Companies
Although the CSRD is an EU regulation, its reach extends beyond EU borders. Swiss companies with significant operations or presence in the EU may be directly subject to these rules. Even for those not legally obligated to comply, the global interconnectedness of supply chains and financial markets means that indirect impacts will be widely felt across the Swiss business landscape.
The new rules set out by the Omnibus Package are outlined below:
- Non-EU companies with fewer than 1,000 employees may now be exempt from mandatory reporting, offering some relief to mid-sized Swiss enterprises.
- Non-EU firms are now only subject to CSRD requirements if they generate more than €450 million in net turnover within the EU, up from the previous €150 million.
- EU branches of non-EU companies must exceed €50 million in turnover to fall within scope.
Since EU companies must report on ESG impacts across their entire value chain—regardless of supplier location—Swiss firms, even if technically out of scope, will likely be asked to provide relevant data. This presents a strategic opportunity for Swiss businesses to strengthen their position in the EU market by proactively adopting the CSRD or Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME), and working collaboratively with EU companies in scope. This paves the way for Swiss companies to become preferred partners, demonstrate exemplary compliance and solidify business relationships.
Domestically, the Swiss Federal Council has acknowledged the need to align non-financial reporting provisions with EU standards and initiated a consultation procedure in June 2024 to revise the Code of Obligations (CO). By adopting CSRD-aligned reporting, Swiss companies can enhance their appeal to EU and global investors, positioning themselves as transparent and responsible market participants. Furthermore, early alignment can provide a competitive edge in global markets, especially as other jurisdictions move toward similar ESG frameworks. Companies that act now will be better prepared for future regulatory shifts.
From an internal management perspective, embracing sustainability standards offers firms several strategic advantages and insights. Double materiality assessments (DMA) reveal financial and impact-related risks, providing a more holistic view of the business and uncovering hidden vulnerabilities (and opportunities) to support resilient and informed decision-making. At the same time, robust sustainability reporting structures deliver operational benefits by improving data collection and traceability, strengthening governance processes, enhancing efficiency, and cutting costs. Companies that treat ESG reporting as a strategic tool—not merely a compliance exercise—stand to gain economically and reputationally in an increasingly sustainability-driven global economy.
Key Takeaways and Next Steps
Despite the CSRD delays, sustainability reporting is here to stay. Companies must now determine their CSRD timeline and communicate it internally. This is the ideal time to upskill the workforce, ensure the business is well-prepared and briefed, boost engagement and avoid the inefficiencies and costs associated with a rushed implementation.
The "Stop the Clock" Directive grants a valuable two-year extension. Second—and third-wave companies should be proactive, using the time to stay ahead of the curve. Many first-wave companies started too late, particularly with their Double Materiality Processes. The final run-in became unnecessarily stressful, and ultimately, by not allocating the time necessary to complete the process effectively, they risked non-compliance with the regulations.
Organisations now have the advantage of learning from first-wave reporting companies, either by reading their reports or by directly discussing the processes, challenges, and good practices with the authors and teams behind the reports or the advisors who supported them.
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