The EU would put an end to the unsustainable operation of companies – more than a thousand companies may be affected here

By: Trademagazin Date: 2023. 10. 17. 11:06

Hungarian companies listed on the stock exchange are seriously lagging behind in the area of sustainability, according to EY’s study examining a total of 320 companies in 17 EU member states. The goal of the European Union is to become carbon neutral by 2050, so in the coming years it would regulate the economic activities of more and more companies, including SMEs. The change may affect more than a thousand organizations based in Hungary, so businesses should assess as soon as possible whether the so-called Taxonomy Regulation applies to them.

The European Union expects companies to take decisive steps in order to meet the specified climate and energy goals. With the Taxonomy Regulation introduced in 2021, a common language was therefore created, which unifies in all member states what constitutes a sustainable economic activity and what does not. The task of the system is to objectively determine whether a company has a positive impact on the environment by examining sales revenue, operating costs (OPEX) and capital expenditures (CAPEX).

According to the analysis, only 55 percent of the Hungarian companies listed on the stock exchange and subject to the NFRD (non-financial reporting directive) published a report in accordance with the Taxonomy. Despite the fact that on average up to a quarter (25%) of the sales revenue of domestic companies could come from sustainable activities, in practice this amounts to only 1 percent. For this reason, Hungary has the largest gap between potential and actual sustainable sales revenue among EU countries.