November 2023

An overwhelming majority of companies say ESG reporting is a business advantage – BCSDH’s second ESG survey

Budapest, 13 November 2023 – Nine out of ten companies expect to see business benefits from ESG reporting within five years, and more than half of the BCSDH member companies surveyed report regularly. The social and governance leg of ESG is at the forefront of importance, with companies preferring to systematically collect and process this type of data. Biodiversity, on the other hand, is barely represented within the environmental dimensions, and strengthening this could be a priority for companies. There are several factors slowing down the integration of ESG aspects in companies, the main barriers being too many standards and the difficulty of producing data/KPIs of sufficient quality.

In 2023, the Business Council for Sustainable Development in Hungary (BCSDH) conducted its second ESG survey among its member companies, with KPMG as its professional partner. In the survey, 70 companies from 14 industries shared their experiences along 22 questions, in which the respondents covered, among other things, their ESG reporting and data collection habits, the main motivating and limiting factors related to ESG, and the role of ESG in the life of their organisations.

90 percent of survey respondents believe that ESG-based reporting could benefit their business in the next 5 years, and six out of ten companies (61 percent) already regularly produce ESG reports, most often at the international or parent company level and based on the GRI standard. Many have also come across the upcoming legislative requirement for ESRS standards under the CSRD, but their uptake is still low. A similar proportion of companies that already prepare ESG reports and those that are planning to do so prefer a standalone (34 percent) or integrated (33 percent) reporting format for the disclosure of their ESG data. The main drivers for ESG reporting include enhancing reputation, meeting shareholder expectations, and meeting regulatory requirements.

61 percent of companies believe they are prepared for reporting under the CSRD, and have a practice of reporting, while 84 percent publicly disclose information about their company’s performance.

In contrast to the 2021 survey, when companies rated the environmental dimension of ESG as the most important for their operations, this year there is a greater emphasis on social and governance issues, and this is reflected in their data collection and management practices. 85% of the companies surveyed collect some form of ESG data, most commonly in the areas of health and safety, employee information such as education, and carbon emissions. For at least one ESG topic, 78 percent of responding companies set targets, but this proportion will certainly become more robust in the future along the lines of CSRD expectations. These targets are discussed occasionally in management meetings by less than half of the member companies.

However, the picture is different when looking at the dimensions included in ESG reports. In this respect, environmental areas (such as carbon emissions, and energy consumption) continue to stand out. Biodiversity is the area where the least data is collected: six out of ten companies surveyed (62%) do not collect any data at all, although biodiversity has become a key sustainability issue this year and in the coming period, and is an area where progress is needed.

37 percent of responding member companies have already requested data from their stakeholders on carbon emissions, ethical operations, circular economy, and alternative energy and efficiency, while half of their customers (54 percent) are requesting data along environmental and governance dimensions. From the financing side, one in four companies is still asked to show progress on carbon emissions, alternative energy and efficiency, waste management, and health and safety.

In terms of organizational functioning, 72% of the companies surveyed have a dedicated ESG manager at the decision-making level. Half of companies have a dedicated ESG specialist in their sustainability department, a significant shift from two years ago.

Lack of sufficient detail in the legal requirements, too many standards, and insufficient quality of data/KPIs were the main constraints to incorporating ESG considerations in companies, as highlighted by respondents.

A summary of the Survey results can be downloaded here.

Thank you to our sponsors!

30.11.2023

Is the circular economy the Swiss army knife of ESG reporting? – Report about the sixth Circular Economy Summit

News

As a complex system, the circular economy is associated with efficient tools for addressing climate change, biodiversity, and ESG issues. This key message was at the forefront of the sixth Circular Economy Summit, which took place on November 23, 2023, attracting close to 180 participants and significant interest. During the event, the ‘The Tulip Award for Sustainability’ was presented.

‘Each year, we use 1.75 times as many resources as Earth can replace to sustain our lifestyles, and the supply of ecosystem goods and services cannot keep up with our needs. Damaged ecosystems exacerbate climate change, undermine food security, and put people and communities at risk. While real social needs could be met with 30% less material consumption, our economy is still continuously using more material. In this situation, accelerating the transition to a circular economy is in our common interest, as the associated reduction in consumption alone would represent a solution to numerous climate and ecological crises. Immediate action is also needed in this area.’ – said Attila Chikán Jr., President of BCSDH, in his speech.

