Nearly Half of Firms Take ESG Considerations into Account

Nearly half of medium-sized companies already take ESG (Environmental; Social; Governance) aspects into account when selecting suppliers, and more than a third of them already require data on this, according to a survey by the Makronóm Institute, MTI reported on Tuesday.

ESG is a set of criteria that aims to ensure that the activities of individual companies, or a certain segment of them, can be assessed from a sustainability perspective. By applying ESG, external actors (customers, investors, financiers) that do business with a given company can get a more complete picture of the organization and its activities.

According to the research, customers mostly ask for data on environmental issues, with information on waste management and energy consumption being the most important; only a small proportion ask for information on social and governance issues.

Almost three quarters of the companies surveyed have heard of ESG and have some knowledge of it. However, only one in three companies have detailed knowledge and only one in four companies incorporate ESG considerations into their business strategy. 

According to the businesses surveyed, the lack of ESG implementation is not yet typically a direct business disadvantage.

The majority of businesses have some form of expertise in this area, the main challenges being regulatory uncertainty, lack of financial resources and limited knowledge.

The Institute believes that the ESG activity of the businesses surveyed would be enhanced if there were a single certification standard and financial support to obtain certification.

The survey was carried out in July and 200-250 companies in Hungary were contacted, with a total of 100 interviews at management level. The majority of the companies surveyed are in the manufacturing sector, with a median turnover of HUF 3.6 billion and an average number of employees of 102, the report said.