The EU has introduced new ESG (Environmental, Social & Governance) regulations by 2025, some of which also affect Switzerland and other non-EU countries. For suppliers of EU based furniture stores, these rules are of direct importance.
The new legislation aims to achieve the goals of the Paris Climate Agreement, targeting net-zero emissions for all companies by 2050. Companies must reduce emissions and create appropriate plans. Greenwashing regulations apply to all information about the production of goods and services, including supply chains.
According to Lenz & Staehlin (Waser, 2025), Swiss law lacks a general supply chain law for human rights and environmental due diligence but does regulate specific areas:
- Reporting on non-financial matters (Art. 964a ff. OR, Ordinance on Reporting on Climate Matters)
- Due diligence and transparency for conflict minerals/metals and child labor (Art. 964j ff. OR and VSoTr)
Many Swiss companies already adhere to due diligence standards as demanded from customers or partners, regardless of the legal requirements. Additionally, they may be subject to laws from other countries, such as Germany’s Supply Chain Due Diligence Act (LkSG) and France’s Due Diligence Act.
Which EU sustainability regulations are of importance for the international furniture industry?
Overview:
Table: Waser, Astrid; Lenz & Staehlin, Nachhaltige Lieferketten und Beschaffung; Zurich; 2025
Corporate Sustainability Reporting Directive (CSRD)
Came into force on January 5, 2023 EU member states are required to implement the CSRD into national law by July 2024 (several member states are behind schedule).
Significant extension of the scope of non-financial reporting:
– All companies listed on an EU regulated market (except micro-enterprises)
– All companies if they meet two of the following three thresholds (subject to national implementation):
Total assets > EUR 25 million
Net turnover > EUR 50 million
Number of full-time employees > 250
The objective of the CSRD is to enhance transparency and accountability of sustainability information from companies.
Scope of the reporting obligation (excerpt):
– Description of the company’s business model and strategy including corporate policy regarding
sustainability
– Sustainability goals of the company including emission reduction by 2030 and 2050
– Description of the role of the administrative, management and supervisory bodies in connection with
sustainability aspects (including expertise and skills)
– Comprehensive reporting obligations in the area of greenhouse gas emissions
– Comprehensive qualitative and quantitative reporting on topic areas that have been identified as material
according to a double materiality analysis
CSRD enshrines audit obligation for sustainability reports.
Conclusion:
CSRD is highly relevant for non-EU suppliers as that reporting will contain actions to reduce emissions (such as CO2 – shipping!) and the audit obligation for sustainability reports that will include additional and more advanced certificates (e.g. BSCI B etc.).
Corporate Sustainability Due Diligence Directive (CSDDD)
Came into force on July 25, 2024.
EU member states are required to implement the CSDDD into national law by July 2026
Affected companies from non-EU countries: Introduction will take place gradually (thresholds will be adjusted annually from 2027 – 2029):
– EU net turnover > EUR 1.5 billion (2027)
– EU net turnover > EUR 900 million (2028)
– EU net turnover > EUR 450 million, franchisees and licensors depending on turnover and license income
(2029)
Indirectly affected companies from non-EE countries: Supply chain obligations are passed on by directly affected companies to suppliers and business partners.
Directive introduces new obligations for companies with regard to human rights and the environment throughout their entire (upstream and downstream) value chain.
Companies that fall directly within the scope must introduce a risk-based system to monitor, prevent and remedy human rights violations and environmental damage.
Key due diligence obligations:
– Risk analysis (due diligence) to identify, assess, prevent and mitigate actual or potential negative impacts
on human rights and the environment
– Taking appropriate measures if violations are identified and monitoring the effectiveness of measures
taken
– Establishing a complaints procedure for affected persons along the value chain
– Reporting obligation (based on CSRD and ESRS)
– Developing a climate plan that aligns the business model with the 1.5°C target of the Paris Agreement
Directive provides for official supervision (with sanctioning powers) and civil liability for violations (including violations by subsidiaries).
Conclusion:
CSDDD is highly relevant for non-EU furniture producer as affected big customers such as XXXLutz etc. will pass on the supply chain obligations to its suppliers. New and further certifications obligations with regards to human rights and the environment will follow.
EU Deforestation Regulation (EUDR)
The regulation came into force on June 29, 2023. Its implementation has been postponed for one year until the end of 2025. A category for countries classified as «no risk» is still to be determined, which will include China. As it is a regulation, member states do not need to transpose its provisions into national law.
Regulation affects the following raw materials and their products: Cocoa, Coffee, Palm oil, Rubber, Cattle, Soy, Wood.
The aim is to counteract deforestation and reduce the EU’s contribution to greenhouse gas emissions and loss of biodiversity.
The raw materials and products in question may only be placed on the EU market if:
– They were obtained without deforestation, i.e. they do not come from a deforested area or have caused
damage to forests (as of December 31, 2020)
– Relevant legal provisions of the producing country (e.g. nature conservation, workers› rights, human
rights, protection of indigenous peoples) have been complied with
– A due diligence statement is available.
Companies must carry out a due diligence to demonstrate that their products are produced without deforestation:
– Collect information, documentation and data (origin of the product, supplier and producer, geolocation,
etc.)
– Analyse the information and assess the risks (with annual review)
– If risks are discovered: take measures to mitigate the risks
Conclusion:
Generally, foreign companies that export these raw materials or products to the EU will be affected by the EUDR. FSC and PEFC certifications will remain important. Furniture stores will have to conduct audits to comply with EUDR.
How should ESG reporting be integrated into the sustainability strategy?
General strategic approach to meet governmental and customers sustainability needs:
All ESG regulations are typically subject to basic quality. Their fulfilment is expected and may be assumed. Rather, their non-fulfilment represents a risk. By mentioning certificates alone, a company will not create added value for the customer for which an additional price can be achieved – and this must ultimately be possible for economic reasons. There is therefore no way around more far-reaching approaches that intervene more deeply in the business model.