ESG-related Activities

The global challenges of the 21st century exert mounting pressure on economic actors to pursue more responsible and transparent practices, especially in the fields of environmental protection, employees, local communities, and corporate governance. The ESG framework, which integrates environmental, social and corporate governance aspects, is emerging as an increasingly important factor for businesses in securing access to finance, maintaining their reputation and their position in the global competition.

In pursuit of the UN’s Sustainable Development Goals (SDGs) and the 2050 climate neutrality objective, the European Union has put in place a continuously expanding policy, legislative and support-scheme framework.

Hungarian enterprises are experiencing growing pressure from the EU, economic partners, and financial institutions to comply with sustainability reporting requirements. In order for companies, especially SMEs, to remain competitive, the Hungarian National Assembly adopted the ESG Act in 2023 with the aim of streamlining corporate sustainability requirements and standardising reporting in a methodological framework supported by modern, 21st century tools.

The Hungarian ESG regulation is entirely in line with EU legislation, including the EU taxonomy regulation and the Corporate Sustainability Reporting Directive (CSRD). One of its primary goals is to prepare the corporate sector for compliance with the Corporate Sustainability Due Diligence Directive (CSDDD) to be applied form 2027.

Under the ESG Act, companies subject to the legislation must establish an ESG complaint handling and risk management system, which also includes screening their supply chain. Companies are required to prepare a publicly available ESG report each year, outlining the processes in place, the data collected and their overall ESG performance.

The law will be implemented in phases. Under the ESG Act, the deadlines for companies to meet their sustainability reporting obligations vary depending on their size and public interest status. In the first phase, from 2025, the largest companies will be required to prepare an ESG report.

SARA is responsible for enforcing the ESG Act and supervising companies and ESG intermediaries, such as ESG consultants, certifiers, qualifiers, as well as the software, to ensure compliance with existing legal obligations. SARA will develop and operate an ESG Management Platform to assist companies in providing the necessary information and compiling their reports.

SARA’s work contributes to creating a sustainable and transparent business environment in Hungary, which, in the long term, will exert a positive impact on economic growth and corporate social responsibility.

By complying with ESG regulations, companies can effectively manage risks, contribute to sustainable development, and boost their competitiveness in the global market.