Switzerland commits to climate neutrality by 2050: A call for action

Dr. Astrid Offenhammer
Senior Manager, Sustainability Regulation Corporates, PwC Switzerland

Dr. Sebastian Klotz
Manager, Sustainability and Digital Technology, PwC Switzerland

On 18 June 2023, 59.1% of the Swiss voters approved the Climate and Innovation Act and its principal goal to reach climate neutrality by 2050. The Act aims to reduce greenhouse gas (GHG) emissions and to promote the application of negative emission technology, to adapt to and protect against the effects of climate change, and to direct financial flows towards low carbon and climate change resilient development.

To achieve climate neutrality by 2050, the Act lays out both overall and sector-specific emission reduction targets, offers expert advice and financial support for businesses, and proposes risk-reducing measures for investments in public infrastructure that is required for achieving the net zero target.

What is the timeline?

The Act aims to reduce overall emissions by 75% by 2040 and by 100% by 2050 (relative to the year 1990). To achieve this goal, the Act proposes specific targets for the building sector (82% by 2040; 100% by 2050), the transport sector (57% by 2040; 100% by 2050), and the industrial sector (50% by 2040; 90% by 2050). Importantly, this includes both direct and indirect emissions. Direct emissions are GHG emissions that are owned or controlled by the business. Fumes that are caused during the manufacturing of products are one example. Indirect emissions are GHG emissions created as a consequence of the activities of the business but which occur at sources owned or controlled by another business. The purchase of energy, whether electricity, steam, heat, or cooling is one example of indirect emissions.

The Swiss understood that the climate law is essential to take a first step and inscribe in Swiss law a clear objective for 2050. When you have a clear objective, you can then put in place the necessary measures.

Céline Vara, Green Party of Switzerland (GPS)swissinfo.ch

What is the role of business?

The private sector plays a key role in achieving climate neutrality by 2050. Businesses and sectors which create action plans by 2029 may benefit from expert advice on the reduction of emissions and the alignment with international standards.

In addition, businesses may benefit from financial support of up to CHF200m per year until 2030 for the adoption of new technologies and processes. The Act puts particular emphasis on negative emission technologies which seek to remove CO₂from the atmosphere and bind it permanently in forests, soil, wood products, or other carbon stores.

What is the role of the public sector?

The private sector’s efforts are supported by the public sector in various ways. For one, the Swiss government aims to implement risk-reducing measures for investments in public infrastructure that is required for achieving the net zero target. Second, the government recognises the important role of the financial sector and therefore plans to conclude agreements on measures that reduce the climate impact of national and international financial flows. Third, the federal and cantonal administrations are committed to act as role models when it comes to achieving the goal of climate neutrality and adapting to the effects of climate change. By 2040, the central federal administration aims to achieve net-zero emissions. In addition to direct and indirect emissions, this commitment also includes so-called scope 3 emissions which occur in its upstream and downstream activities and are caused by third parties.

How can we support you?

The referendum on the Climate and Innovation Act presents another milestone for Switzerland’s transition to climate neutrality. While setting of transition plans and reporting on them is already becoming of relevance for companies subject to the indirect counterproposal of the Responsible Business Initiative, this new law will now provide incentives also for other companies to do the same. We can help you

Calculate your GHG emissions and set-up a transition plan
Identify how your business can benefit from the financial incentives made available
Set up a reporting on your climate journey, as a TCFD report or comprehensive sustainability report

While the cornerstones of the Act are clear, many operational questions remain open.

To explore these and other questions, please reach out to us. We look forward to supporting you in your transition to a more sustainable and innovative future.