The index of global material use is deteriorating. While in 2018, 9.1% of all raw materials used in the world economy came from recycled materials, this number had dropped to 7.2% by 2023. And as business as usual continues, the amount of material used globally may increase by up to 84% by 2050, while global social needs could be met with 70% of the material that is currently used. Reducing consumption to this extent would significantly positively impact several ecological tipping points

Today, the Circular Economy Platform, established at the initiative of the Hungarian Business Council for Sustainable Development (BCSDH), the Dutch Embassy, and the Hungarian Ministry of Innovation and Technology, consists of 99 members. These institutions have highlighted knowledge-sharing, collaboration, and immediate action as the platform’s most important tasks.

According to the BCSDH’s second survey on the state of the circular economy in Hungary, 73% of domestic companies see the transformation of production processes as crucial, while 66% focus on extracting resources from waste, and 62% are prioritizing waste management for the future. Consumer behaviour change will not be the primary driver of these changes, but a significant proportion of current initiatives target consumers and could play a crucial role in fostering awareness. However, systemic changes are still lacking.

Dr. Anikó Raisz, State Secretary for Environment and Circular Economy at the Ministry of Energy, spoke about the current regulatory environment for the circular economy in Hungary.

In Hungary, phasing out single-use plastics, implementing an extended producer responsibility system, introducing a new mandatory deposit system, and the newly operational concession-based waste collection system are seen as the sole opportunities to meet EU and Hungarian climate goals. These initiatives could also mark significant progress toward adopting a circular economy. Our goals are ambitious, and the OECD study released this spring, in which BCSDH played a significant role, provides guidance for achieving them.

According to the BCSDH survey, 69% of companies expect assistance transitioning to a circular economy involving government incentives, while 59% look to regulatory measures for support. There is great anticipation regarding these ongoing changes.

Among our internationally recognized speakers was Vincent GRUIS, Prof. Dr.ir., Professor of Housing Management at Delft University of Technology, who discussed the transition path towards more circular and sustainable construction—an essential area. Joost van Dun, the Circular Economy Lead at ING Bank, showcased through examples how circular economy criteria can be applied in sustainable finance during his presentation.

Camilla Visconti, Consultant at Circle Economy Consulting, highlighted during her presentation on the CSRD toolkit that it is the first reporting system in which reporting on progress in the circular economy is mandatory.

The role of SMEs (Small and Medium-sized Enterprises) in the transition to a circular economy is crucial, and they may be supported on their path towards sustainability by the OPTEN ESG Index. Dr. Hajnalka Csorbai, Strategic Director of OPTEN Informatikai Kft., introduced this index during the event.

A panel discussion focused on the relationship between the circular economy and ESG. Participants, including Tibor Bodor, CEO of ING Bank; Kam Jandu, CEO of Budapest Airport; Károly Gábor Nyári, Vice President and Head of FP&A at Grundfos; and Richárd Végh, CEO of the Budapest Stock Exchange, explored the significance of ESG compliance across various sectors and how fulfilling ESG criteria can be supported by the principles of the circular economy. The roundtable was moderated by Irén Márta, Managing Director of BCSDH.

Transitioning towards a circular economy and sustainable operations involves the crucial integration of ESG (Environmental, Social, and Governance) factors into the investment process. This framework ensures transparent, sustainable business practices that are measurable and reportable. Both the circular economy and ESG are pivotal for mitigating investment risks, meeting commitments to climate protection and biodiversity, and leveraging new forms of sustainable growth.

Az event’s second panel discussion focused on reforming Hungary’s waste management system, moderated by Bálint Bartha-Horváth PHD, Senior Sustainability Consultant at CBRE. Participants included Martin Basila, Founder and CEO of Sensoneo; Dr. Viktória Bodnár PHD, Managing Director of IFUA-Horváth & Partners Ltd.; and Tivadar Runtág, Material Flow Director at MOHU MOL Waste Management Ltd.

