The amendment to the ESG Act was published in the Hungarian Official Gazette of 17 April 2024 and entered into force in May 2024.
According to the official reasoning of the amendment, the scope of the Act has been clarified, new definitions have been introduced and previously inserted concepts have been specified. The amendment also serves to strengthen the coherence with the sustainability report implemented in the Hungarian Accounting Act in accordance with the CSRD by amending the provisions on the obligation to submit ESG reports.
An important change is that companies can also comply with their ESG reporting obligations by completing the questionnaire annexed to the ESG report. If companies are requested to provide information on the data contained in the questionnaire annexed to the ESG report, the company is required to complete at most such questionnaire or the part of the questionnaire to which the request relates. However, if a company is required by another entity to provide data covered by the ESG Act that is not included in the questionnaire annexed to the ESG report, the entity requesting the data shall submit a request to the authority (SZTFH) under the ESG Act. Where the authority permits the provision of the data requested by the entity, the company shall provide the data as specified in the authority’s decree.
Another significant change is that, similarly to the sustainability report under the CSRD, a subsidiary may be exempted from the obligation to prepare an ESG report under the ESG Act if the parent company’s consolidated ESG report includes the subsidiary concerned and its subsidiaries. This exemption rule applies to the subsidiary concerned only if it notifies the authority of the exemption and the name and registered office of the parent company whose consolidated ESG report contains the subsidiary.
Decrees containing significant supplementary provisions for the application of the ESG Act have not yet been published. Their first publication is expected in summer 2024, therefore it is of utmost important to pay attention to publications on ESG topics.
By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm
