Switzerland has approved a new climate law, paving the way to develop decarbonization strategies

Switzerland said yes to new climate law, Swiss companies to develop decarbonization strategies

On June 18th, Swiss voters showed their support for recent legislation aimed at achieving carbon neutrality. The climate law had previously been dismissed in 2021 due to perceived high costs but reappeared in a revised version.

Known as the Swiss Climate and Innovation Act or the Climate Protection Law, this legislation commits Switzerland to achieving climate neutrality by 2050. It establishes specific reduction targets, measured against the 1990 baseline, for both the medium and long term, focusing on incentives rather than restrictions.

Currently, Switzerland relies on imports for about three-quarters of its energy, including all fossil gas. The government recognizes that these fossil fuel resources are finite and contribute significantly to climate challenges. To address this, the Federal Council and Parliament aim to reduce oil and gas consumption to mitigate environmental pollution and increase domestic energy production. The government sees these objectives as an indirect response to the ‘Glacier Initiative,’ a separate proposal seeking to ban the use of fossil fuels. The new legislation will provide financial incentives, with 2 billion francs allocated over a 10-year period, to encourage the adoption of clean energy and support the transition.

Moreover, the law explicitly requires all Swiss companies to aim for net-zero status in their direct and indirect greenhouse gas emissions from operations (Scope 1 and 2) by 2050. Initially, all Swiss companies, regardless of their listing status, are required to establish a decarbonization roadmap before 2029. This entails either creating new climate plans or evaluating and enhancing existing ones.