The new comprehensive waste management system has launched with the aim of achieving 90% functionality within three years. There are many unforeseen challenges ahead. Several smaller, older players did not register in the system, and the extent of illegal waste imports exceeds initial estimates. The stakes are high as significant volumes of valuable materials are ending up in the trash. The mandatory deposit return system starts with the installation of approximately 2000 return machines nationwide, which could increase to 4000-6000. Educating stakeholders is crucial, thus a significant and multi-layered campaign is launching to ensure that consumers across various age groups and market players understand every detail of the new system.

The Hungarian Green Building Council (HuGBC) has made an unprecedented and meaningful zero-carbon recommendation specifically for buildings in our country. This recommendation urges action from stakeholders within the construction industry to achieve the crucial 2050 climate goal. Gábor Szarvas, President of the HuGBC, presented this recommendation.

‘The Tulip Award for Sustainability’

For the first time, the Circular Economy Summit hosted the presentation of the “Tulip Award for Sustainability,” established by the Embassy of the Kingdom of the Netherlands in Hungary.

The aim of the award is to annually recognize SMEs, startups, companies, or nonprofit organizations that demonstrate outstanding performance in sustainability within a particular industry. This year’s award theme was the ‘Sustainable and Circular Construction Industry.’

“The circular economy remains an important priority for the Netherlands as the country wants to be fully circular by 2050. To achieve this ambitious goal, we should also build more sustainably as the construction sector accounts for half of the raw material consumption in the Netherlands,” – emphasized Désirée Bonis, Dutch ambassador to Hungary, in her speech.

This year, the prize was won by a young architectural company, Equinox International, for its holistic approach to the sustainability of its residential buildings. A special prize was given to Café Plusz Kft. for promoting hempcrete as a sustainable construction material.

A six-member professional jury evaluated the applications that were submitted, comprising:

Dr. Barbara Botos, Travelling Ambassador for Climate Affairs and Climate Diplomacy, Ministry of Energy

Zsombor Barta, Ambassador of the Hungarian Green Building Council (HuGBC)

Andrea Istenesné Solti, President of the Hungarian Business Leaders Forum (HBLF), Shell Hungary Zrt. Chair

Zoltán Krázli, Program Director of GS1 Hungary Nonprofit Ltd., Coordinator of the Lean & Green Platform

Irén Márta, Managing Director of the Business Council for Sustainable Development Hungary (BCSDH)

Katinka Zinnemers, President of the Dutch-Hungarian Chamber of Commerce (Dutcham), Managing Director of Abacus Medicine A/S

BCSDH – one of the founders of the Circular Economy Platform – strives to be a community of highly committed companies and business leaders and is encouraging and supporting its more than 140 member companies – and, following them, the business sector as a whole – to go ‘beyond emissions’ and focus on biodiversity conservation and restoration and reverse growing social inequality.

This is what our Time to Transform 2030 (a decade-defining program built on the achievements of Action 2020) is all about, to which our Circular Economy Platform is also connected.

Thanks to the main sponsor of the Summit:

Thanks to our sponsors of the Circular Economy Platform 2023:

****

What is a circular economy?

In the current linear economic model, technical and biological components are extracted from nature, transformed, and, after use, treated as waste, much of which is not recycled.

In the circular economy model, on the other hand, metabolic processes occur in a closed loop, waste is almost 100% recycled, and biological and technological components are returned to circular processes without any loss of quality.

Therefore, the shift to a circular economy involves rethinking the relationship between markets, consumers, and natural resources through the responsible management of natural resources.

23.11.2023

Can bee pastures be part of business strategy?

News

On 16 November, at our last Race to Zero Working Group this year, we got a better insight into the operations and long-term commitment of two of our member companies, and a definitive “yes” to the question in the title.

With the help of our host, János Kocsány, CEO of Graphisoft Park, we were able to learn about the history of the brownfield project, which is unprecedented in Europe. We chose this as one of the topics of the meeting because this year Graphisoft Park won the Sustainable Future Award in ‘Business Solution – Biodiversity‘ category for its forward-thinking solutions. Moreover, the park, with 60% green space, has an outstanding tenant loyalty index (15 years) and is not just building offices, but a cohesive community, with a special focus on nature conservation and restoration.

