Hungary implements stricter sustainability and ESG regulations

New regulations regarding sustainability claims and ESG (Environmental, Social, and Governance) reporting are coming into effect for businesses in Hungary. Starting September 27, companies must adhere to stricter rules to prevent misleading green communications. The Hungarian Competition Authority (GVH) noted that these changes follow the adoption of the Empowering Consumers for the Green Transition (EmpCo) directive by the European Parliament and Council.

The updated legal framework includes a list of 12 specific practices that are automatically classified as unfair commercial practices. Examples of prohibited actions include using sustainability labels not based on official certification systems or making general environmental claims without proof of recognized excellent performance. Other prohibited practices include falsely labeling software updates as necessary for functionality or claiming products are repairable when they are not.

In addition to consumer protection, companies face evolving ESG disclosure requirements. Under Hungarian law, large enterprises—typically those with at least 500 employees and 90 billion HUF in revenue—must implement risk management systems covering their own operations and supply chains. While mandatory reporting for certain business years is transitioning, companies must comply with standards and undergo independent audits. Furthermore, under the EU's Corporate Sustainability Reporting Directive (CSRD), non-listed large companies will begin mandatory audited sustainability reporting for the business year starting in 2027.