Budapest Business Journal 3203

VOL. 32. NUMBER 3 | FEBRUARY 9 – FEBRUARY 22, 2024

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SPECIAL REPORT INSIDE THIS ISSUE

ESG

More Firms Must Prepare EU Sustainability Reports European initiatives regarding sustainability reporting are being introduced across the continent, with many Hungarian companies having to adhere to new regulations and a more comprehensive range of requirements for reporting.  10

ESG: Changes, Requirements and Deadlines

With implementation of the ESG Act by Hungary's Parliament, alongside additional requirements set by the Council of Europe, the landscape of sustainability reporting in Hungary has begun its transformation towards a more transparent future.  14

Powering Ahead

SOCIALITE

GZÏ Art Gallery Bringing Splash of Color to Budapest Benjamin Dréan-Guénaïzia’s GZÏ Art Gallery in District VI is livening up the Budapest art scene with its French connections, a love of bright colors, and a desire to build cultural bridges.  21

NEWS

2023 1 of Industry’s Worst Years Since ’91 The performance of Hungary’s industry is still lagging behind the pre-COVID trend and in 2023 produced one of its worst years since the early 1990s. Significant capacity expansions might help in the longer term, but the short-term outlook remains somewhat hazy.  3

BUSINESS

Andrea Laky, managing director of Ford for Hungary and the Czech Republic, discusses how the U.S. automaker is embracing electrification and diversity to fuel the growth of its businesses in the region. 9 BUSINESS

Consumption, Labor, FDI: 3 Pillars to Support Growth Minister of National Economy Márton Nagy was the keynote speaker at a business forum organized by the American Chamber of Commerce in Hungary at the InterContinental Budapest hotel on Feb. 1.  7

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News

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Budapest Business Journal | February 9 – February 22, 2024

IMPRESSUM EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Luca Albert,

Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Gary J. Morrell, Nicholas Pongratz, Gergő Rácz.

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The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

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THE EDITOR SAYS

FINDING HARMONY IN SUSTAINABILITY There is no getting away from sustainability in today’s business world. Wherever you turn, you will see those three initials, ESG, looming ever larger, sometimes in the most surprising places. At the “out there” end of the spectrum, we have the use of space imagery to map heat islands in our cities (see “Hungarian Architects Using Space Tech to Reduce Carbon Emissions”). More likely to be filed under “mundane,” but no less important for all that, parliament passed the imaginatively named ESG Act at the tail end of last year (see “Change Ahead on Corporate Loans: Banks to Screen for Sustainability Risks”). Between those two points, you’ll find that most bases are covered.

Even the National Bank of Hungary has got in on the act. In truth, that is not so surprising, for the MNB has been carving out quite a niche for itself as a pioneer of green financing among European central banks.

It has won a lot of praise in the course of that, something it seems it can no longer expect from the government.

When Prime Minister Viktor Orbán returned to power in 2010, he appointed György Matolcsy as his Minister of National Economy, and at one point even called him his “right hand.” There was little surprise when Orbán named Matolcsy as the next governor of the MNB in March 2013. According to international news wire Reuters, Orbán told Hungarian public radio at the time: “Some of the tools needed for economic growth are government tools that the Economy Minister uses, while other tools are at the central bank, its governor and the Monetary Council. These must be in some form of harmony for a country to perform well.”

For the vast majority of the time since 2013, that harmony was apparent. Matolcsy talked positively

about the “fairytale” that was Hungarian economic growth and delighted in snatching “unorthodox” policy instruments from the MNB’s toolbox; bank and cabinet marched in seeming lockstep. But since last year, the tension in the relationship has been palpable. Matolcsy has, at times, appeared to criticize government policy.

In response, cabinet figures have complained the central bank is not doing enough to support economic growth and has kept its base rate too high for too long, none more so than the current national economy minister, Márton Nagy. These two have history: Nagy was a deputy governor under Matolcsy for five years until the former unexpectedly resigned to become Orbán’s chief economic advisor in May 2020.

Nagy delivered the latest broadside against Matolcsy at an AmCham Business Forum on Feb. 1 (see “Domestic Consumption, Labor, and FDI: 3 Pillars to Support Growth”). The minister said monetary policy could offer support but complained that “[monetary] easing is behind other central banks.” Nagy argued that holding the central bank rate at 10% “does not support economic recovery,” adding that he did not know what lay behind that decision.

“You would have to ask the MNB, which is independent.”

Matolcsy is into his second six-year term as governor, and if all else is equal, will remain in post until March 2025 (there is a two-term limit for the governor). “Be in harmony, yet be different,” the Chinese philosopher Confucius is supposed to have once said. It’s easier to imagine the second part of that sentence right now than the first.

Robin Marshall Editor-in-chief

Why Support the BBJ? • Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be.

• Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together.

• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities.

Now, more than ever, factual business reporting is vital to good decision-making.

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• Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value.

Photo by Katalin Erdei / Fortepan

THEN & NOW In the color picture from state news agency MTI, mask-carving craftsman Zoltán Gagyi works on a traditional busó mask in his workshop in Mohács on Feb. 5, 2024. More than 2,500 masqueraders and 71 groups of busós are expected to take part in the annual busó celebrations (in which “monsters” chase away evil spirts) that will take place from Feb. 8-13 this year. In the black-and-white picture from the Fortepan public archive, dating from 1979, the busó celebrations are already underway at Széchenyi tér in Mohács.

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Budapest Business Journal | February 9 – February 22, 2024

News

• macroscope

2023 one of Industry’s Worst Years Since Change of Regime

The performance of Hungary’s industry is lagging behind the preCOVID trend and has produced one of its worst years since the early 1990s.

Significant capacity expansions might help in the longer term, but the short-term outlook is somewhat hazy.

Although domestic consumption finally picked up at the end of last year, it wasn’t enough to rescue the poor annual figure.

ZSÓFIA CZIFRA

The volume of industrial production dropped in December 2023 by 13.7% year-on-year; based on working-day adjusted data, it declined by 8.7%. The significant difference compared to the raw data is that there were two fewer working days in December 2023 than in December 2022. According to seasonally and working-day adjusted data, industrial output was 0.3% lower than in November 2023, the latest report released by the Central Statistical Office (KSH) shows.

Production volume fell in December 2023 in the great majority of the subsections; it was at its highest rate in the manufacture of coke

Industrial Production in Hungary, 2001-2023 Production volume index, compared with the same period of the previous year

rebound after the fall in November is still to come, the analyst says.

According to Nagy, the generally still weak European economy also has an adverse effect on domestic output.

Vehicle and battery production, which performed well for most of last year, was well below its capacity, he pointed out.

Hazy Outlook

The Erste Bank analyst says the shortterm outlook for industry remains rather hazy: economic indicators show only minimal signs of life across the continent for the time being. Just as in Hungary, positive real wage growth across Europe will be the driving force for growth this year. However, no other driving force has yet been outlined, which, he assumes, will also limit the perspectives for the manufacturing industry.

The statistics were worse on just three other occasions: in 1991-92, when the country’s entire economic structure was altered after the end of communist rule, and many state-owned companies were closed; in 2009, the year of the global credit market crisis; and 2020 at the outset of the coronavirus epidemic.

Source:

and refined petroleum products. In 2023, overall, the volume of industrial production was

5.5% lower

than in 2022.

The results mean industrial production fell for the third consecutive month since October, with the November contraction put at 2.3%. The decline trend shows that monthly production figures fell in four of the six months of the second half of last year.

Indeed, industrial production has been on the decline since mid-2022, and the sector now lags well behind the trend from before the coronavirus crisis and could not reach the pre-COVID peak of four years ago.

Exports Drag

The central role in the poor performance can be attributed to the weakness of the export markets, which is indicated by the fact that we have been seeing sluggish export figures in the foreign trade balance for some time.

A more comprehensive picture will be available when the detailed data is published next week. Based on the current KSH announcement, all that can be said for sure is that December 2023 saw growth

in just three of the 14 manufacturing industries on an annual basis. The decline in vehicle production, which was still performing well at the beginning of 2023, may have contributed to the weakness.

Putting the figures into context, the business news website Portfolio notes that the statistics were worse on just three other occasions: in 1991-92, when the country’s entire economic structure was altered after the end of communist rule, and many state-owned companies were closed; in 2009, the year of the global credit market crisis; and 2020 at the outset of the coronavirus epidemic. The yearly average decline of 5.5% in 2023 was one of the weakest years since the regime change.

Regarding the industrial production data, the volume of output decreased

by

8.7%

on an annual basis in December, according to data adjusted for the working day effect. This value is even worse than the analyst consensus of -7.8%, said János Nagy, Erste Bank’s macroeconomic analyst. In line with European trends, industrial output decreased by 0.3% on a monthly basis.

The end of the year is typically not a time of record production, so the

In the medium term, significant capacity expansions will enter production, primarily in the automaker industry, as well as in the field of battery production, which may result in a notable boost. However, Nagy believes that any ability to exploit the favorable effects will still depend mostly on the recovery of the global economy.

Better news came from retail sales, where turnover in domestic stores increased by

1.4%

in December

compared to the previous month. Such a significant increase hadn’t been seen since March 2022, when the impact of the coronavirus rebound resulted in an even better result. In December, fuel turnover also increased significantly by 4% compared to the previous month.

Total retail sales fell just 0.2% yearon-year, which is the best figure since November 2022. There is also a unique effect behind the current increase: the fuel price cap was implemented in December 2022, which means that people had been refueling at the market price for 12 months last December.

This means that, although retail sales have still not reached their prepandemic levels, they have moved away from the 2021 lows, at which they had been stagnant for a long time.

However, when looking at the year as a whole, the picture is not rosy: in 2023, retail sales fell by 7.9% from 2022.

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Budapest Business Journal | February 9 – February 22, 2024

Investment Activity Restrained Across CEE Region in 2023 Total CEE investment for 2023 stood at around EUR 4.9 billion, according to preliminary figures from Colliers.

The forecast for 2024 is EUR 5.5 bln-6 bln.

All countries in the CEE 6 suffered a yearon-year fall in volumes, with the drop for Hungary a 32% fall compared to 2022.