Graphisoft Park’s case study with results and inspiring thoughts so far is also available in the Business Solutions sub-page under Resources on BCSDH’s website, along with several other examples of companies promoting biodiversity and climate adaptation.

The presentation by András Zakar, Director General of FŐKERT Division for Urban Park Management of Budapest Public Utilities Nonprofit Plc. showed that the Főkert is responsible for the maintenance and protection of 6 million m2 of green space in 479 locations. In addition to the more familiar bee pastures, he talked about the Stockholm tree planting method, low-impact plant protection and the Miyawaki mini-forests, of which there are already six in Budapest. They have their own plant nursery and a strong focus on monitoring and testing, and then applying best practices based on the results. Sustainable operations are supported by a fleet of electric vehicles, and waste management is also a priority. The main tasks of Főkert are public, but they are also keen to help companies to protect natural diversity, either by working with them to develop or rehabilitate a new area, or by involving employees in voluntary activities. Education and awareness-raising are a priority in all activities, as they know that the only way to protect nature is to involve people.

Andrea Nagy, BCSDH’s project manager, briefly presented this year’s Race to Zero programme and the professional materials, films and presentations related to the 2023 biodiversity flagship theme, which can provide a good summary and inspiration for further strategic thinking. This was followed by the 2024 targets, where there will be a continued focus on showcasing good business practices and collecting business solutions. In addition to the traditional workshops, we will also visit external sites.

Finally, Dorka Veress, HR and PR Manager of Graphisoft Park, gave an unusual behind-the-scenes tour of the site, where we could see how an old forge is transformed into a high-tech office space, what an unused area looks like, and we also had the chance to see the Generator House. In the close-to-nature office park you can find a bee pasture, a wetland with lots of fish and plants, lots of trees and of course the Danube bank, in addition to 22 species of birds.

Many thanks to the hosts and speakers for their inspiring presentations and ideas, and to the sponsors of the Race to Zero programme for their support:

17.11.2023

“We heat the locomotive, but the steam is used for hooting not for starting.”

News

November 13-án és 16-án tartotta a Nemzeti Fenntartható Fejlődési Tanács (NFFT) a BCSDH-val együttműködve a Nemzeti Fenntartható Fejlődési Keretstratégia megújításához kapcsolódó egyeztetéseket építőipar, élelmezés és mezőgazdaság, logisztika és szállítmányozás, valamint pénzügy témákban. A közel 50 résztvevővel zajló egyeztetéseken a vállalatvezetők kiemelték a rendszerszintű változások és a valódi tettek szükségességét, valamint a holisztikus szemlélet és az edukáció fontosságát. A javaslatok aggregált módon beépülnek a következő 12 éves stratégiába.

On 13 and 16 November, the National Council for Sustainable Development, in cooperation with the BCSDH, held consultations on the renewal of the National Framework Strategy on Sustainable Development on the topics of construction, food and agriculture, logistics and transport, and finance. In discussions with nearly 50 participants, business leaders highlighted the need for systemic change and real action, as well as the importance of a holistic approach and education. The recommendations will be integrated in an aggregated way into the next 12-year strategy.

We thank the participants for the honest and constructive discussion and the professional organisations for their cooperation:

Federation of Hungarian Food Industries (FÉSZ)
Hungary Green Building Council (HuGBC),
National Association of Facility Management, Building Operation and Maintenance Service Providers (LEO)
Hungarian Lean & Green Program
Hungarian Banking Association
Hungarian Logistics, Supply and Stockholding Company (MLBKT)

16.11.2023

Presenting the results of our latest ESG Survey – ESG Working Group meeting at 4iG

News

10.11.2023

Our new member company: Mazars Ltd.

Member News

Mazars is an international, integrated and independent organisation providing audit, accounting, tax, financial, legal and business advisory services to its clients. Mazars is present in more than 95 countries worldwide. Mazars has been present in Hungary since 1991 and is one of the leading Hungarian audit and consulting firms. With 190 highly skilled and dedicated professionals, Mazars provides a full range of services to clients in all sectors. Mazars is globally committed to sustainability, and naturally takes sustainability to heart in its domestic office, with goals of commitment and continuous improvement in all three areas of ESG.

