Hungarian sustainability laws have changed
Hungarian sustainability laws have changed
The scope of entities subject to ESG legislation has been narrowed, and the entry into force of CSRD has been postponed by two years.
On June 17, Parliament decided to amend the domestic ESG legislation adopted in August 2023.
Although large companies of public interest will remain subject to the legislation, the amendment significantly narrows the scope of large companies required to report on ESG: from now on, only large companies with more than 500 employees and at least HUF 90 billion in sales, operating in specific industries – a total of about 120 companies – will be required to prepare ESG reports.
In addition, the regulations have been simplified in several areas: For example, micro and small business suppliers will not have to be screened until June 30, 2027, and until that date, medium-sized enterprises will not be required to complete the ESG questionnaire, but may do so voluntarily.
It is important to note that reports and certifications for the 2024-2026 financial years must be prepared. However, they must not be submitted to the Supervisory Authority for Regulatory Affairs (SZTFH) or made public.
ESG reports for 2024, which only large companies of public interest are required to prepare, do not need to be certified. However, the SZTFH may check the existence of the reports at any time, so their preparation remains mandatory.
Another significant change is that, instead of the previous three months, business relations with suppliers with whom environmental or social violations cannot be resolved after repeated attempts must now be suspended for 30 days. However, it is not mandatory to terminate business relations permanently in any case.
In addition to the ESG Act, the accounting law transposing the EU's CSRD legislation into domestic law has also been amended, and the Omnibus “stop the clock” regulation has been transposed. The scope of those subject to the obligations has not changed, but large companies are not required to apply the CSRD obligations and compliance for the year starting in 2025, but for the financial year starting in 2027, meaning that the first sustainability report must be published in 2028.
BDO was one of the first to obtain the accreditation essential for ESG consulting activities, and we have already been entrusted by a number of large companies to manage their ESG compliance processes. We therefore have significant experience in ensuring compliance with legal requirements and have developed a number of methodologies – for example, in relation to supplier due diligence processes, risk management, and complaint handling systems – that support your company's legal compliance.
We are happy to put our experience and expertise at your disposal to ensure that the ESG compliance process causes as little stress and effort as possible for your company.
If you would like to know whether the ESG law applies to you, or if we can support you in other sustainability issues, please feel free to contact us (esg@bdo.hu).
Request a free consultation in person or online, where we will be happy to tell you how and in what ways we can help you, and also why you should choose us.
On June 17, Parliament decided to amend the domestic ESG legislation adopted in August 2023.
Although large companies of public interest will remain subject to the legislation, the amendment significantly narrows the scope of large companies required to report on ESG: from now on, only large companies with more than 500 employees and at least HUF 90 billion in sales, operating in specific industries – a total of about 120 companies – will be required to prepare ESG reports.
In addition, the regulations have been simplified in several areas: For example, micro and small business suppliers will not have to be screened until June 30, 2027, and until that date, medium-sized enterprises will not be required to complete the ESG questionnaire, but may do so voluntarily.
It is important to note that reports and certifications for the 2024-2026 financial years must be prepared. However, they must not be submitted to the Supervisory Authority for Regulatory Affairs (SZTFH) or made public.
ESG reports for 2024, which only large companies of public interest are required to prepare, do not need to be certified. However, the SZTFH may check the existence of the reports at any time, so their preparation remains mandatory.
Another significant change is that, instead of the previous three months, business relations with suppliers with whom environmental or social violations cannot be resolved after repeated attempts must now be suspended for 30 days. However, it is not mandatory to terminate business relations permanently in any case.
In addition to the ESG Act, the accounting law transposing the EU's CSRD legislation into domestic law has also been amended, and the Omnibus “stop the clock” regulation has been transposed. The scope of those subject to the obligations has not changed, but large companies are not required to apply the CSRD obligations and compliance for the year starting in 2025, but for the financial year starting in 2027, meaning that the first sustainability report must be published in 2028.
BDO was one of the first to obtain the accreditation essential for ESG consulting activities, and we have already been entrusted by a number of large companies to manage their ESG compliance processes. We therefore have significant experience in ensuring compliance with legal requirements and have developed a number of methodologies – for example, in relation to supplier due diligence processes, risk management, and complaint handling systems – that support your company's legal compliance.
We are happy to put our experience and expertise at your disposal to ensure that the ESG compliance process causes as little stress and effort as possible for your company.
If you would like to know whether the ESG law applies to you, or if we can support you in other sustainability issues, please feel free to contact us (esg@bdo.hu).
Request a free consultation in person or online, where we will be happy to tell you how and in what ways we can help you, and also why you should choose us.