GARY J. MORRELL

“With the rise in interest rates, longterm government bond yields, and challenging economic and geopolitical events experienced over the past 18 months, the real estate market in terms of pricing (yields) has had to pivot to reflect the change in investor risk and sentiment,” comments Kevin Turpin, director of Colliers CEE, on the current state of the CEE investment market.

The result has been a drop-off in investor demand as buyers and sellers “recalibrate their acquisition plans” in this new economic reality, he explains.

“Therefore, I would describe the current climate as one of ongoing price realignment. The factors mentioned have impacted which real estate opportunities are actively (or even quietly) being marketed while, in parallel, we have experienced a bit of a slowdown in the growth of new buildings entering the markets across several real estate sectors,” Turpin adds.

Traditionally, the Czech Republic and Hungary see a high proportion of investment activity from domestic investors.

“The Czech capital accounted for circa 28%, and Hungarian capital accounted for circa 11% of CEE investment volumes in 2023. With all CEE domestic

CEE Investment Breakdown Sector

Amount (EUR/bln)

Office

1.66

Industrial

1.44

Retail

1.33

Hotel

0.26

Residential

0.20

Mixed-use/other

0.04

Total

4.90 Source: Colliers

Real Estate Matters A biweekly look at real estate issues in Hungary and the region

capital accounting for circa 56%, this significantly boosted liquidity rates across the region,” Turpin says.

“This figure is almost double the share of, say, three to four years ago. While we expect domestic investors to remain equally active in 2024, we also expect international investors to return as conditions and opportunities improve as the year progresses,” he says.

Hungarian Yields

Colliers put yields for Budapest at 6.25% for prime office, 6.75% for prime industrial and 8% for shopping centers. This compares to Prague, with the lowest yields in the region at 5.5% for prime office, 5.25% for prime industrial and 8% for shopping centers.

Colliers Hungary traced eight significant investment deals

for

2023

in the office, industrial and retail sectors. In office, this includes the purchase of H2Offices

by Erste fund from Skanska and the acquisition of RoseVille by BXR from Atenor.

Bence Vécsey, head of capital markets at Colliers Hungary, predicts an improving investment market in the country in the second half of the year. A decrease in value may boost activity, and financing will be more moderate. Finally, he says, ESG compatibility is a must. Turpin agrees and says the consultancy is well-placed to benefit from this latter trend.

“We have grown our ESG advisory services across the CEE in anticipation

of this and across quite a wide spectrum of disciplines. From the environmental (‘E’) and social (‘S’) side, these include Leed, Breeam, Well, Fitwel [sic] and Access4You certifications, ESG due diligence, energy audits and energy procurement, through to employee engagement and well-being, to disclosure and reporting, to name a few,” the regional director says.

CEE 6 Investment 2023 Country

Amount (EUR/bln)

Poland

1.87

Czech Rep.

1.12

Slovakia

0.67

Hungary

0.59

Romania

0.46

Bulgaria

0.19

CEE 6 Total

4.90 Source: Colliers

“The general consensus is that we are facing another challenging year when measured against the previous five- and 10-year investment volume averages (EUR 12 bln and EUR 11 bln, respectively).” He adds that improved economic indicators, a lowering of interest rate costs and an easing of geopolitical tensions would all help facilitate a return in investor confidence.

Progress on Ukraine, Frustration over Sweden Crisis Ukraine

Hungary finally allowed the passage of EUR 50 billion in European Union support for Ukraine at the latest EU summit on Feb. 1-2, following the revelation of a document in which EU officials threatened to target Hungary’s economy if the country’s leadership persisted with its obstruction.

NICHOLAS PONGRATZ

According to the confidential document which was leaked to the U.K. daily newspaper Financial Times, Brussels had outlined a strategy of sabotage that would exploit “Hungary’s economic weaknesses, imperil its currency and drive a collapse in investor confidence”

unless Viktor Orbán joined the consensus on supporting Ukraine at the summit.

If he continued to resist, EU leaders were instructed to “publicly vow to permanently shut off all EU funding to Budapest with the intention of spooking the markets, precipitating a run on the country’s forint currency and a surge in the cost of its borrowing,” the Financial Times reported. “This is Europe telling Viktor Orbán, ‘Enough is enough; it’s time to get in line,’” said Mujtaba Rahman, Europe director at consultancy Eurasia Group. “‘You may have a pistol, but we have the bazooka.’”

In the days following the report, Orbán told French weekly Le Point that Hungary would be prepared to support the Ukraine Facility if it was separated into four tranches that could be disbursed following annual approval. However, facing a united front of EU leaders (notably including ideological ally Italian Prime Minister Giorgia Meloni) who all warned of potential consequences, including economic sabotage and the invocation of Article 7 of the EU Treaty to revoke Hungary’s voting rights, Orbán was forced to accede.

Under Pressure

Under such pervasive pressure, Orbán relinquished key demands, such as insisting that the four-year package not be part of the EU’s collective budget and require annual approval. While the deal includes a yearly discussion of the package and the option to review it in two years “if needed,” it neglected to provide an outright veto for Hungary.

Orbán also received no assurances that the EU would release any funds that had been frozen due to concerns over democratic standards and the rule of law in Hungary, which the bloc had done before the summit in December to solicit the Hungarian premier’s cooperation.

He, however, claimed victory by declaring that none of the money would go to weapons for Ukraine. “It is not a financial fund for weapons,” Orbán told Kossuth Rádió on Feb. 2. “It will be used to prevent the Ukrainian state, on the verge of default, from collapsing,” he said.

Hungary is now under further international pressure to approve Sweden’s bid to join NATO; it remains the only country yet to provide assent following ratification by Turkey’s

Roundup

parliament. Calling Orbán the “least reliable” NATO ally for his delay of the process, U.S. Senator Ben Cardin, the Democratic chairman of the Foreign Relations Committee, said the White House should consider sanctions against Hungary and possibly remove it from the visa-waiver program.

Meanwhile, the Hungarian opposition called an extraordinary meeting of Parliament on Feb. 5 to vote on the ratification of Sweden’s bid, which was attended by U.S. Ambassador David Pressman, along with representatives from 15 other NATO allies, including Poland, Denmark and Slovakia.

However, lawmakers from the ruling Fidesz party boycotted the session, insisting that Swedish Prime Minister Ulf Kristersson visit Budapest before they ratify the bid. (The party has a two-thirds majority, and without its MPs in attendance, the meeting did not achieve a quorum; thus, no meaningful vote could be passed.) Pressman said afterward that Sweden’s NATO accession directly affects the United States’ national security and that of the alliance as a whole, including Hungary.

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Budapest Business Journal | February 9 – February 22, 2024

News | 5

Familiar Face now Beating the Drum for Bahrain There was a familiar figure from Budapest’s former diplomatic corps among the Bahraini delegation in town in the last week of January: former British Ambassador Iain Lindsay. The Budapest Business Journal sat down with him between meetings for an exclusive interview.

ROBIN MARSHALL

Lindsay left Hungary in September 2020 and retired from the foreign office after a 40-year diplomatic career. He was back in Budapest as an official representative for Bahrain’s Economic Development Board.

To those in the know, that transition makes perfect sense, but looking in from the outside, it might not be so obvious.

So, how did that come about?

“I had been the British Ambassador to Bahrain before coming to Budapest,” Lindsay explains. “When I arrived in Bahrain in 2011, it was about six months after the Arab Spring, and the relationship with Britain was rock bottom.”

The British foreign office tasked him with repairing that relationship.

Bahrain is important as it hosts the United Kingdom’s “only real naval base east Suez” and was also home to an air force base that was strategically important for supporting British troops in Afghanistan and Iraq.

Lindsay was seemingly as popular in the capital, Manama, as he was here in Budapest and kept in touch with the Bahrainis once he took up his post in Hungary, not least King Hamad bin Isa bin Salman Al Khalifa, to whom he is now an advisor.

“A year before I was to leave Budapest, they asked what I was thinking of doing after I left and [….] said, ‘Would you care to come back and work as an advisor to the Bahraini leadership?’” Linday recalls.

He jumped at the offer.

“It’s the most anglophile place, not just in the Gulf, but in the whole of the Arab world. Bahrain is not glitzy like Dubai or Doha. It’s much more grounded, more normal, frankly. And so, I went back there as an advisor to the Crown Prince [Salman bin Hamad Al Khalifa], who’s the Prime Minister, and the Economic Development Board, which essentially is Bahrain’s equivalent of Hipa [the Hungarian Investment Promotion Agency].”

Iain Lindsay The EBD delegation was in town for the second iteration of the HungarianBahraini Joint Economic Commission, which was initiated two years ago when Minister of Foreign Affairs and Trade Petér Szijjártó took a group of businesspeople to Bahrain. There has already been one development from this round: an agreement to meet annually rather than biannually.

Long History

“You can’t meet every two years if you want to be serious about an economic relationship,” Lindsay notes. Beyond that, what are business ties like? Has there been any progress on this trip?

Lindsay says while Dubai or Doha may be the Gulf cities with the greatest name recognition today, Bahrain has existed as an entrepôt or trading post for thousands of years.

“Bahrain has had a long tradition.

It was the Dubai of the Gulf until probably the late nineties, early noughties, which is when Dubai really took off. Because they were a trading entrepôt, they [Bahrainis] developed a whole range of skills, which other Gulf Arabs did to a lesser extent and much later. They’re two to three generations more internationally sophisticated than their neighbors,” Lindsay reckons.

As a result, the EBD wants Hungarian companies to look at Bahrain as their “landing zone” in the Gulf. One significant Hungarian cybersecurity company that has done just that is Quadron.

Discussions with other Hungarian firms about potential collaboration are ongoing, according to Lindsay.

“A Hungarian company, whose name I can’t mention because it’s under a nondisclosure agreement, has just won the contract to do cashless payments at the F1,” he says. Two of the companies on Szijjártó’s visit to Manama nearly two years ago were focused on vertical farming.

“That is an area that we’re having to look at. Because we are a small island – and having gone through COVID – food security is essential,” Lindsay admits. “Another [Hungarian] company that is in our pipeline is very much in the FinTech, financial services, ICT space. And I think that that’s actually an area where we can do more.”

