K&H sustainability index: there are more good intentions, but actions are still to be taken

Positive turn in corporate attitude and strategic thinking

The greatest progress was made in the field of attitude and strategy:

The attitude sub-index rose to 72 points, the highest value in the history of the index. The vast majority of company leaders acknowledge the importance of sustainability aspects, with 97 percent saying that sustainable operations improve financial performance in the long term.
The strategy sub-index also set a record, rising by 6 points to 40 points. Half of the companies are already regularly addressing sustainability at the corporate level, and four-fifths are aware of the EU’s 2050 carbon emission targets.
K&H sustainability index and sub-indexes

The restraint of large companies: a disappearing advantage

Companies with a turnover of more than 4 billion forints – which have always been at the top of the sustainability indicators – have significantly reduced their activity. The main index measured in their area fell by 9 points and currently stands at 50 points. This decrease is visible in all sub-indexes – especially in the areas of strategy, measurement and society.
Meanwhile, the index for smaller companies (with sales between HUF 300 million and HUF 1 billion) is showing a slow but steady increase – thus the gap between large and small seems to be narrowing: the strategy and attitude sub-indexes for smaller companies have jumped. The attitude and strategy sub-indexes for companies with sales below HUF 1 billion have both increased by 7 points, reaching the peak of the sustainability index measurement in both cases.

K&H Sustainability Index sub-indexes – breakdown by revenue

Social responsibility: historic low

In parallel, there was a dramatic decline in social aspects: The social sub-index fell by 16 points to 20 points, the lowest value ever.

Although 70 percent of companies are theoretically involved in some CSR area, the number of topics covered has decreased significantly, from three to two on average.
A particularly large decline can be observed in the areas of ethical business conduct (44% instead of 61%), fair treatment (39% instead of 58%) and work-life balance (27% instead of 51%).

Measurement and auditing: still poor performance

The measurement and auditing subindex remains at 13 points – meaning that the majority of companies still do not measure, audit or plan to measure their carbon emissions:

Only one in twenty actually measures carbon emissions.

The proportion of companies setting a target date for achieving carbon neutrality has fallen from 11% to 4%.
The proportion of companies with sustainable products and certificates is also barely 6%, while 92% do not plan to change this at all
What do these results say?

“The research shows that sustainability is no longer just a trend, but part of the corporate vision. There has been a clear progress in thinking and intentions, especially in terms of strategic embedding and knowledge of EU goals. The significant increase in the attitude and strategy indices compensated for the fall in the society sub-index in the main index, as well as the decrease in the measurement and auditing index – the latter may be related to the relaxation of the so-called omnibus law and the depressive economic climate. Large companies have sustainability aspirations, but with the easing of the legal environment and the impact of economic difficulties, the focus has shifted to maintaining the level and maintaining competitiveness, and less central elements such as social responsibility have been pushed into the background”

– said Levente Suba, K&H’s sustainability manager.