ESG Report and Sustainability Reporting – Compliance with Hungarian and EU Regulations

In Hungary, two parallel but distinct compliance frameworks apply.

On the one hand, within the framework of the EU CSRD, the Hungarian Accounting Act requires certain companies to prepare audited sustainability reports in line with the ESRS (European Sustainability Reporting Standards).

On the other hand, the Hungarian ESG Act sets out sustainability focused due diligence and risk management requirements and prescribes the preparation of an ESG report, with a regulatory scope and procedural rules that have been amended several times, creating uncertainty for many companies regarding what applies and when.

What does the Hungarian ESG Act require?

The Hungarian ESG Act (Act CVIII of 2023) introduces a corporate due diligence and risk management framework that supports large companies in identifying, preventing and managing ESG related (environmental, social and governance) risks arising in their operations and in their direct supply chain.

In practice, the regulation focuses on processes and controls, and on how companies manage supply chain compliance expectations.

Typical due diligence obligations under the Hungarian ESG Act

Complying with due diligence obligations typically requires companies to establish a functioning system for managing ESG risks, including:

• defining a risk management framework and responsibilities,
• conducting regular risk assessments of operations and direct suppliers,
• implementing and documenting preventive and corrective measures,
• obtaining declarations from direct suppliers and managing related compliance requirements,
• operating complaint handling and review mechanisms.  

The regulation also indirectly affects the business partners - especially direct suppliers - of obligated companies, who must declare compliance with relevant environmental, ethical and social norms.

Current rules regarding the ESG report

The ESG report presents the company’s due diligence and risk‑management activities related to the previous financial year, following the format and content requirements of the relevant decree.

Importantly, due to recent legislative amendments, ESG reports for the 2024 - 2026 financial years do not need to be submitted to the authority or published.
However, companies must still fully comply with the requirements and have the report reviewed by an independent certifier.

Which companies are subject to the Hungarian ESG Act, and from when?

The scope of obligated companies has significantly narrowed. Currently, an obligated company is typically a Hungary‑registered large enterprise that meets financial and headcount thresholds and operates in one of the designated TEÁOR sectors.

A company is obligated if it:

• has annual revenue of at least HUF 90 billion,
• employs more than 500 people,
• and its core activity falls within the designated TEÁOR (NACE) sectors.

Obligated companies must conduct ESG due diligence on their own operations and on direct suppliers identified as high‑risk.
Until 30 June 2027, micro‑ and small enterprises are prohibited from providing ESG data, while medium‑sized companies may do so only voluntarily.

What sustainability reporting obligations arise under CSRD?

Under the EU CSRD - transposed into Hungarian law - obligated large companies must prepare an ESRS‑compliant sustainability report as part of their annual management report, presenting:

• sustainability strategy,
• business model,
• risks, targets and KPIs,
• and relevant value‑chain data.

The report must be based on the double materiality principle, assessing both:

• the company’s impacts on sustainability factors, and
• the financial risks and opportunities sustainability factors pose to the company.

A key requirement of the CSRD is (limited) assurance, making data quality, reporting processes and internal controls critical from the preparation phase.

Which companies must prepare Sustainability Reports and from when?

Due to the EU’s 2025 Omnibus Directive - which introduced deferrals - the second and third waves of CSRD implementation have been postponed by two years:

• Non‑PIE large companies → first reporting year: financial year starting in 2027
• Listed SMEs and certain financial institutions → first reporting year: financial year starting in 2028
• Non‑obligated SMEs may prepare voluntary reports under the simplified VSME standard.

For PIE (Public Interest Entity. so typically listed) large companies, ESRS‑based sustainability reporting remains mandatory from the 2024 financial year.

How can Forvis Mazars support sustainability reporting and ESG reporting?

We guide clients through the entire preparation and compliance process.
Through tailored consultation, we assess:

• which regulations apply (ESG Act, CSRD/ESRS),
• applicable timelines,
• key risks related to data, processes and internal controls.

Based on this, we develop an implementation roadmap aligned with the company’s operations, supporting strategy, data collection, reporting and readiness for assurance.