There was talk last week of oil and gas company MOL having interests in Bahrain, but isn’t that like carrying coals to Newcastle or selling ice to Eskimos?

“They’ve got some technologies they would like to share with the Bahrainis for maximizing extraction. There’s also a rubber bitumen road surface they’re looking into, and some other areas like retail,” Lindsay says. He points out that MOL previously had an interest in Oman, which used to be a shareholder in the Hungarian company. “MOL is looking for other opportunities, and so is Bahrain.”

Post-fossil Future

Indeed, Lindsay adds that, just as it was ahead of the Gulf oil boom, Bahrain expects to arrive at a non-fossil future much sooner than its neighbors.

“Bahrain is the first post-oil and gas economy in the Arabian Gulf. It was the first country to discover oil in 1932. But, when you’re a small island,

your resources are finite. Bahrain has comparatively short hydrocarbon pockets compared with its neighbors purely because of size. We’re still obviously producing oil and gas, but the forecast is that by the late ‘30s or

early

’40s,

we run out of that,” Lindsay explains.

“We have started looking for renewables, and solar is a no-brainer, given where we are. When the Economic Development Board was set up 20 years ago, [.…] oil and gas was 42% of Bahrain’s GDP. Last year, it had fallen to 16%. The reason the EDB was set up was to diversify the economy by bringing in foreign direct investment into other areas.”

Financial services are now the most significant contributor to the economy at just over 17% (much of the Lebanese banking elite moved to Bahrain when Beirut began to unravel so tragically in the first civil war in the mid-1970s).

That is followed by oil and gas, with other priority sectors for investment, including manufacturing, logistics, tourism, ICT and FinTech. Citibank, for example, has just set up its latest global tech hub in Bahrain.

“Bahrain has always been the first in the region on education; the first girl’s school [opened] 100 years ago.

Education and gender equality have been taken seriously in Bahrain, which means that we’ve got [female] coders.

Half of the students doing engineering in university are women. These are not images of the Gulf that would necessarily come to mind,” he points out.

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Budapest Business Journal | February 9 – February 22, 2024

Hungarian Architects Using Space Tech to Reduce Carbon Emissions Hungarian architecture firm Paulinyi & Partners has signed a contract with the European Space Agency (ESA) to participate in the “Space for Green Construction” competition.

“With ESA’s help, we can put the data that space technology can provide to practical use for the benefit of the planet.”

BENCE GAÁL

The company has already been using advanced simulation tools to improve the energy efficiency of real estate developments and is now turning to space technology. It signed the ESA contract in December 2023.

The architecture firm is developing a solution that uses satellite Earth observation imagery to map urban thermal performance to improve the effectiveness of existing predictive simulations.

The implementation will also involve experts from Envirosense, another Hungarian company, who will assist Paulinyi & Partners in processing the satellite imagery and developing a map set. The Artes Bass program of the European Space Agency is funding the commercial development project.

“It is a great honor for us to work with the European Space Agency and a recognition of our previous research

Gergely Paulinyi, CEO of Paulinyi & Partners. and work. With ESA’s help, we can put the data that space technology can provide to practical use for the benefit of the planet,” says Gergely Paulinyi, CEO of Paulinyi & Partners.

Urban Heat Islands

Minimizing the urban heat island effect offers a significant opportunity to reduce carbon emissions from the construction industry. With the impact of climate change and current technology, cooling the increasingly warm cities could produce up to 60% more carbon emissions than heating by 2050; research is being conducted to minimize this.

WHO’S NEWS Do you know someone on the move? Send information to news@bbj.hu

Head of Jalsovszky Law Firm’s Tax Advisory Group Named After four years of experience in Big 4 tax advisory firms and a nineyear career at the Jalsovszky Law Firm, Ákos Baráti was promoted to lead the latter’s tax advisory group as a partner in January.

With four lawyers and three trainee lawyers in the group, Jalsovszky remains by far the market leader in tax advice among law firms, Jalsovszky says.

“I feel that there is still a lot of potential in the team and in the market, and this appointment is a further motivation and inspiration to exploit it,” said Baráti.

“With the workload, discipline, and team building we have seen from him over the years, Ákos highly deserved his appointment as partner,” commented Pál Jalsovszky, head of the firm. “Among other

temperatures, especially in densely populated urban areas, significantly contribute to greenhouse gas emissions.

Paulinyi & Partners is addressing this problem with HeatScape Resolve, which will be based on data from the joint project with ESA. This solution will provide planners with a problem map, analysis of urban heat island mitigation plans and help track progress.

commitments, Ákos had a key role in our summer campaign during which we established 77 trusts and three foundations for our clients. Ákos has become a widely known and respected tax lawyer over the years, and he will be able to build on this in the future as partner of the firm.”

Ákos Baráti

Urban heat island intensity in Europe varies between 1-16°C (34-61°F), with higher intensity in summer and cities in warmer climates. In Budapest, for example, a heat island can increase temperatures by

up to

6°C.

This has a significant impact on the heating and cooling demand of buildings, and although it has a beneficial effect on heating demand, it increases the consumption associated with cooling to a greater extent. In the summer cooling season, efforts to reduce

The service will complement the simulation energy models the architecture firm uses to improve the energy efficiency of buildings and neighborhoods while also increasing the value of investments. Satellite imagery will provide extremely valuable data for this development, which will be used by Hungarian experts over the next year.

“Energy modernization will be a dominant trend in the building sector in the coming period, driven by climate change and an aging housing stock,” explains Roland Németh, head of automation development at Paulinyi & Partners.

“This project can help mitigate the negative environmental impacts of rising average temperatures in the long term.

By integrating the data into our existing simulations, we will be able to apply it to specific projects, even at the level of entire neighborhoods,” Németh adds Editor’s note: For plenty more ESGrelated news, please see our Special Report, pages 11-20.

Flóra Baranyi Joins ConvergenCE Bringing with her almost two decades of professional experience, Flóra Baranyi has joined ConvergenCE’s construction and project management team, the company tells the Budapest Business Journal.

Actively involved in the construction of the award-winning Hotel Dorothea and Omorovicza Boutique & Spa, she previously worked with Biggeorge’s Holding, Mobilia-Artica, Futureal, and 3E International. As a passionate heritagebuilding enthusiast, she studies Danish to draw inspiration directly from the original language in Scandinavian architecture, particularly the Danish style.

“I’ve always aimed to have a unified understanding of the profession,” said Baranyi. “To achieve this comprehensive view and acquire the necessary knowledge, I navigated through the hierarchies of planning, investment, execution, and management. I also obtained the qualification of an investment expert. It’s a tremendous challenge and pleasure to now put this accumulated knowledge

Flóra Baranyi and experience into the service of ConvergenCE’s successful projects.”

“Flóra’s arrival presents a tremendous opportunity: her thoroughness, precision, preparedness, and diverse professional experience in various fields will be a significant asset to our team,” remarked Gábor Kovács, the head of ConvergenCE’s project and construction management team since 2010.

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www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Business

Program, a HUF 33 billion scheme targeting local food suppliers, and EUR 5 bln in GINOP Plus (Economic Development and Innovation Operational Program) funds.

Regarding the labor market, a crucial area of focus will be increasing the activity rate from the present 77.8% to a target of 85%.

“Between the ages of 25 and 55, the activity rate is 95%: basically, everybody wants to work, and everybody has a job,” Nagy said.

Therefore, the target cohorts in Hungary would be those under 25 and those older than 55, a potential reserve Nagy estimated at 100,000 people. Bringing them into the workforce would be “a tough job, but we have to improve. [.…] We have to activate everybody who wants to work,” he added.

Beyond that, the other resource, where no Hungarian workers could be found, would be regulated numbers of guest workers. Nagy put their level at 121,000 last year, including some 45,743 Ukrainian and Serbian citizens who do not need special permission to work in Hungary.

Successfully targeting these three areas – domestic consumption and investment, the labor market and attracting even more FDI – would lead to restored economic growth in 2024, Nagy insisted.

“We do not need to fear inflation anymore; it went as fast as it came,” he told his audience. Reiterating that Hungary could not expect much Márton Nagy, Minister of National Economy. in the way of help from a stagnant Photo by Hajnalka Hurta / AmCham. German economy, internal demand and investment will be crucial.

Responding to a question from German Drag? would help by targeting three areas: the floor, Nagy seemed to indicate “The big question for the markets is what growing household consumption, that policies around women retiring will happen with exports. Here, the stimulating domestic production early or staying at home to raise German market is very important,” Nagy and investment, and finding reserves more children might need tweaking, told AmCham. But, as he later made in the labor market, Nagy promised. remarking that when they were clear, there might not be much help from Household consumption is doubly introduced, Hungary did not have this quarter: “The German economy important because it also affects how full employment and the priorities was in recession last year and will much comes into central budget coffers lay elsewhere. be in recession this year.” in the form of value-added tax.

To another question about investing Fiscal policy in the form of “The Hungarian taxation system is in digitization and automation, Nagy said government spending cannot offer consumption-based. This is not true regarding supportive subsidies, “money much support to the Hungarian for every other country,” the national is not the question.” Multinationals are economy either. Then again, stateeconomy minister pointed out. prepared to take the necessary steps, he sponsored projects had formed too noted but suggested this was less often Building a Virtuous Circle the case with Hungarian SMEs, although high a share of the construction market.

Nagy said 2023 had seen a “very They were now heading for a “much it would certainly help them become negative scenario,” with real wage more normal” 4%, he said. tier one or tier two suppliers. growth contracting at a rate not seen “The budget deficit was at 6% [of GDP since 2009-2011. What was required in 2023]; this year, we cannot operate now was a virtuous circle where at the same level.”

2024 sees AmCham Hungary growing earnings would support The minister said monetary policy celebrate the 35th anniversary greater consumption, which would help could offer support, but Nagy again of its foundation in 1989 when domestic industries grow and invest, repeated recent government criticism 32 companies came together spurring growth in company profits of the National Bank of Hungary, to form the first American and thus allowing for real earnings saying “[monetary] easing is behind business chamber in Eastern to grow even further. other central banks.”

