More than 2500 domestic companies will be required to report on ESG from 2025

The newly formed Sustainability Management Subcommittee of the Business Economics Committee of the Hungarian Academy of Sciences held its first conference in cooperation with the Interdepartmental Standing Committee on Logistics. 

Mária Csutora, Chair of the Sustainability Management Subcommittee, explained in her opening speech, that the event’s relevance stems from EU regulations and the 2023 ESG law, which require more than 2500 domestic companies to make ESG reporting from 2025, to conduct environmental, social, and corporate governance (ESG) audits of their supply chains and prepare sustainability reports. 

Katalin Ásványi introduced the ESG topic by providing a brief theoretical background and outlining the current regulatory framework. She emphasized that sustainability-related audit obligations will expand to include a growing number of companies in the coming years. Research based on interviews with representatives from 11 major domestic companies revealed that collecting sustainability data and meeting regulatory reporting requirements pose significant challenges for business enterprises. However, interviewees noted that shifting the focus from the quantity of sustainability measures to their quality may lead to better overall results. 

Gábor Harangozó highlighted the challenges arising from the diversity of ESG indices and their diffuse application in measuring corporate sustainability performance. He pointed out that the calculation methods and weighting criteria behind the currently used ESG indices are often non-transparent, making it difficult to compare them and resulting in highly methodology-specific outcomes. Harangozó stressed that summarizing ESG performance in a single metric does not replace multi-criteria evaluation. He advocated for self-assessment rather than ranking to determine ESG performance. 

Anita Reizingerné Ducsai presented the principle of double materiality, the changes in auditing processes, and the resulting burdens for the corporate world. A new element of the ESG regulations is the requirement to estimate the financial impacts of ESG-related issues: sustainability declarations must disclose all material information regarding the environmental and social impacts, financial risks, and opportunities related to ESG matters. Reizingerné emphasized that materiality assessments should be the result of dialogue with stakeholders and a comprehensive audit process. Financial impacts must be analysed in short, medium, and long-term horizons.  

Furthermore, companies must evaluate their entire value chain for actual or potential effects on the environment and people. 

Péter Földesi discussed best practices and bad practices in ESG monitoring within logistics. He emphasized that while regulatory advancements are welcome, it is crucial to go beyond superficial compliance with sustainability requirements. Achieving a genuine breakthrough and transformation in societal and economic logic depends on this. 

The presentations were followed by a roundtable discussion involving also non-academic speakers, Antal Vizy from Denso Manufacturing Ltd, Csaba Molnár from the Hungarian Authority for Regulatory Activities, and Péter Bera from the Ministry of Energy. The discussion addressed many aspects of ESG regulation and compliance.  

Antal Vizy spoke about the challenges of medium- and long-term strategic planning in the automotive industry, which also impacts sustainability reporting. Péter Bera stated that one key goal of the regulation is to ensure that companies provide real data on ESG, instead of engaging in greenwashing.  

Csaba Molnár highlighted the critical role universities play in preparing ESG consultants and other professionals. 

Corvinus University is launching a specialized ESG Management Postgraduate Program and an ESG Consultant Education Program in the Spring Semester of 2025, aiming to professionally equip experts to implement the ESG regulations effectively.