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The Hungarian ESG Act (Act CVIII of 2023) introduces reporting and due diligence obligations. The regulation is designed to ensure that companies identify and assess sustainability-related risks across their own operations and value chains, and, based on these assessments, implement appropriate preventive and mitigation measures.
Scope of application – Who is affected?
The regulation primarily imposes direct obligations on large companies, whit indirect impacts on suppliers.
Directly in-scope companies include:
- More than 500 employees
- Net turnover exceeding HUF 20 billion
- Total balance sheet exceeding HUF 10 billion
- More than 500 employees
- Net turnover exceeding HUF 90 billion
- Core activity specified under Annex 1 of Act CVIII of 2023
Reporting requirements:
- The ESG report must be prepared and subject to assurance within six months following the end of the financial year.
- From the 2026 financial year, ESG reports must be published on company websites.
The BDO approach:
We support clients in building a structured and practical ESG compliance framework through the following steps:
Implementation timeline
A comprehensive ESG compliance project typically requires 6 to 12 months. Early preparation is therefore essential to ensure the compliance.
Consequences of non-compliance
Compliance with the ESG Act is monitored by the Supervisory Authority for Regulated Activities (SARA) . Non-compliance may result in significant financial penalties and regulatory sanctions, including:
- Requesting information beyond the scope of the official ESG questionnaire
- Conducting ESG data collection from micro and small enterprises before 30 June 2027
- Failure to submit completed questionnaires to SARA
- Failure to register ESG consultants or clients where required
- Failure to implement a supplier readiness programme prior to issuing questionnaires
Penalties may range from HUF 200,000 to HUF 50 million.
How can BDO support you?
ESG compliance is a complex, cross-functional process requiring coordinated legal, operational, and data-related capabilities. With the right support, it can be implemented in a structured, transparent, and efficient manner.
We support our clients in:
- Assessing regulatory exposure
- Defining the compliance roadmap
- Establishing required systems and processes
- Preparing ESG reporting and supporting assurance readiness
Get in touch with us to start your ESG compliance preparation in a timely and structured way.
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