Europe.

Events are planned Nagy cautioned that a degree of Inflation was probably at 4% in January, throughout the year, including patience is also required, as there is he said. Holding the central bank rate an anniversary gala on June 7 usually a six-to-nine-month delay at 10% “does not support economic and the launch of its Diversity between a return to positive real wage recovery.” Nagy said he did not know Impact Awards, recognizing growth and an increase in retail sales. what lay behind that decision. “You “outstanding efforts in diversity The government has several would have to ask the MNB, which and inclusion” and reflecting programs to help stimulate domestic is independent.”

AmCham’s “commitment to production and investment, including What could support the economy an equitable and supportive subsidized credit through the would be the credit markets, EU funds, business environment.”

Széchenyi Card, the HUF 700 bln and foreign direct investment, the Gábor Baross Reindustrialization minister argued. Economic policy

Domestic Consumption, Labor, and FDI: 3 Pillars to Support Growth

Minister of National Economy Márton Nagy was the keynote speaker at a business forum organized by the American Chamber of Commerce in Hungary at the InterContinental Budapest hotel on Feb. 1.

ROBIN MARSHALL

Nagy began by welcoming the market’s positive reaction to the news announced that morning that the European Union had agreed on a HUF 50 billion package of aid for Ukraine, funding for which had been blocked at an earlier summit in December by a Hungarian veto.

His presentation, entitled “Growth Must be Restored in 2024,” outlined measures the government is taking to support economic recovery this year. But first, Nagy wanted to underline the importance of America to the Hungarian economy.

“The United States is now the third biggest investor in Hungary related to FDI stock,” he said. “That makes the U.S. a very important counterpart.

The economic cooperation is strong.”

American firms in Hungary had created 89,000 jobs and generated a net revenue in Hungary of HUF 7.753 trillion, according to 2021 figures, the minister said.

The trade balance was improving in Hungary’s favor, and the United States was the second most important trade partner after Germany.

One challenge for the relationship was the termination of the United StatesHungary taxation treaty, which took effect from Jan. 1 and which Nagy described as “a political question rather than economic.” Speaking for the government, he accepted that “we have work to do” to restore the treaty but asked that U.S. companies based here also help lobby for it.

Returning to his central theme, he said the economy would perform much better this year, provided domestic demand, which had remained sensitive to factors such as the price of food, could rebound.

8|2

Business

www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Change Ahead on Corporate Loans: Banks to Screen for Sustainability Risks Hungarian companies face significant changes in sustainability and ESG obligations this year, as was made clear at the Grant Thornton Hungary Client Day on Jan. 25.

These include new reporting requirements, supplier screenings, and adherence to EU cybersecurity directives.

GERGELY HERPAI

While large companies are familiar with sustainability reporting, extended responsibilities present new challenges.

However, compliance offers a competitive advantage, Grant Thornton, a leading business and tax advisory firm, told its guests.

In the final days of last year, the Hungarian Parliament passed national legislation to promote sustainable financing and unified corporate responsibility, known as the ESG Act. The Hungarian National Bank also launched consultations on its Minimum Sustainability Questionnaire with the financial sector.

While many are aware of the obligations defined by the ESG Act, particularly the requirement to prepare a sustainability report, less attention has been paid to the MNB’s supplier screening and ESG questionnaire, which is currently in draft form. These will impose additional new obligations on a wide range of Hungarian companies.

According to a draft recommendation sent by the central bank to financial institutions,

from

July 1,

banks will have to assess environmental and social sustainability risks for every corporate loan application, loan guarantee or factoring transaction exceeding HUF 50 million. From Jan. 1, 2025, the same will be required for every corporate application exceeding HUF 10 mln.

In practice, financial institutions must incorporate their risk assessments into a questionnaire format to screen all corporate clients exceeding these thresholds.

The relevant workshop is ongoing, so the recommendation does not necessarily reflect the final situation. However, based on the current plans, clients will be required to answer between 30 and 90 questions about the ESG aspects of their operations, including the impact of climate change on their business.

interest from this year. These companies must also develop a sustainability strategy and risk management system.

The requirement to assess actual and potential adverse impacts on human rights and the environment applies not only to their operations and those of their subsidiaries but also to their business partners.

Gradual Extension

The MNB's Minimum Sustainability Questionnaire is expected to be gradually extended to cover all corporate lending following the conclusion of the expert consultations.

András Balásfalvi-Kiss Away from the banks, the reporting requirements for the Sustainability Act, which will be extended in stages, will first apply to large companies of public

Péter Kóczé Therefore, the law requires obliged parties to screen their suppliers to assess the sustainability of the entire corporate value chain. They must also prepare an annual ESG report on fulfilling their obligations, including supplier screening.

“While a significant number of large companies are already familiar with sustainability reporting, the obligation to conduct sustainability screening is a new task for the vast majority, which is practically impossible without accredited IT solutions,” András Balásfalvi-Kiss, head of ESG and sustainability at Grant Thornton, said at the firm’s event.

“Large companies in Hungary must now appoint a sustainability officer, implement a whistleblowing system, and establish both preventive and corrective measures for sustainability-related issues,” Péter Kóczé, accounting and tax automation business unit manager at Grant Thornton Digital Ltd., added.

Additionally, they will have to manage and report data on environmental, social, and governance factors and prepare

Thousands of Companies Affected by Cybersecurity Regulations “Hungarian companies will have to comply with other new obligations in line with EU regulations,” stated Anna Király of Grant Thornton’s Cybersecurity Certification Directorate. Among other significant ESG-related news for Hungarian companies this year is the enactment of the Cybersecurity Certification and Supervision Act, which aims to implement the EU’s new cybersecurity directives (NIS2).

“This legislation is designed to use regulatory tools to check the information security readiness of thousands of Hungarian companies and to set obligations for them for 2024, depending on their size and field of activity,” added Király.

Companies with more than 50 employees or an annual turnover of more than EUR 10 mln and operating in strategically risky sectors fall under the scope of NIS2. The novelty is that

this definition now designates a much broader spectrum of companies for regulatory inspection than those previously required to deal with cybersecurity.

For example, companies in energy, transportation, healthcare, water management, pharmaceuticals, digital infrastructure and services, logistics, waste management, electronics and automotive manufacturing, food production and distribution, chemicals, and research will all be affected.

ESG Compliance: A CostBenefit Analysis for Hungarian Businesses The cost of complying with ESG obligations depends on a company’s size. As the law’s primary objective is to ensure participation, penalties are suspended for the first year. However, in line with EU practice, companies that fail to meet their reporting obligations could face fines of up to 2% of their turnover in subsequent years, as well as exclusion from tenders and public procurement projects.

Complying with the obligations brings other benefits than simply avoiding punishment, however.

Firms can gain valuable insights, for example, into the extent and nature of their exposure to the harmful effects of climate change. Moreover, in international markets, the ability to report on sustainability and provide data is (or will be) a competitive factor.

Therefore, while complying with the new requirements will undoubtedly be an additional burden for those affected, it will be a prerequisite for maintaining competitiveness in the long term.

It may even offer an advantage over companies in countries that delay the implementation of these requirements.

The ESG law thus serves several purposes. Improving the protection of the environment and human rights is a significant value in itself.

On the other hand, the early and forward-looking adoption of the EU directives is driven by the intention of a smooth transition to a sustainable economy. Grant Thornton says that one of the main goals of the new framework is to minimize the inevitable administrative burden of the transition and to ensure a competitive advantage for Hungarian businesses.

an annual ESG report summarizing their sustainability efforts. These new regulations indirectly impact almost all Hungarian companies, including SMEs, as they apply to a wide range of businesses involved in various sectors and transactions.

Between Jan. 1 and June 30 this year, affected organizations will have to selfidentify and classify their security and appoint a dedicated person responsible for cybersecurity. From 2025, they will have to undergo a mandatory IT audit every two years by an auditor registered with the Supervisory Authority for Regulated Activities of Hungary (SzTFH).

Meeting these requirements may pose significant challenges for affected organizations, so it is advisable to start preparing as soon as possible, Grant Thornton’s experts emphasized.

www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

PRESENTED CONTENT

Ford Fuelling Growth Through a Winning Product Portfolio

BBJ STAFF

BBJ: What plans are there to involve Hungarian or Czech businesses in the global or European value chain? And what is next for Ford in Hungary regarding business developments or new hires?

AL: We will focus on growth in the region in 2024. After the last couple of years, our supply chain is back on track to support our ambition with the necessary production, a prerequisite to expanding the business. On top of this, we will have a busy year in terms of new product launches as well: We will introduce the new Ford Kuga, Puma, Mustang, Bronco and the fully electric

Business | 9

with our new electric Explorer, plus the electric version of Hungary’s favorite commercial vehicle, the Ford E-Transit.

We have put in place an extra offering to complement the governmental scheme and convince business customers with an attractive business proposition.

BBJ: How do you view progress on diversification in your markets?

What are the percentages of women and ethnic minorities in the workforce and the management?

AL: Diversity is a popular topic that we increasingly hear about, though there is slow movement regarding general results. At Ford, we have been focusing on diversity for quite a while; as a result, the share of female colleagues in Hungary and Czech is much higher than the European average. Overall, the female ratio within our cluster is around 50%, while in the management, it is about 40%, which are exceptional results. This is all about becoming the employer of choice for female talents, where hiring, retention, development, and promotion play critical roles. In terms of other minorities, we have 18 nationalities working within our company, so we are making progress there as well.

Ultimately, it is known that diverse organizations deliver better business results, and responsible companies take the necessary steps to materialize this.

Andrea Laky, managing director of Ford for Hungary and the Czech Republic, talks with the Budapest Business Journal about how the U.S. automaker is embracing electrification and diversity to fuel its businesses in the region.

BBJ: How was the 2023 business year in Hungary and the Czech Republic? How did these compare with the region and Europe as a whole?

Andrea Laky: 2023 was an important year in our life as we celebrated 120 years of the Ford Motor Company and the 30th anniversary of Ford’s foundation in the Czech Republic.

We are proud that we managed to close a successful year in Hungary and Czech, though the aspects of the success are quite different given the priorities for the two countries.

