The quality of Swiss listed companies’ sustainability reports during this year’s annual general meeting (AGM) season “was poor”, according to Swiss pension funds-backed Ethos Foundation.
In its first sustainability report, Ethos looked at the past AGM season, conducting an analysis on 140 listed companies in Switzerland, finding “major shortcomings”, concluding that their sustainability reports “often lack independent verification, ambitious targets or key information”, it said.
A minority of Swiss listed companies (44%) have reported on the CO2 emissions of their supply chains, Ethos found. Only 25 companies have set short-term reduction targets consistent with a 1.5ºC degree global warming scenario, confirmed by an independent organisation (Science Based Target Initiative).
Companies are bound to fail to design credible and ambitious environmental and climate strategies to meet climate targets, it added.
Ethos’ research also found that 75 out of 143 companies published a sustainability report according to internationally recognised standards of the Global Reporting Initiative, Sustainability Accounting Standards Board, and European Sustainability Reporting Standards.
It also showed that 46 companies, including Alcon, Nestlé, Partners Group, Swiss Re and Zurich Insurance Group, did not apply the standards in full, and sustainability reports of 82 companies did not undergo an independent review.
The report noted that 40% of the companies submitted reports for approval at AGMs this year, even though the country’s corporate sustainability regulation from this year requires Swiss companies with 500 or more employees, CHF20m (€21.3m) total assets and a turnover of CHF40m, to publish a sustainability report. The legislation affects around 300 companies.
Therefore, Ethos backs more stringent corporate sustainability requirements proposed by the Federal Council, akin to those valid in the European Union, and applying to companies with 250 employees, CHF25m in total assets and a turnover of CHF50m. This would extend the rule to around 3,500 companies.
The Federal Council wants to oblige companies to publish a sustainability report only if they hit two of three thresholds as mentioned, for two consecutive years. This year 40% of the companies submitted sustainability reports to shareholders, demanding a consultative, and not binding vote.
Ethos said that in the future the corporate reporting law should specify the consequences for companies rejecting a binding vote.
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