To this end, it has taken several steps in recent years. As a service provider, one of their key assets and resources is their employee community, and the S and G areas are also a priority for them. They place great emphasis on regular communication with employees and listening to their views. They have a number of programs on diversity and human values, such as the Work-Private-Life-Mazars program, talent management, comprehensive professional and soft skills training program, reintegration of new mothers, health care programs, etc. Each member company reports annually to the parent company about the implemented programs, as well as the composition of employees, diversity, the position of women, and the average earnings of men and women. The Code of Conduct, which all Mazars employees are obliged to know and comply with, sets out their beliefs on human rights and fundamental human values and diversity.

To achieve net-zero operations as an environmentally responsible company, the Group will introduce carbon footprint and GHG emissions measurement (under the GHG Protocol): this is already in place in more than 80 countries, which together represent 95% of Mazars’ total headcount and emissions.

Mazars has joined the SBTi (Science Based Targets Initiated) initiative and is developing a country-level decarbonisation program. They are consciously reducing business travel, opening up to sustainable and environmentally neutral solutions in procurement, and have established a supplier code of ethics, which will be followed by a sustainability rating of their suppliers. To increase biodiversity and restore the natural environment, they run subsidiary-level programmes involving their employees.

A sustainability report has been prepared at Mazars Group since 2019. In 2024, Mazars Ltd. has committed to produce and publish a sustainability report locally for the financial year 2022/23. The Hungarian office was awarded EcoVadis Silver certification in September 2023. For a green future, they will continue to make the necessary efforts to operate in a sustainable way.

Mazars has joined BCSDH because it believe it is important to have the sustainability competencies to help its clients achieve conscious and sustainable operations, reporting and future development, and to apply them in their own operations. Mazars’s employees consider it is important to train themselves continuously, learn from others and share the knowledge they have acquired. They aim to be active, valued and useful members of this community.

10.11.2023

‘Our job isn’t to predict the future, but to shape it.’– Rodney Irwin’s address at the BCSDH Future Leaders Talent Program 10th Anniversary Celebration

News

Budapest, November 8, 2023 – ‘Educating the heart is as much as important as educating the mind’ – said Rodney Irwin, the COO of the World Business Council for Sustainable Development (WBCSD) and leads the WBCSD Education program at the Jubilee Event where approximately 100 alumni members, mentors, and experts celebrated the 10th anniversary of the BCSDH Future Leaders Talent Program. He spoke about the importance of closing the sustainability skills gap.

“In a unique way within the Global Network, we adapted the WBCSD Future Leaders program with the participation of recognized domestic experts and have been continuously developing it since. Today, the Alumni community, comprised of graduate students, has grown to over 300 members, who have become a vital driving force for sustainability transformation,” – said Irén Márta, the Executive Director of the Business Council for Sustainable Development in Hungary (BCSDH), in her welcome speech.

At the anniversary event, Rodney Irwin emphasized, “There is a need to transform our systems and ourselves. To achieve this transformation, we need an understanding of sustainable development, the ability to make decisions in a complex and integrated world, innovation, collaboration, resilience, and a learning mindset. The purpose of business is no longer just profit generation but to produce profitable solutions to the problems of people and planet.”

The Future Leaders Talent Program plays a significant role in this transformation. We cannot solve problems using the same kind of thinking we used when we created them. It is essential to take the time to reflect on who we are, learn from one another, and pursue education and lifelong learning. Systems thinking is critical to ensure we avoid unintended consequences.

“The Talent Program, launched ten years ago, is one of the greatest sources of pride for our organization, the Business Council for Sustainable Development Hungary (BCSDH), as it offers a unique opportunity for participants to become committed leaders in sustainability, capable of addressing the ever-changing challenges of the future,” added Attila Chikán Jr., the President of BCSDH, in his speech.

Rózsai, CEO of KPMG, provided participants with insights into the results of the KPMG CEO Outlook 2023 survey conducted among over 1,300 CEOs of the world’s largest companies. Currently, geopolitics and broader political uncertainty represent the most significant risks to a company’s business success. While dealing with this increasingly uncertain situation, the strategic priorities for business leaders remain the following: technology-digitalization-AI, the ESG framework, and the workforce-talent trio.