I would highlight that, despite being our smallest organization in Europe, the Czech team is the most efficient in terms of its financial results, while in Hungary, we maintained our leading position in the commercial vehicle segment for the 15th consecutive year. Our share was 25%, meaning every fourth commercial vehicle sold in Hungary was a Ford last year.

2

Andrea Laky, managing director of Ford for Hungary and the Czech Republic Explorer on the passenger vehicle side; in terms of commercial vehicles, we are just launching the new Transit Custom and the new Ranger. The former won the International Van of the Year award, while the latter garnered the Pick-up of the Year award.

Regarding business development in Hungary, we are betting on commercial vehicles and will focus even more on electrification and the related customer experience.

Digitization, connectivity, big data, and AI enable us to personalize and take the experience to a new level.

In terms of new hires, our Business Solutions Center is still growing and provides exciting opportunities with more than 650 roles in 35 departments. Ford Central and Eastern Europe Ltd. is an ideal workplace for anyone interested in an automotive career, from strategy development to implementation in operational areas.

BBJ: A new corporate electric car subsidy scheme comes into force in Hungary from Feb. 1. What should we expect from the scheme, and how will Ford participate?

AL: The government is trying to address two critical areas with the new electric vehicle subsidy scheme that are considered the main obstacles to improving the share of EVs in Hungary. On the one hand, it provides good support to improve the charging infrastructure, and on the other hand, it makes EVs more affordable and thus more attractive for business customers. Both actions will support an increase in electric vehicle penetration, currently at 4.8%, one of the lowest in Europe. As a result of the scheme, an EV user can expect more charging stations and, hopefully, more fast chargers, which will help mitigate range anxiety.

We are participating with the electric version of our iconic Ford Mustang, the Ford Mustang Mach-E and later

BBJ: You have become a role model in what is generally considered to be a male-dominated industry. What does it take for a woman to be a successful leader? What advice would you give to women career starters hoping to reach management level?

AL: I did not have a typical childhood.

While most little girls played with their dolls, I was playing with a blue car and taking care of my sister, who was born with a particular syndrome. I had to learn early to assume responsibility for someone and myself. I left home at the age of 14 and started to study water management in a male-dominated high school. I did not know then, but this was my entry ticket to the automotive industry.

One friendship I made there guided me to Ford and convinced me to start a career that has now lasted for 30 years.

When discussing successful leaders, I think gender does not really matter; it is the ability to set up and motivate a team to reach specific goals that is key. The difference is how we achieve this and the support we receive on the journey. I advise young career starters to dare to dream, set their goals, and work hard for them. Do not let failure stand in the way; believe in yourself, and go for it.

If you do not trust yourself, who will?

BBJ: Since you are a woman, a driver, and work in automotive, where do you stand on the better driver debate? Is one gender better than the other? Or do men and women have different strengths and weaknesses behind the wheel?

AL: Both genders have their strengths and, based on my experience, women are weaker in the routine but more careful, so, in the end, they have fewer accidents, according to statistics. So, stereotypes regarding female drivers should be reconsidered.

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www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Special Report ESG

More Hungarian Firms Must Prepare EU Sustainability Reports European initiatives regarding sustainability reporting are being introduced across the continent, with many Hungarian companies having to adhere to new regulations and a more comprehensive range of requirements for reporting, as well as shifting their focus to issues highlighted in EU legislation.

LUCA ALBERT

“Up until now, the concept of environmental footprint has been the center of attention, and it is no accident since adaptation and mitigation issues related to climate change are the most important for humanity at the moment,” says Julianna Nagy, senior manager and head of ESG and climate change services at KPMG Hungary.

Relevant policies centering around environmental impacts include approaches such as the 2020 “EU Green Deal,” which focuses on the long-term goal of making the European Union climate neutral by 2050, and the related Carbon Border Adjustment Mechanism (CBAM), a carbon tariff on carbon-intensive products imported into the European Union, for which mandatory reporting began in 2023.

The EU also introduced the Corporate Sustainability Reporting Directive (CSRD) in

January

2023,

prompting Hungarian companies to rework their ESG reporting strategies and considerations; the previously used

special emphasis on promoting the implementation of family-friendly operations,” says KPMG’s Nagy.

Although many EU initiatives seem to center around environmental aspects, the Corporate Sustainability Due Diligence Directive (CSDDD) also highlights the importance of focusing on social perspectives.

“At the end of last year, the Council of Europe and the European Parliament reached a temporary agreement on the CSDDD, which aims to increase the protection of the environment and human rights in the EU and worldwide,” Nagy explains.

“According to this, those affected by harmful human rights and environmental impacts caused by companies, or the civil organizations and trade unions representing them, are also entitled to initiate civil rights proceedings,” she notes.

“The sustainability report will have to be audited The EU introduced the Corporate Sustainability Reporting Directive in January 2023. From this year, more businesses are required to by qualified auditors, and prepare CSRD reports. Image by wutzkohphoto / Shutterstock.com internal training processes within the field of auditing, Non-Financial Reporting Directive regulation] is not an increase in the which will result in auditors (NFRD) system of reporting was frequency of reporting, but rather the who properly understand criticized for implying that ESG aspects simplification of reporting and the CSRD requirements, are not financially relevant. clarification of integrated reports,” “CSRD introduces not only new Szücs concludes. have already started. obligations, such as publication and Ákos Lukács, head of climate change There is a lot of domestic verification of the report, but also new and sustainability services at EY, says concepts, such as the application of the introducing the CSRD reports will sustainability auditor double materiality approach, in which necessitate more training. experience, but the new it is necessary to take into account not “The sustainability report will have only the company’s own effects, but also to be audited by qualified auditors, law requires new training.” those arising within the supply chain,” explains Réka Szücs, sustainability service line leader at Deloitte.

“From 2024, in addition to companies that were previously obliged to report non-financially, such as companies of public interest, large companies subject to the CSRD are also required to prepare a sustainability report,” she says.

Thresholds Raised

“The application thresholds for the CSRD were raised in October by the European Commission, which in turn raised the applicable values, so, from the business year starting Jan. 1, 2024, companies with a turnover of EUR 50 million, a balance sheet of over EUR 25 mln and employing more than

250 people

will be required to publish a report,” Szücs adds.

“Contrary to the expectations of recent years, [the new sustainability reporting

and internal training processes within the field of auditing, which will result in auditors who properly understand CSRD requirements, have already started. There is a lot of domestic sustainability auditor experience, but the new law requires new training,” he says.

Along with the implementation of CSRD in Hungary in January, the Hungarian Parliament also enacted the Sustainable Finance and Unified Corporate Responsibility, also known as the ESG Act, to ensure sustainability-related compliance from businesses and the transparency of ESG reporting.

Family-friendly

“Already among the basic principles of the ESG Act, it appears that domestic companies must examine and manage the effects of their business activities not only on the environment but also on their social responsibility, with

The CSDDD differs from the CSRD in its overall aim, as the latter describes the requirements for accepted sustainability reporting from companies, while the former seeks to set the standard for conscientious corporate conduct.

“Domestic ESG reporting should not be confused with the sustainability disclosure obligation to be implemented into domestic practice by member states prescribed by the CSRD,” adds Nagy.

“The implementation of the latter is covered by law, namely through the amendment of certain provisions of the Act on Accounting and the Chamber of Auditors. Thus, in the management report, as a separate part of it, a sustainability report must be published along the ESRS standards, and limited assurance certification of the published data will also be mandatory,” she concludes.

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3

Budapest One Achieves Well ‘Platinum’ Accreditation

Green Matters

Budapest Business Journal | February 9 – February 22, 2024

Special Report | 11

A monthly look at environmental issues in Hungar y and the region

The 25,000 sqm Budapest One project has become the first office complex in Hungary to be awarded the highest possible Well “Platinum” certification.

GARY J. MORRELL

A further two phases at the complex will deliver an additional 40,000 sqm of space at the business park. Developer Futureal says its policy is to develop all its offices in accordance with accreditation standards for Well, a third-party organization dedicated to the interior environment Certification is increasingly and its impact on office occupants. the norm for new developments and “Well at Scale is for business refurbishments at the higher end leaders who want to prioritize health of the office markets in Hungary and well-being across their entire and Central Europe. The spread organization or real estate portfolio,” of the Breeam and Leed third-party explains Regina Kurucz, sustainability accreditation systems is seen as a sign consultant and qualified Well assessor. of the growing concern with interiors “It is not impossible for a tenant to and health issues as part of ESG. get [their office] Well certified in a noncertified building, but the Well Core Panattoni Park Cheb Certification of the building makes South ‘Outstanding’ the process much easier and quicker.

The Panattoni Park Cheb South has Therefore, I expect an increase in achieved Breeam “Outstanding” New the number of Well-certified office Construction accreditation with a buildings in Budapest,” she comments.

94.2% score, according to the regional “Right now, seven buildings are logistics park developer and operator.

Well Core certified in Budapest, and “A modern industrial facility at seven others are Well pre-certified.

Panattoni Park Cheb South has become The number of Well-certified spaces the most environmentally friendly has a constant increase of 13-15% every industrial building in the world,” the quarter in Europe. This shows the developer says. The 40,000 sqm project demand for healthy spaces is not losing is a logistics center for the German interest,” Kurucz says. online auto parts distributor Autodoc.

“Our buildings, the places and spaces “It underscores that modern where we spend the vast majority of industrial construction in the Czech our time, hold the key to protecting our families, businesses and the wider public. Republic truly has the highest global standards and places A wealth of rigorous research highlights strong emphasis on responsibility the profound role buildings play in towards the environment and local promoting human health, preventing communities,” adds Pavel Sovicka, disease and supporting well-being,” managing director of Panattoni the assessor notes. for the Czech Republic and Slovakia.

“Several key factors within buildings, The factory boasts greenery, low including indoor air quality, water water maintenance, an outdoor gym, quality, thermal comfort, acoustics, plus a dining and relaxation area. The lighting, materials, and access to physical activity and healthy foods, have complex was built on a brownfield site, and energy consumption has fallen a direct influence on shaping positive by 59% compared with the reference health outcomes,” she says. state, resulting in a 68% decline in A large and growing body of the level of CO2 emissions generated research demonstrates that adopting by the building, Panattoni says. healthy building practices can The complex is only the seventh Breeam drive numerous health, economic “Outstanding” building in Europe. and societal benefits, Kurucz adds.

