Update on greenwashing in Switzerland


On 25 October 2023, the Swiss Federal Council published a press release announcing that the Federal Department of Finance (FDF) will implement the Swiss Federal Council's position on the greenwashing risk in the financial sector by proposing principles-based regulation in an ordinance. The consultation draft of such ordinance will be submitted to the Swiss Federal Council by the end of August 2024 at the latest.

Self-regulation possible

The Swiss Federal Council has announced that the regulation contained in the future ordinance prepared by the FDF could be supplemented by an industry-led self-regulation.

More importantly, the Swiss Federal Council has also specified that if the financial sector is able to present a self-regulation framework that effectively covers the contemplated regulation, the FDF will not seek regulation through an ordinance (i.e. via a state-based regulation).

This remark of the Swiss Federal Council is important because allows for existing self-regulations to be applied outside their current boundaries of a given association, such as the Asset Management Association Switzerland or the Swiss Bankers Association. This remark also highlights the Swiss tradition of self-regulation in the financial sector, which has played an important practical role for many years. It also shows implicitly that state-based regulation is not always required to address specific questions and underpins the pragmatic stance of the administration.

Practical considerations

From a practical perspective, the Swiss Federal Council’s position means that any existing and forthcoming regulation might be influenced by the desiderata of the FDF. That said, this influence will be mitigated by the fact that existing self-regulations have already been drafted taking into account practice and risks relating to greenwashing, but also because the proposed ordinance will be principle based. Often sectorial self-regulations contain more specific and tailor-made provisions than ordinance issued by the Swiss Federal Council even when such provisions remain of a general nature.

Finally, if self-regulation wishes to survive on its own and not as a "crutch" for state regulation, it will probably require recognition by the Swiss Financial Market Supervisory Authority (FINMA) as a market standard in accordance with the Financial Market Supervision Act. It will also have to provide assurances to the FDF that its scope is broad enough to cover all relevant financial service providers, products and services, even if sectorial, in order to avoid potential loopholes.


The announcement of the Federal Council represents a further step towards integrating sustainability principles, particularly for greenwashing prevention, into the Swiss regulatory and legal framework. As already noted, the coming months will be pivotal in determining the future of self-regulation and finding the right balance between self-regulation and state-based regulations.

For more information on sustainability and ESG regulations in Switzerland, contact your CMS client partner or local CMS expert.