In its response to the consultation of SIX Swiss Exchange on the amendment of the directive on information relating to corporate governance (DCG), Ethos asks that the publication of an annual sustainability report become mandatory for listed companies. The amendment of the DCG proposed in the consultation launched by SIX only requires that companies that wish to publish a sustainability report must do so in accordance with an internationally accepted standard. In Ethos’ view, this proposal is unsatisfactory because it leaves the issuers with the option to not publish a sustainability report at all.

In order to complement the information on governance required by the DCG, Ethos asks that SIX makes the publication of a sustainability report mandatory for listed companies. Ethos considers that the proposal of SIX is unsatisfactory, as it continues to let issuers decide whether it is beneficial to publish a sustainability report.

The publication of a sustainability report leads listed companies to take into account the various environmental and social issues they face. These issues must be validated in a materiality assessment that should be revised regularly by involving the company’s key stakeholders. Reporting requirements towards smaller listed companies could be less stringent than for larger companies when smaller companies face less sustainability issues than larger companies.

Sustainability reporting is a widespread practice

In Switzerland, there are currently no requirements for listed companies to publish sustainability-related information. Of the 204 companies listed on the SPI, Ethos only counts 36 that published a sustainability report according to the Global Reporting Initiative’s (GRI – G4) standards in 2015.

In most G20 countries, States, regulators and stock exchanges have started enforcing mandatory sustainability reporting requirements. Some stock exchanges have even launched an initiative, the Sustainable Stock Exchange Initiative – or SSE – aiming at promoting sustainable development in their listed companies, by requiring among other measures the publication of sustainability reports.

Ethos is of the opinion that the benefits resulting from the publication of a sustainability report largely outweigh the costs. The publication of such a report allows a company to demonstrate to investors that it is conscious of its long-term sustainability issues and that it takes adequate measures to tackle them.

Ethos’ full response to the consultation

Main exchanges/regulators requiring the publication of a sustainability report

Sustainable Stock Exchange Initiative