On 17 June 2025, the Hungarian Parliament adopted a bill on the establishment of the central budget for 2026, which would amend several laws, including the Hungarian ESG Act.
According to the bill, the scope of large enterprises subject to the ESG Act would be amended. Large enterprises would be subject to the ESG Act if they have a main activity that falls within the economic sectors specified in the new Annex 1 to the ESG Act and have annual net revenues exceeding HUF 90 billion and an average number of employees exceeding 500. According to the new Annex, such economic sectors include, for example, pharmaceutical manufacturing, rubber and plastic product manufacturing, and wholesale and retail trade.
By amending the transitional provisions of the ESG Act, the proposal aims to provide further relief to enterprises in terms of their sustainability due diligence obligations for the 2024-2026 financial years, thereby reducing the burden on enterprises subject to the ESG Act.
Based on the new rules, no audit would be required in 2025 for ESG reports on the fulfilment of sustainability due diligence obligations for the financial year 2024. Furthermore, the ESG report on the fulfilment of sustainability due diligence obligations and the related ESG audit certificate for the 2024, 2025, and 2026 financial years do not need to be submitted to the Authority, nor are they required to be made publicly available on the enterprise’s website. However, the Authority is entitled to examine compliance with the obligation to prepare an ESG report within the framework of its regulatory control.
In order to reduce the administrative burden on micro, small and medium-sized enterprises, the bill also lays down transitional provisions relating to data provision obligations. Until 30 June 2027, micro and small enterprises cannot be requested to provide ESG data, and micro, small and medium-sized enterprises should not undertake any obligation to provide ESG data in a contract or in a written declaration. However, according to the justification to the bill, medium-sized enterprises will have the option to voluntarily answer the questions in the supplier questionnaire attached to the ESG report.
Based on the proposal, most of the amendments enters into force on the day after publication of the final act.
By Tamas Zsiros, Associate, KCG Partners Law Firm
