According to the latest research, Hungarian companies have made significant progress in addressing sustainability challenges. The vast majority of the companies concerned have already taken serious steps towards sustainable operations and have recognized that this is not just a regulatory obligation, but can also be a strategic competitive advantage.

High level of preparedness

According to the research data, almost all reporting companies, 88 percent, have a sustainability strategy, while eight out of ten companies have a dedicated ESG officer. This high rate shows that the Hungarian corporate sector takes sustainability requirements seriously and is proactively preparing for future challenges.

The appointment of ESG officers is a particularly important step, as it ensures that sustainability aspects receive adequate attention in corporate decision-making. These professionals are responsible for the development, implementation and monitoring of the sustainability strategy.

Seven critical areas

On average, companies identified seven critical areas for their operations. This indicates that sustainability is a complex, multidimensional issue that affects many aspects of corporate operations. Critical areas can generally be classified into the following categories:

Environmental aspects: energy efficiency, waste management, protection of water and air quality, combating climate change. These areas are directly related to the environmental footprint of companies and the sustainable use of natural resources.

Social aspects: employee well-being, health and safety, community relations, respect for human rights. These areas affect companies’ social responsibility and relationships with stakeholders.

Governance issues: transparent management, ethical business practices, risk management, compliance culture. These areas ensure the quality of corporate governance and adherence to business ethics.

Challenges for the SME sector

Meeting sustainability requirements is particularly challenging for small and medium-sized enterprises. They often do not have the resources or expertise to prepare complex ESG reports. At the same time, research shows that SMEs are increasingly recognizing the importance of sustainability.

A gradual approach is particularly important for SMEs. It is not necessary to be perfect in all areas at once, but it is worth focusing on the most critical areas and gradually expanding sustainability activities.

Supply chain and ESG scoring

Sustainability is also increasingly influencing supply chains. There are companies where ESG scoring is of considerable importance when selecting suppliers and is considered in making a decision in a tender. This means that for SMEs, ESG compliance is not only a regulatory issue, but also a business necessity.

Larger companies are imposing increasingly strict ESG requirements on their suppliers, which also encourages smaller companies to operate sustainably. This can start a positive spiral, where sustainability considerations are increasingly widespread.

Financing benefits

ESG compliance is increasingly influencing financing opportunities. Banks and investors are increasingly placing greater emphasis on sustainability aspects and are offering more favorable terms to companies that meet ESG criteria.

This is particularly important for Hungarian companies, as it can open up new financing opportunities. Green loans, sustainability bonds and other ESG-based financing instruments are becoming increasingly available.

Innovation and competitiveness

Sustainability challenges often create innovation opportunities. Companies are forced to develop new technologies, create more efficient processes and develop innovative business models. This can increase their competitiveness and market position in the long term.

Sustainable innovations are not only environmentally beneficial, but often also result in cost savings. Increasing energy efficiency, reducing waste and optimizing the use of resources can all contribute to improving profitability.

Communication and Transparency

Sustainability reporting is not only a regulatory requirement, but also a communication opportunity. Companies can demonstrate to their stakeholders what steps they are taking towards sustainable operations and how they are contributing to achieving social and environmental goals.

Transparent communication can increase the credibility of companies and improve relationships with stakeholders. This is especially important for consumers, who increasingly prefer sustainable companies.

Future trends

Sustainability requirements are expected to become more stringent in the coming years. The European Union is planning further regulations, and it is important for Hungarian companies to proactively prepare for these changes.

Technological developments create new opportunities to achieve sustainability goals. Digitalization, artificial intelligence and IoT technologies can all contribute to more efficient and sustainable operations.

Summary

The sustainability readiness of Hungarian companies is encouraging. The high level of strategic readiness and the presence of dedicated ESG managers show that the Hungarian corporate sector takes sustainability challenges seriously. The identification of the seven critical areas indicates that companies are taking a comprehensive approach to sustainability.

In the future, it will be important for this positive trend to continue and for more companies to join the sustainable operation trend. The support of the government, professional organizations and consulting firms will be key in this process.

Source: HR Portal, MMOnline, IoT Magazine