Hungary transposed the Corporate Sustainability Reporting Directive (CSRD) (Directive (EU) 2022/2464) into national law through Act CVIII of 2023, commonly referred to as the ESG Act. This legislation amended the Hungarian Accounting Act (Act C of 2000) by introducing a new Chapter III/A, which outlines the sustainability reporting obligations for companies operating in Hungary.
Key Provisions in Act C of 2000
The newly added Chapter III/A of the Accounting Act specifies the requirements for sustainability reporting as part of their annual report in accordance with the European Sustainability Reporting Standards (ESRS)
Scope of Application: Companies that exceed at least two of the following thresholds on the balance sheet date of two consecutive financial years:
Balance sheet total: exceeds HUF 10,000 million
Net turnover: exceeds HUF 20,000 million
Average number of employees: exceeds 250
Under the new Section 95/N of the Accounting Act, the size thresholds must be assessed on a consolidated basis, meaning group-level obligations may arise even if the individual Hungarian company does not exceed the limits.
Importantly, a Hungarian subsidiary may be exempt from standalone reporting if its parent company prepares a CSRD-compliant consolidated report that includes the subsidiary’s data and meets the publication, auditing, and accessibility requirements.
Audit and Publication: The sustainability report must be audited by a certified auditor and published alongside the annual financial statements.
These provisions aim to enhance transparency and accountability regarding environmental, social, and governance (ESG) factors among Hungarian companies, aligning national legislation with EU directives.
The reporting obligation applies to the 2025 financial year, with the first reports to be published in 2026.
Interaction with the EU Taxonomy Regulation
In addition to the CSRD, the EU Taxonomy Regulation (EU 2020/852) applies. It defines which economic activities are environmentally sustainable and requires companies to report the alignment of:
Revenue,
Capital expenditures (CapEx), and
Operating expenditures (OpEx)
with the taxonomy.
Key Actions to Take in 2025
✅ Conduct a CSRD & Taxonomy gap analysis at the group level
✅ Establish a robust ESG data reporting system
✅ Align your sustainability strategy with new legal and investor expectations
—
Transparent ESG reporting is more than a legal obligation – it is a competitive market standard.
Need help navigating the new rules?
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57
Sustainability Reporting Obligations from 2025 – What Should Hungarian Companies Be Aware Of?
Hungary transposed the Corporate Sustainability Reporting Directive (CSRD) (Directive (EU) 2022/2464) into national law through Act CVIII of 2023, commonly referred to as the ESG Act. This legislation amended the Hungarian Accounting Act (Act C of 2000) by introducing a new Chapter III/A, which outlines the sustainability reporting obligations for companies operating in Hungary.
Key Provisions in Act C of 2000
The newly added Chapter III/A of the Accounting Act specifies the requirements for sustainability reporting as part of their annual report in accordance with the European Sustainability Reporting Standards (ESRS)
Scope of Application: Companies that exceed at least two of the following thresholds on the balance sheet date of two consecutive financial years:
Balance sheet total: exceeds HUF 10,000 million
Net turnover: exceeds HUF 20,000 million
Average number of employees: exceeds 250
Under the new Section 95/N of the Accounting Act, the size thresholds must be assessed on a consolidated basis, meaning group-level obligations may arise even if the individual Hungarian company does not exceed the limits.
Importantly, a Hungarian subsidiary may be exempt from standalone reporting if its parent company prepares a CSRD-compliant consolidated report that includes the subsidiary’s data and meets the publication, auditing, and accessibility requirements.
Audit and Publication: The sustainability report must be audited by a certified auditor and published alongside the annual financial statements.
These provisions aim to enhance transparency and accountability regarding environmental, social, and governance (ESG) factors among Hungarian companies, aligning national legislation with EU directives.
The reporting obligation applies to the 2025 financial year, with the first reports to be published in 2026.
Interaction with the EU Taxonomy Regulation
In addition to the CSRD, the EU Taxonomy Regulation (EU 2020/852) applies. It defines which economic activities are environmentally sustainable and requires companies to report the alignment of:
Revenue,
Capital expenditures (CapEx), and
Operating expenditures (OpEx)
with the taxonomy.
Key Actions to Take in 2025
✅ Conduct a CSRD & Taxonomy gap analysis at the group level
✅ Establish a robust ESG data reporting system
✅ Align your sustainability strategy with new legal and investor expectations
—
Transparent ESG reporting is more than a legal obligation – it is a competitive market standard.
Need help navigating the new rules?
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57