Budapest One

Banks Must Disclose Green Asset Ratio

17,000 pre-registration requests.

The scheme aims to support private individuals by supplying residential properties with renewable energy. Solar energy was the leading renewable energy source in 2023, generating 3,790 GWh (gigawatt-hour), up 54% since 2020. In 2021, it accounted for 10.6% of Hungary’s electrical energy and 55.2% of the country’s total renewable energy output, according to the Hungarian Energy and Public Utility Regulatory Authority.

With so much attention being paid to ESG, real estate and related industries must adapt and adjust to meet the legislative demands being raised. 2024 is particularly historic, as banks have to disclose their Green Asset Ratio for the previous year for the first time, says Kevin Turpin, director of Colliers CEE. “The Green Asset Ratio informs what percentage of banks’ financial asset base is taxonomy-aligned. That is why there is a significant spotlight on taxonomyaligned investments right now, both from banks and investment funds,” he adds.

Typically, many building owners, developers and occupiers start by looking at their carbon and sustainability footprint and how they can reduce the negative impact of a property, but also where it could have a positive effect within ESG.

Government Program Promotes Electric Car Purchase Non-refundable state contributions can be sought by domestic customers for the purchase of electric cars, vans and minibusses starting in February. Across Europe, local authorities are banning the most polluting diesel and petrol cars.

However, only 6% of new commercial vehicle fleets in Europe are EVs. Rapid change is likely, however, as 2030 is the EU threshold for manufacturers to sell fossil-fueled vehicles; from that point only EVs may be sold new.

Solar Energy Plus Program Initiated The government’s HUF 75 billion Solar Energy Plus Program has achieved

Well-accredited Office Buildings in Central Europe (January 2024) Country

Platinum

Gold

Czech Rep.

2

4

Hungary

1

6

Poland

2

20

Romania

2

2

Slovakia

1

1

12 | 3

Special Report

PRESENTED CONTENT

www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Teamwork and Education Give Frame the SFM Edge We started to focus on energy consulting, especially green energy options.”

Puskás says the market did not understand why Frame had taken those steps for a while, but he thinks there is now a growing recognition.

Whether it is between the building owners or their tenant companies and various service suppliers, Frame Group has been building bridges since 1989, its boss says.

It is now pioneering the adoption of SFM, or sustainable facility management, in Hungary.

Influencing Change

ROBIN MARSHALL

For Attila Puskás, executive board director, the move to support sustainability in a corporate world increasingly dominated by ESG questions and non-financial reporting is entirely logical, but it still required a conscious decision. Frame was smart enough to see the way the wind was blowing and, as a result, has a head start on much of its competition.

Buildings are considered one of the most significant contributors to carbon emissions. And who knows buildings better than the facility managers who look after them? Two ideas crop up repeatedly during our conversation: teamwork and education.

“Look at who’s fully involved in ESG today; it’s usually the bigger companies, especially the multinationals. And most of them, as I see, have started to build up in-house green teams,” Puskás says.

“What we’d like to suggest to our clients is that they involve us in these green teams when it comes to property issues because we can share our experience, our data, and we can suggest at least a shortlist of options for how to do things in the most efficient, easiest and fastest way to try to achieve energy savings,” he tells the Budapest Business Journal.

For years, property and facility management have been reactive; a customer requests something, and the PM or FM team responds. Increasingly, ESG demands something more proactive, whether replacing windows, sourcing green energy, or updating equipment to find a more efficient solution.

Another way of looking at it is as a debate between CapEx and OpEx. If your focus is on operational expenses, you might want to find the cheapest, most effective, environmentally friendly surface cleaner. If your priority is to

replace an old boiler with something more efficient, on the other hand, you are looking at an initially more expensive capital expenditure outlay to save money in the longer term.

But in either case, Frame says it will be able to advise you on the best options.

HVAC Benefits

Take heating, ventilation and airconditioning systems for example.

Update it and make it more efficient, and you will see long-term savings once you swallow the short-term purchase and installment costs. But a modern HVAC unit brings other benefits.

“Many studies have demonstrated how important the employees’ daily life is in motivating the return from home office.

One of the top issues is how they feel in the office. A big part of this is the air quality, for example. If you are using old HVAC equipment, and maybe the filters have not been cleaned properly for some time, the air quality will be much worse,” Puskás explains.

“Our view was that sustainability would be very influential for suppliers if they want to stay competitive. And that was why we were building up these two other legs because they all connect to each other. As a facility management provider, we focus on our customers, what they must replace, or how they can reach their sustainability strategy. So, with our fitout team, we can change the windows or the equipment. We can change almost anything on the building,” he insists.

“Our energy management team can provide professional advice on the easiest way to get green energy.

For example, one of our biggest projects last year was for a pharmacy company, where we built out the whole green energy supply,” he explains.

The Suzuki factory in Esztergom is an excellent example of a customer benefitting from this multi-pronged approach.

Frame Group provides everything from energy solutions to fit-out, cleaning and maintenance. Another is Vodafone Hungary. A couple of years ago, Frame signed a five-year total facility management contract with the telco covering the whole of Hungary, including the international operation service company, Vois. That includes energy management, security, database maintenance, fit-out, cleaning and more for the Budapest One head office, all data centers, the Miskolc Office Center and 24 countryside branches.

Frame Group seems to have accurately predicted the coming sustainability wave early enough to become a pacesetter for the market. So, what does Puskás think the next big trend will be?

Attila Puskás “It’s not a new word anymore, but AI. We are putting together a focus group to collect and analyze the data and One thing that helps the Frame figure out the next steps, but I think Group stand out, the director says, AI will help us do many things smarter. is that it keeps as much of its work Some software is starting to appear now, in its own hands as it can, rather than although it is still on a basic level. But subcontracting out to third parties. when I see how much influence AI has “Our strategy is to try wherever over other parts of our life, I’m sure we possible to provide services through will meet with it in our sector pretty soon.” our employees. First of all, it’s much More immediately, he welcomes more efficient for communication and the arrival of MOL company MoHu monitoring our work,” Puskás says. on the scene and the government’s “Secondly, we can teach our system apparent drive to improve the waste and educate our colleagues directly. management situation. Crucially, So, for example, we have our security he believes having one central body staff, our own cleaning staff, and most to deal with should make life easier. of the maintenance for the machinery “Each side will have to spend some time is done by our staff.” Only highly understanding the other, but I feel that specialized work, such as elevator MoHu is open to listening to our requests maintenance, is farmed out. But Frame right now. Because if they understand Group’s capabilities don’t end there. our needs, they can implement how it “Some years ago, we tried to works on the field and try to provide figure out how we could offer more the same level of waste management advanced and more efficient facility countrywide. I think that could be management, and the board decided a huge step for the efficiency of office to start to build up two other legs for management. And it is another case us to stand on: one was office fit-out, where we can be a bridge between our and the other was energy management. customers and the authority,” he adds.

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The dynamic landscape of trade barriers and heightened regulatory demands necessitates a fundamental realignment of international supply chains. However, the critical question remains: How can we establish robust measures to shield supply chains reliably from potential future shock waves?

European companies are under increasing pressure to seamlessly integrate environmental, social, and governance principles and initiatives into their supplychain risk management. Over the last two decades, the recognition of ESG as a crucial element in risk management has gained prominence, driven by heightened expectations from customers, investors, employees, and regulatory bodies. By comprehending disruptions linked to ESG within their supply chains and ecosystems, businesses can proactively anticipate challenges and adapt swiftly, thereby enhancing their overall resilience. However, for many companies, accomplishing this objective remains a considerable challenge.

Context: What’s driving ESG into Supply Chain Risk Management?

Pressure from Stakeholders ESG adoption, initially driven by internal initiatives, is now steered by external stakeholders: B2B customers, investors, and employees. B2B customers demand precise reporting on GHG (greenhouse gas) emissions, human rights risks, and due diligence practices, recognizing sourcing from ESG-conscious suppliers as a strategic move for sustainability.

Investors emphasize the need for accurate ESG data, particularly on Scope 3 emissions, and enhanced risk management practices to facilitate comprehensive portfolio analyses, while employees, notably the younger workforce, champion ethical behavior, environmental and social goals, and the integration of ESG due diligence into supply chains.

Image by d.ee_angelo / Shutterstock.com

Safeguarding Supply Chains: Navigating Global Changes with ESG-compliant Resilience Strategies

This shift towards ESG-conscious practices aligns with the overarching objective of enhancing sustainability and ethical standards, meeting the expectations of diverse stakeholders in the corporate landscape.

Regulatory Drive for ESG Compliance in Europe ESG regulations in Europe, notably the Corporate Sustainability Reporting Directive (CSRD), are compelling companies to adopt robust accounting practices. The impending Carbon Border Adjustment Mechanism (CBAM) from 2026 urges businesses to enhance climate-data efforts for carbon-intensive imports. Immediate pressures in Germany and Norway enforce stringent supply chain sustainability and due diligence regulations, requiring risk assessments, documentation, reporting, and remedial actions. The regulatory landscape is evolving, and early investments in ESG risk assessment are crucial for companies to navigate challenges, seize opportunities, and maintain a competitive edge.

Enhanced ESG Reporting Standards One of the critical components of Hungary’s new regulations is the introduction of enhanced ESG reporting standards for corporations. Effective from Jan. 1, 2024, companies operating in Hungary must disclose detailed information about their environmental impact, social initiatives, and corporate governance practices. This transparency not only allows investors to make more informed decisions but also encourages companies to adopt more sustainable business practices to meet regulatory requirements.

How is ESG Risk Managed in the Supply Chain?

For companies producing or distributing physical products, navigating supply chains involves circumventing various potential risks.

When evaluating supplierassociated risks, companies typically follow these steps:

• Due Diligence: Conduct a thorough evaluation and onboarding of new suppliers, assessing various risks and determining the suitability of each entity in the supply chain.

