Changes are coming to corporate loans – banks are scrutinizing companies due to sustainability risks

While the sustainability reporting obligation is known to a significant number of large companies, the sustainability screening of their suppliers appears as a new task for many of them, and companies applying for loans will soon be subject to a similar procedure by the banks. In addition, the new legislation aimed at transposing the EU cyber security directives imposes obligations on many domestic companies already this year. Failure to comply with the requirements can have serious consequences, but according to international business and tax consulting firm Grant Thornton, companies should still fulfill their obligations, as this can provide them with a competitive advantage.

In the last days of last year, the Parliament adopted the ESG or sustainability law, a domestic regulation aimed at encouraging sustainable financing and corporate responsibility, and the Magyar Nemzeti Bank started the professional consultation of the minimum sustainability questionnaire with players in the financial sector.

However, while the obligations defined by the ESG Act effective from 2024, especially the requirement to prepare a sustainability report, are known to a significant part of the stakeholders, the supplier due diligence and the MNB’s minimum ESG questionnaire, which currently exists in the form of a draft, have so far received less attention, even though this imposes additional new obligations on a wide range of domestic companies.