One in two companies do not believe the Responsible Business Initiative will have a significant impact on their business
Survey of CFOs
According to a recent Deloitte survey, the mood among Swiss companies is relatively relaxed regarding the upcoming Responsible Business Initiative. Almost half of the CFOs surveyed do not expect any specific implications for their business. Still, nearly 40 percent cite specific negative effects if the initiative is adopted. Around a third assume that their company would need to adjust its risk management, strengthen internal controls and adapt the way it cooperates with suppliers.
The survey of 112 CFOs on the effects of adopting the Responsible Business Initiative shows: Asked about the different factors of effects, many (46%) CFOs are still neutral. Nonetheless, at least 40 percent foresee negative effects for themselves if the initiative is adopted. On average, the respondents also pointed to almost twice as many negative effects as positive.
Companies see the greatest danger in the fact that they cannot comply with the new regulations: Almost a third (32%) of those surveyed cited regulatory risks as the greatest negative impact. Over a quarter (27%) say that they need to monitor their international business activities more closely. More than one fifth (22%) see it as a negative effect that they will have to step up internal controls. A significant proportion of companies also see the effects in these areas as positive; this indicates that companies have already initiated appropriate measures and are therefore already prepared for possible future regulations. (See graphic 1).
Graph 1: Which impact would the adoption of the Responsible Business Initiative (Konzernverantwortungsinitiative) have on the following areas of your company?
No panic at the top
Even if there are still uncertainties about which companies will be affected, the corporate responsibility initiative is not causing panic in the boardrooms of Swiss companies. A relaxed attitude to the initiative is certainly not a bad thing, provided the companies have done their homework.
Adopting the initiative would undoubtedly involve costs. However, only 12 percent of CFOs expect negative effects on corporate finances if the initiative is adopted, while 7 percent believe the effects will be positive. Besides, the initiative would hardly have any impact on production sites or jobs in Switzerland. For two of the seven respondents, the positive effects outweigh the negative ones: Above all, the companies believe that the popular initiative will have positive effects in terms of reputation. Some CFOs see the popular initiative as an opportunity to increase the value of their company.
Only a minority are planning any action
When asked about the measures necessary if the initiative is adopted, only a minority of the CFOs surveyed saw a specific need for action. Three areas are to the forefront: an improvement in risk management and the internal control system (52%), adjustments in cooperation with suppliers (47%) and greater monitoring across the entire value chain (44%). Almost half of the respondents stated that they had already taken action or that they would do so in the event of the initiative being adopted. On the other hand, hardly any companies are already planning to sell entire business units or production facilities in specific markets or even to relocate their headquarters abroad. (See graphic 2).
Graph 2: Which actions have you already taken or would take in case the Responsible Business Initiative would be adopted?
The results indicate that many companies believe the concerns of the Responsible Business Initiative campaign are legitimate and that some of them have already implemented some measures. In the current business environment, it is certainly prudent to manage risks more actively and to improve internal control systems - as was shown not least by the pandemic. Inconsistencies in the supply chain can do a lot of damage to a company's reputation. The influence of consumers and investors on corporate reputation is growing rapidly," explains Reto Savoia.
Need for greater transparency in reporting
The CFOs surveyed frequently mentioned the issue of corporate reporting and just under a third of them say that changes would be required if the popular initiative is adopted. This is something that must not be forgotten: Irrespective of whether the initiative is adopted or the parliamentary counter-proposal comes into force, public reporting on sustainability in Swiss companies will be of significantly greater importance.
This is a positive development, as there is still a lot of catching up to do. Without internal incentives, however, it will remain difficult to anchor sustainability in the company. Thus, more attention could be paid to sustainability criteria when it comes to remuneration. What's more, future sustainability reports will have to meet the same quality criteria as financial reports.
About the survey
The questions on the Corporate Responsibility Initiative are part of Deloitte Switzerland's CFO survey, which has been conducted regularly since autumn 2009. The current 40th CFO survey in Switzerland was carried out online from 31 August to 25 September. A total of 112 CFOs from all key industries and from listed and non-listed companies took part. The full results will be published at a later date.