• Risk Profiling: Assign a risk profile to each supplier based on the collected due diligence data.

• Ongoing Mapping: Continuously map the supply chain to identify new vendors and assess potential risks.

• Monitoring and Engagement: Regularly monitor and engage with higher-risk suppliers, addressing issues promptly.

• Technology Implementation: Assess the potential to respond to risk incidents by integrating technology solutions into the supply chain.

Following risk identification and assessment, companies must decide on appropriate courses of action, often led by the procurement department.

Opting for suppliers with robust business continuity and enterprise risk protocols is crucial during category purchasing decisions. Diversification is emphasized to avoid dependence on a single supplier, ensuring alternatives are in place to mitigate disruptions. Companies also maintain critical replacement parts and equipment, practicing stockpiling to ensure operational continuity.

Pooling, such as sharing backup resources with partners or even competitors, becomes a strategic approach. Legal safeguards should be implemented through contracts that offer flexibility to buyers or favor backup suppliers to provide adequate protection.

Maintenance agreements with suppliers ensure the guaranteed availability of equipment and infrastructure as needed.

Additionally, companies should address residual risks that cannot be directly resolved by other approaches, contributing to a comprehensive risk management strategy in the supply chain.

Leveraging Dun & Bradstreet for Enhanced Supply Chain Resilience In pursuing a more resilient supply chain, Dun & Bradstreet provides data-driven insights and tools to fortify business strategies.

Incorporating ESG Data for Enhanced Sustainability Companies can leverage Dun & Bradstreet’s ESG Ranking to evaluate potential financial risks associated with Environmental, Social, and Governance performance. This tool aids in identifying partners with heightened risks in the supply chain while fostering alignment with companies demonstrating positive ESG practices.

Ensuring Transparency in Supplier Relationships through Compliance Screening Utilizing Dun & Bradstreet’s compliance screening, organizations can thoroughly examine global companies for negative reporting and associations.

By categorizing “high-risk” suppliers and recording pertinent information, companies can effectively mitigate risks associated with illegal or unethical activities.

Diversifying and Strengthening the Supply Chain Drawing on Dun & Bradstreet’s extensive database, companies gain insights into the risk levels of existing suppliers and identify alternative options. This approach enhances supply chain agility by establishing a diversified pool of potential partners. The integration of these strategies empowers organizations to cultivate a resilient, well-informed, and ethical supply chain.

Conclusion How to incorporate ESG Risk Management into the Supply Chain Effective supply chain ESG risk management requires firms to build a solid foundation by prioritizing disclosure and compliance in the initial stages. As matters evolve, integrating ESG into ongoing risk management is crucial, emphasizing tailored assessments for specific ESG issues. Complete visibility into the supply chain is critical, achieved through robust governance practices and comprehensive mapping, enabling effective ESG risk analytics. Leveraging third-party data and technology enhances the robustness of risk management systems, expediting due diligence efforts.

Proactive preparedness, facilitated by technology, ensures timely adjustments and alternative supplier identification, fostering business resilience in challenging circumstances.

D&B ESG Intelligence, dnb.com

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Budapest Business Journal | February 9 – February 22, 2024

ESG Compliance in Hungary: Changes, Requirements and Deadlines With the implementation of the ESG Act by the Hungarian Parliament, alongside additional requirements for domestic companies set by the Council of Europe, the landscape of sustainability reporting in Hungary has begun its transformation towards a more transparent future.

LUCA ALBERT

“The ESG law adopted in January sets new expectations for domestic companies, which include not only reporting but also risk management and complaint handling, among other things. The ESG Act creates not only a new obligation but also an opportunity for companies to build relationships across the supply chain and start collecting sustainability data,” says Réka Szücs, sustainability service line leader at Deloitte.

“For domestic companies, it is also an important ESG-related obligation to prepare an ESG report in accordance with the ESG Act. Those obliged by the law are large domestic companies, [...] the deadline for publishing the report is within six months after the end of the business year,” she adds.

Julianna Nagy, senior manager and head of ESG and climate change services at KPMG Hungary, breaks down the criteria for which companies must hand in sustainability reports in accordance with the ESG Act. “The scope of the ESG Act covers companies with headquarters in Hungary. Among them, businesses of public interest who meet at least two of the following three criteria for 2023 must present ESG reports for the 2024 business year next year:

“[Companies] must fill out a declaration with all their suppliers on the fulfillment of human rights and environmental protection requirements, and they must expand their complaint reporting system according to the Complaints Act to handle violations of obligations related to social responsibility or environmental protection, which must also be enforced with suppliers,” Nagy shares.

“These tasks must also be extended to the suppliers’ suppliers, meaning that the obligation ripples through the entire subcontractor system,” she points out.

“In addition, large companies must develop their own ESG strategy and internal ESG compliance system and prepare an ESG report on the fulfillment of their due diligence obligations for sustainability purposes on an annual basis. They can also involve their suppliers in this activity,” Nagy concludes.

“Thousands of Hungarian small- and mediumsized enterprises must Based on different criteria, a range of businesses will prepare a report, some be required to start filing ESG reports between now of them from 2025 based and 2027, in each case reflecting the previous year’s results. Photo by Mameraman / Shutterstock.com on the 2024 reporting period, a larger section from 2026 based on the stakeholders in Hungary may exceed Balance sheet totals greater than several hundred in 2024,” he explains.

HUF 1 billion, annual net sales of 2025 reports, and others over “The location of the audited sustainability reports is the [companies’] from 2027 in regards annual report, so these reports must to the 2026 reporting and more than 500 employees,” typically be completed and submitted period. Everyone she explains. to the respective companies in the first “In 2026, a report for the 2025 quarter of the year following a business involved must start business year must be prepared for year,” Lukács points out. the first time for those large companies “In addition to the Sustainability Report, preparing now.”

HUF 2 bln,

that meet at least two of the following three conditions this year, [the criteria being] balance sheet totals higher than HUF 10 bln, annual net sales of over HUF 20 bln and over 250 employees during the business year,” says Nagy.

“According to this, thousands of Hungarian small- and medium-sized enterprises must prepare a report, some of them from 2025 based on the 2024 reporting period, a larger section from 2026 based on the 2025 reports, and others from 2027 in regards to the 2026 reporting period. Everyone involved must start preparing now,” Nagy warns.

Multinational Subsidiaries Ákos Lukács, head of climate change and sustainability services at EY, addresses the question of the Hungarian subsidiaries of large, internationally-listed companies. “[They] must provide their parent company with data for the

2024 business

year, which does not entail the publication of an independent report, but the number of affected

the concept of an ESG Report has also been introduced, which covers roughly the same scope of companies as the Sustainability Report; however, the two reports are not the same,” he cautions.

“The ESG Report is […] for supplier, screening and risk management purposes, the origin of which can be found in the EU Corporate Sustainability Due Diligence Directive regulation and the German Supply Chain Act. Its exact minimum content requirement is expected to be published in the future by decree,” Lukács adds.

Management Requirements Apart from the basic requirements for a transparent sustainability report, Hungarian companies are also expected to carry out additional management tasks under new requirements for ESG compliance, according to KPMG’s Nagy.

“At least once a year, [companies] must carry out a risk analysis covering suppliers and develop systems suitable for dealing with them, which also deal with problems identified with subcontractors,” she explains.

Regarding mandatory reporting for Hungarian companies in 2024, one of the first filings for specific organizations will be the carbon border adjustment mechanism (CBAM) report, an initiative to decrease carbon emissions within the European Union by increasing tariffs on importing carbon-intensive products.

The transitional period for CBAM in Hungary ran from October to

December

2023.

Hungarian importers of products such as cement, steel, fertilizers, and other carbon-intensive imports now have to file reports with the European Commission based on the fourth quarter of 2023, according to a press release from PwC Hungary.

Although the previous deadline for mandatory reporting was Jan. 31, users can request a 30-day extension before filing, the press release says.

“The possibility of postponement does not affect the possibility of correcting the report, which can be done until July 31, 2024,” PwC adds.

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Budapest Business Journal | February 9 – February 22, 2024

ESG-compliant features and sustainability accreditation are increasingly the norm in real estate as an essential requirement from tenants and investors and as a regulatory expectation from the EU and national governments.

The 45,000 sqm MG3 warehouse at HelloParks Maglód is the first industrial property in Hungary to achieve the highest Breeam “Outstanding” sustainability rating for New Construction.

GARY J. MORRELL

This applies throughout the development process from planning, permitting and financing to construction, leasing, property and facility management, and an exit strategy with a sale to an investor.

Sustainability issues now impact all market actors to varying degrees at a time when rising costs have been a significant concern for the real estate and propertyrelated industries; ESG could have further pricing implications for the markets, according to analysts.

The direction of the trend is undeniable, however; successful development projects need to be ever more sustainable and ESGcompliant, and older buildings must be brought up to this standard wherever possible.

“Tenants, landlords and investors in all CEE countries are increasingly focusing on the quality of buildings.

The gap between older/outdated and modern/efficient buildings is becoming increasingly wide in terms of a multitude of factors, from rents to attractiveness for tenants and occupancy rates to capital values,” says consultancy Colliers.

“In turn, we view this as a decisive factor in pushing for more retrofitting of older buildings, which may become

viable. Timing-wise [….], the green push is coming in a difficult context for the market, given how high interest rates are. Furthermore, we need to acknowledge how relevant the green characteristics are on the financing side, as banks need to take into account not just the value of the building itself, but how efficient and future-proof it is,” the agency adds.

The environmental aspect is becoming more important for tenants, which is why Atenor Hungary has started signing “green leases” in its developments, comments Máté Galambos, leasing director at the developer.

Mindful Tenants

“While we [….] are always trying to find new ways of decreasing our carbon footprint and we include lots of green solutions in our standard office fit-out specifications, tenants have also started to be mindful about technical features that affect energy consumption, which is a great sign,” he confirms.

“Sustainability efforts have emerged more rapidly following the energy crisis, through which tenants started focusing more on maintenance and utility costs, which was not the case before, so I guess in every bad, there is good,” Galambos adds.

