ESG regulation: why early preparation is crucial for hungarian businesses

The new Hungarian ESG legislation being in force since 1 January 2024 will bring significant changes for Hungarian companies. This law is a key regulation on corporate sustainability, focusing on environmental (E), social (S), and governance (G) principles. Aligned with the European Union’s CSRD legislation, it sets strict reporting requirements, especially for large corporations.

Scope and consequences of the law

According to the legislation, starting in 2024, every company that employs over 500 people, has a balance sheet total of more than 10 billion forints, and at least 20 billion forints in revenue, is required to produce an ESG report. This obligation primarily extends to publicly traded or financial sector companies but also indirectly affects smaller, mid-sized businesses such as suppliers.

Indirect effects of the ESG law

The new regulation requires large companies to monitor not only their own environmental performance but also that of their suppliers. This includes measuring carbon emissions and other environmental and social impacts. This process is time-consuming and complex. but essential for maintaining competitiveness. Delays or inadequate measures can lead to significant market disadvantages.

The benefits of early preparation

Companies that proactively adapt to ESG requirements not only meet the legal requirements but can also enjoy several additional benefits. These include more favorable bank financing options, cost optimization, and a more attractive employer image, which is particularly important for Generation Z.

Seeking partnership for ESG consulting

Our company is actively looking for reliable partner firms that can provide expert consultancy on ESG compliance. Our goal is to offer high-quality, tailored advisory services to our clients, helping them to integrate ESG requirements and develop sustainable business practices.