FMnewsroom – ESG, Hungary. ESG is becoming more and more prominent in business processes: almost half of customers already take Environmental, Social and Governance aspects into account when selecting suppliers, and more than a third of them require the provision of relevant data. The ESG-related activity of the interviewed medium-sized Hungarian companies would be significantly increased if there were a uniform rating standard and financial support for obtaining the rating.
Almost three-quarters of the companies participating in the Makronóm Institute’s research have already heard of ESG and have some knowledge of the concept. Data collection for the research involved 200-250 Hungarian businesses and a total of 100 executive-level interviews were conducted. (Most of the companies participating in the survey operate in the manufacturing industry, the median sales revenue is HUF 3.6 billion, and the average number of employees is 102.) At the same time, only every third company has detailed knowledge, and only every fourth company incorporates the ESG system into its business strategy – FM Business reports.
ESG in a nutshell
ESG is a system of criteria, the purpose of which is that the activities of individual enterprises, or a certain segment of them, can also be examined based on sustainability aspects. By applying ESG, external actors (customers, investors, financiers) who enter into a business relationship with the given company get a more complete picture of the organization and its activities.
Waste management and energy optimisation are top
According to the research, customers most often request information on environmental topics. Waste management and energy consumption are on top of the list; only a small proportion request information on the social and management area.
ESG: limited knowledge, regulatory uncertainty
According to the interviewed companies, the lack of implementation of ESG aspects does not typically cause a direct business disadvantage.
The majority of businesses have some kind of expert help in the field, the challenge is primarily regulatory uncertainty, lack of financial resources, and limited knowledge. The institute believes that the ESG activity of the surveyed companies would increase if there were a uniform rating standard and financial support for obtaining the rating.
Source: MTI, Makronóm intézet, FM Business.hu