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Sustainability services

Sustainability reporting and assurance (CSRD/ESRS)

As demand for sustainability information and mandatory reporting increases, companies need more than data collection: information must be consistent, documented and verifiable.

Forvis Mazars supports companies by:

• compiling sustainability reports,
• establishing reporting logic,
• validating data,
• strengthening internal control environments,
• and preparing thematic attestations (e.g. emissions data).

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Strategy and Sustainability assessments 

A sustainability strategy is effective when it aligns with business goals, includes concrete commitments, measurable KPIs and actionable programmes.

Forvis Mazars supports clients in:

• developing sustainability strategies,
• conducting double materiality assessments,
• identifying risks and opportunities,
• reviewing relevant value‑chain segments,
• assessing supply‑chain risks,
• designing supplier declaration processes,
• and implementing risk‑management frameworks consistent with the Hungarian ESG Act.

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ESG strategy and implementation (Hungarian ESG Act compliance)

Meeting sustainability requirements often calls for operational transformation - integrating new data sources, processes and controls, and defining clear responsibilities.

Forvis Mazars supports companies in integrating sustainability into everyday operations, reducing risks and unlocking new value‑creation opportunities.
This may include:

• stakeholder engagement planning,
• strengthening sustainability communication,
• developing governance and control frameworks,
• and reviewing integrity and anti‑corruption programmes.

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Sustainable Finance – ESG related data requirements

Sustainability expectations increasingly influence financing decisions.
Transparent ESG data, EU Taxonomy alignment and reliable reporting often determine access to funding and partnerships.

Forvis Mazars supports companies in aligning sustainability priorities with financial strategy and helps interpret and apply EU Taxonomy requirements.

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Frequently Asked Questions (FAQ)

What are the two reporting frameworks applicable in Hungary, and what are their purposes?

Hungary applies two parallel systems:

• Sustainability reporting under the CSRD/ESRS, regulated by the Accounting Act
• ESG due diligence and reporting under the Hungarian ESG Act

Both aim to improve corporate transparency and sustainability risk management.
CSRD focuses on standardised, audited sustainability reporting, while the ESG Act focuses on risk management and direct supplier due diligence.

Which companies are subject to the ESG Act, and when must they report?

The amended ESG Act applies only to the largest companies (based on revenue, headcount and TEÁOR/NACE activity).
Between 2024–2026, ESG reports do not need to be submitted or published, offering a transition period while compliance remains compulsory.

Which companies are subject to Sustainability Reporting (CSRD), and what are the key considerations?

CSRD implementation is phased.
Reports must comply with ESRS and form part of the management report.
Key challenges include data collection, value‑chain data management and ensuring readiness for assurance.

What are the consequences of non‑compliance?

Under CSRD/ESRS, the general sanctions of the Accounting Act apply.
For the ESG Act, oversight is linked to supervisory authority processes, though 2024–2026 provides transitional relief from submission and publication requirements.

What should be included in the ESG Report and Sustainability Report?

• ESG Report (Hungarian ESG Act):
  due diligence processes, identified risks, preventive/corrective measures, supplier compliance processes, complaint mechanisms.
• Sustainability Report (CSRD/ESRS):
  strategy, business model, risks, targets, KPIs, value‑chain data, double materiality analysis, and assurance‑ready information.

When and why is publication important?

Publication strengthens transparency and market trust.
CSRD/ESRS reporting is published with the annual management report.
Under the ESG Act, 2024–2026 offers transitional relief, so focus is on preparation.

How can Forvis Mazars help?

We provide end‑to‑end support for both compliance frameworks:

• clarifying obligations and timelines,
• building preparation and implementation plans,
• ESRS/CSRD expertise (gap analysis, double materiality, data model, reporting processes),
• Hungarian ESG Act compliance (due‑diligence framework, supplier management, ESG report support),
• enhancing auditability, documentation and data quality.

Are you ready to comply with CSRD/ESRS and the Hungarian ESG Act?

Our specialists can help assess obligations, build data foundations and prepare for reporting and assurance.

Get in contact with us