Sustainability reporting in the EU and Switzerland : Comparison of implementation practices between Kesko and Migros

Abstract

Corporate sustainability reporting has become critical for businesses to demonstrate accountability, transparency, and long-term value creation. This thesis examines how two leading large retailer groups—Kesko (Finland) and Migros (Switzerland)—implement sustainability reporting under different regulatory frameworks, offering actionable insights for decision-makers navigating the evolving ESG (Environmental, Social, and Governance) landscape. The EU's Corporate Sustainability Reporting Directive (CSRD), which came into force in 2024, required large European companies to publish their first CSRD-aligned sustainability reports in spring 2025. Meanwhile, Swiss companies, such as Migros, align their sustainability reporting with the Global Reporting Initiative (GRI) standards, the United Nations' Sustainable Development Goals (SDGs), and national regulations. An evolving ESG landscape forces businesses to integrate sustainability while ensuring strategic compliance. This thesis compares how mandatory (CSRD) and voluntary (GRI) frameworks shape reporting practices. The study analyzes the differences and similarities in these reporting tools and practices by focusing on the standards of "General Disclosures." These standards are required from companies, regardless of regulatory differences or business sectors. Regarding these standards, the thesis is divided into six explanatory topics, each including a comparative analysis of aspects such as materiality assessment, key sustainability topics and goals, governance, and stakeholder engagement in Kesko and Migros. This approach seeks to answer the core question: What are the similarities and differences in sustainability reporting between Kesko in Finland and Migros in Switzerland, and what best practices can be identified to enhance their sustainability reporting? Using a qualitative comparative approach, the study examines the 2023–2024 sustainability reports of the case companies and incorporates insights from an interview with a member of Kesko's sustainability team (Migros declined participation). The data were analyzed using the Gioia method to identify key themes and practical challenges. The sustainability reports revealed that the global impact of climate change has become a direct priority for both companies. Additionally, the shared concerns of Kesko and Migros are about ethical supply chains and consumer well-being, but their strategies differ significantly. Kesko adopts a short-term, action-oriented approach, setting measurable targets such as a 50% reduction in emissions by 2034 and enforcing strict supplier audits to ensure human rights compliance. In contrast, Migros focuses on long-term systemic change, aiming for net-zero emissions by 2050 and biodiversity protection through certified sourcing. Their materiality assessments also vary: Kesko integrates sustainability risks into its financial risk management system, while Migros evaluates impacts separately across business units using GRI's severity and scope criteria. These distinctions extend to governance structures: Kesko embeds sustainability into core operations, tying executive bonuses to sustainability KPIs to drive accountability. In contrast, Migros centralizes oversight under a dedicated department, monitors progress and involves cooperative member-owners in key decisions. The thesis concludes that no single approach is superior. Finnish and Swiss retail Groups demonstrate that effective sustainability reporting requires contextual adaptation, whether through Migros' mission-driven, long-term sustainability goals or Kesko's financially integrated, progressive targets. To improve sustainability reporting, companies must navigate technical complexity, data gaps, and stakeholder expectations by transforming challenges into opportunities for transparency and strategic refinement.