ESG obligations: communication can become a major stumbling block

Although the sanctions behind the legislation have been temporarily suspended or softened, the remaining months should be dedicated to preparation. A very tangible system of scrutiny, along with administrative and financial expectations, will arrive in two waves. Large enterprises will have to prepare and already publish their 2026 reports in early January 2027. While in theory they have produced such reports before, this date will mark an important dividing line. In the second phase, from July 2027, every Hungarian SME that is part of a large company’s supply chain will also face reporting obligations, which indirectly affects roughly one in five domestic companies employing staff. This will be compounded by increasingly strict requirements from the banking sector. For companies that do not perform adequately on ESG criteria, credit is likely to become more expensive, and banks may even refuse to lend in order to protect their own ESG indicators.

Any business that fails to prepare properly and does not establish its data collection systems in 2026 will inevitably run into trouble, because ESG data cannot be “manufactured” retroactively. In order to submit a compliant report in 2027, companies must already be measuring their consumption, waste generation and other relevant indicators in 2026. According to PwC’s 2024 global CSRD survey, companies’ number one concern is the availability and quality of ESG data, cited by 59 percent of respondents, and only about one-fifth of companies planning to report for the 2025 financial year have validated in advance that the necessary data is indeed available and complete.

Perhaps SMEs are in the toughest position, because a company with 40–50 employees does not have an ESG department and often lacks even the technical capability for, say, machine-level metering. Large enterprises may be in a more favorable position in this respect, but regardless of company size, it is clear that ESG compliance will require far more than simply dumping extra administrative tasks onto a small group of employees. On the one hand, compliance demands much deeper changes and new processes; on the other, in practice ESG becomes a test of cooperation within the organization. If the employees involved or to be involved do not understand the overall system, if it is not clearly explained to them why these matters and what it will mean for the company if it fails to comply, they will treat it as just another pointless administrative burden, and will assign it a matching level of care and priority. This creates a real risk that missing data will be added later in a rush and in poor quality, warned Erik Czinger, head of Munipolis Hungary, which operates corporate communication networks.

Staff communication therefore needs to be thorough and comprehensive in order to achieve good results, but at the same time the issue does not concern everyone within the company. This kind of selective yet reliably targeted communication is far from self-evident for most businesses. Even with just a few dozen employees, it can be challenging to ensure that everyone affected is regularly and personally informed about ESG-related matters, and this becomes even harder with several hundred employees, especially if those involved need to receive different messages depending on their specific tasks. If a company operates across multiple sites, external locations or several shifts, experience shows that almost nowhere are they able to meet this challenge, the expert pointed out. At this stage, controllable, two-way corporate communication platforms can make a major difference, as they reach the relevant employees in a targeted way and also collect feedback, but efficient, controlled and selective internal communication is needed not only because of ESG requirements.