BDO: The EU’s “green” obligations are a serious burden for companies

By: Trademagazin Date: 2022. 10. 10. 10:23

The EU’s green transition strategy imposes significant tasks not only on large companies, but also on companies in the SME sector and their managers, which essentially has not eased despite the existing energy and geopolitical situation. Pursuant to this, starting from 2024, in several steps, companies of all member states must take significant steps in the field of sustainability (ESG).

The union also strives for legal harmonization between member states

In addition, it is not enough to make the company’s activities transparent, a report must also be compiled on this every year. All of this can be done next year as well, but the task is not only administrative in nature; the expectations can only be met with truly sustainable operations, for which many companies will have to fundamentally transform their processes. The situation was summarized by three employees of BDO in Hungary, Karolina Czakó, Zsófia Reizinger and Dávid Matos.

Managers of large companies and SMEs operating in EU countries should constantly follow the EU’s sustainability regulations, as we are now living in exciting and busy times in the development of the ESG (environmental, social, governance) legislative framework. This also means that companies have to place more and more emphasis on the ESG compliances that apply to them, which are becoming mandatory – the experts of BDO’s ESG business pointed out.

The European Union not only continuously expands the number of companies affected by ESG regulations, but also strives for legal harmonization between member states. The next two regulations, which are in the proposal phase, will affect a wider range of Hungarian companies. In these two proposal phases, the adoption and entry into force of the Corporate Sustainability Due Diligence (CSDD) and the Corporate Sustainability Reporting Directive (CSRD) are expected.

The CSRD is expected to apply as early as January 1, 2025 for the fiscal year 2024 and aims to extend the NFRD (Non-Financial Information Disclosure Directive) and the Taxonomy and define a mandatory reporting standard for non-financial information.

In the report, companies must disclose the impact of sustainability-related developments on their operations, and on the other hand, the impact of the company’s activities on the environment and people.

BDO