Continued on page 16 ›››

INSIDE VIEW

Fiduciary Asset Management: Don’t Repent at Leisure From Work Done in Haste Dr. Levente Antal Szabó Partner LeitnerLaw Ügyvédi Iroda

2023 was all about fiduciary asset management (family trusts or family foundations) in the lives of Hungarian businessowning families. Because the legislature abolished an old option to reevaluate businesses and enjoy tax benefits, fear of change prompted many to take immediate action. That could leave many legal questions open, which should be looked at now.

The primary purpose of fiduciary asset management is to keep family assets together. Thus, it can counteract the legal system of inheritance, which would fundamentally lead to fragmentation. The problem is similar to the historical dilemma of the Hungarian middle classes, when inheritance fragmented the family estate, turning the Hungarian middle classes into the gentry and making them penniless in the 19th century.

Fiduciary asset management is primarily a means of inheritance, not taxation. The entrepreneurial family can set up its own inheritance system, fine-tune payments from the family estate to the extended family or critical employees or fiduciaries, or decide to keep the wealth behind a glass wall from future generations; by keeping it intact, it can lay the foundations for the well-being of the third or subsequent generations.

All this needs strategic thinking.

For example, a decision is required regarding whether to keep the family estate together and why. Or, for example, how much should be taken out of the jointly-owned wealth on a regular basis? What share should go to the family member who works or does not work in the business?

What share should be invested in new projects or business lines?

Do they support the next generation’s attempts to try things? And so on.

What we are seeing is that the fiduciary asset management structures set up hastily in the summer of 2023 lack these strategic choices. Moreover, because fiduciary asset management was primarily created by the unilateral decision of the founders, stakeholders and family members were often not even appropriately consulted.

Review Retrospectively

This can lead to serious litigation afterward, as the legal heirs have rights that can prevent the founders’ will from being implemented. It would have been vital, for example, to consider compulsory portions (so-called force heirship) and the share of property created as marital community property.

Fortunately, the main inheritance risks can be reviewed retrospectively, and mistakes made in haste can be corrected. Last but not least, fiduciary asset management deeds should be reflected in wills.

It is also often seen that the principles of asset management and beneficiary payments set out in fiduciary contracts are not in line with the provisions of articles of associations of family-owned companies. It is also important to include appropriate restrictions in the corporate documents; for example, making the sale of the company subject to the approval of the company’s general meeting/founder or stipulating that no approval can be given for the acquisition of property by persons outside the family. In the company deeds, property acquisition by spouses of later generations or certain persons may be precluded. Of course, it is also worthwhile regulating, for example, redemption or company valuation rules to avoid subsequent disputes.

Family trusts can only work as a system. So, let’s now sit back and do the coordination work if we didn’t do it last summer. And if you are about to set up a new trust, turn to a team that offers high-quality advice not only in fiduciary asset management but also in the worlds of succession, company law, matrimonial property law and taxation.

On Feb. 1, 2024, the law firm LeitnerLaw Szabó & Partners was established, which will work in close cooperation with the 30-year-old LeitnerLeitner, a tax, accounting consultancy and audit firm. As a result, LeitnerLeitner and LeitnerLaw clients will have access to all services related to economic and business matters in-house in the future.

The founder of LeitnerLaw Szabó & Partners Law Office has supported his clients with advice in various areas of international business law for more than two decades. In recent years, their work as attorneys has focused on family businesses, corporate transactions and competition law. LeitnerLaw will continue to focus on these areas and also welcomes client inquiries on tax, criminal and procedural law matters.

www.leitnerleitner.com

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Sustainability Increasingly Part of the Commercial Real Estate Investment Cycle

Special Report | 15

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Continued from page 15 ›››

planning stages. Therefore, these elements must be adopted from the early design stages to ensure smoother and more cost-effective integration and compliance.

By applying the Well accreditation system, which is dedicated to interiors, organizations can measure and improve their health performance across multiple locations.

Views differ regarding the definition and application of the various elements of ESG. “I think we have to add to our sustainability certification vocabulary one or two more certifications or verifications; the EU Taxonomy verification is more and more requested by the financial institutes or the Impact on People investors, as this verification is about “Using our robust set of Well sustainable business activities and features and our proven process, this is needed if beneficial financial organizations can map, measure or investment conditions are applied and quantify their health to a project or portfolio,” comments and well-being efforts,” argues Zsombor Barta, a sustainability the architect and green assessor, assessor and ambassador (and former Regina Kurucz. “With this data, president) of the Hungarian Green they can measure their impact Building Council. on people while also comparing “As ESG is also a hot topic, certifications that support the ‘S’ (Social) their progress internally and against industry peers, from part of the ESG screening and data provision will also gain importance, such an accountability perspective.”

Sustainability accreditation is as Access4You certification, a system already the norm in office development that certifies the overall accessibility of and is increasingly becoming so in the built environment,” he notes. the industrial sector, with developers “In the end, we need more thirdand park operators building party verified data for ESG or other more highly specified Breeamsustainability reports because and Leed-accredited complexes. credibility and transparency are ESG-compliant buildings extremely important parts of these command higher rents and new reporting schemes or investment returns on investment. The requirements,” Barta adds.

45,000 sqm MG3 warehouse ESG, sustainability and the at HelloParks Maglód, on the EU Taxonomy are often raised eastern outskirts of Budapest, as new requirements at the

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Budapest Business Journal | February 9 – February 22, 2024

is the first industrial property in Hungary to achieve the highest Breeam “Outstanding” sustainability rating for New Construction.

2028 and ensure a 100% renewable energy supply, the developer says.

“The real estate sector is the biggest energy consumer in the EU; hence, it carries a significant responsibility to fulfill climate neutrality criteria,” says Anna Bencze, head of sustainability at HelloParks.

“Such an achievement calls for a substantial reform of current practices, which we have perceived as a promising opportunity from the beginning. The industry must anticipate forthcoming scenarios that would satisfy the interests of the environment, local communities and businesses alike.

Our explicit goal is to motivate the entire industry through our ambitious targets,” she adds.

With more education and pressure from banks, tenants and investors, landlords will realize the need to comply with the EU Taxonomy and that spending on ESG compliance is not only a cost but also a highly profitable investment, argues Hubert Abt, CEO at New Work and Workcloud24 AG. “In today’s landscape, investors are using ESG as a screening method for choosing where to invest. Properties which do not have any ESG efforts or activities are passed over for projects that are dedicated to ESG and which incorporate sustainable practices into their concept,” he adds.

“Sustainability efforts have emerged more rapidly following the energy crisis, through which tenants started focusing more on maintenance and utility costs, which was not the case before, so I guess in every bad, there is good.”

HelloParks says embodied carbon emissions for new buildings will be reduced by 25% from 2025 and 50% from 2030 compared to the developer’s earlier buildings, which already meet levels similar to Western European developments.

In addition, each facility will have an average solar capacity of 2.5 MW installed. The goal is to achieve netzero emissions for the operational carbon footprint of new buildings by

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The Strategic Role of OPTEN ESG Solutions in Domestic SME Sector

BBJ STAFF

Companies subject to the new regulations, especially large exchangelisted companies and players in the financial sector (and, indirectly,

Carbon Calculations Photo by M Isolation photo / Shutterstock.com

The Hungarian ESG regulations that entered into force on Jan. 1, 2024, will bring significant changes to the Hungarian corporate sector, creating both challenges and opportunities. OPTEN, which has been the market leader and a critical player in the company information sector in Hungary for more than 25 years, is on hand to help.

to these companies, lack both and are, therefore, particularly open to solutions that will help facilitate their work.

their suppliers, the vast majority of which are small- and medium-sized enterprises), will have to adapt to the new requirements. Many new acronyms will have to be learned by company managers if they are not to hear them for the first time in an important meeting.

OPTEN’s ESG service offers a solution at this critical time, supporting businesses in the process

of transition and regulatory compliance.

The unique benefits and innovative features of the service can be of particular benefit to the SME sector, where firms often lack the expertise or the human resources to tackle the issues themselves.

Large companies, by and large, have the knowledge and staff to allow them to collect the data required by law. SMEs, which make up the majority of suppliers

For them, OPTEN’s ESG system could prove particularly useful. For example, the system automatically calculates carbon emissions from utility service data. However, access to that information can also be managed by proxy, both through accessing energy supplier data and billing data.

Overall, ESG regulations present a significant challenge but also a massive opportunity for the SME sector. Early adaptation and a proactive approach could prove crucial to future success.

It may seem like a task that can be put off at the moment, but it is worth considering the HR, PR, sales and marketing benefits that it could bring to a company.

Furthermore, large companies already affected by ESG legislation increasingly demand much greater transparency from their suppliers. Thus, it is clear that companies that actively address and prioritize ESG and sustainability issues will find themselves in a much better position to win supplier tenders.

If you feel that your business has outgrown the domestic market and you want to compete internationally, OPTEN has a tool to help you find business partners in 27 countries across Europe. Visit opten.eu for more.

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Trending in Hungary: Could AI Help Smooth the way for ESG Reporting?

With constant changes within Hungarian sustainability reporting requirements and advanced expectations from affected companies, consulting professionals across Budapest discuss the future of artificial intelligence within the area of ESG reporting and overarching trends across the European Union.

LUCA ALBERT

As the expectations for ESG reports grow and there is a demand for ever more aspects to be considered, the use of artificial intelligence as a tool to boost efficiency in ESG reporting is a developing conversation for affected companies.

“As of right now, due to the published legal requirements, the typical approach to preparing ESG reports is just to ‘get it done.’

Under any circumstances, the report should be prepared without sparing time and resources,” says Julianna Nagy, senior manager and head of ESG and climate change services at KPMG Hungary.

“During the first attempt, everyone involved will see this is not a viable path; the work is much bigger than anticipated.

For this reason, the use of digital solutions becomes inevitable over time in terms of the manageability of the process, the turnaround time of reporting and the quality of the report,” she adds.

Nagy accepts that “The collection and production of sustainability data is in its infancy.” According to Ákos Lukács, head of climate change and sustainability services at EY, that may be one of the leading limitations to the effective use of artificial intelligence.

Data Availability

Special Report | 17 Reporting Directive (CSRD) by the Council of Europe and the ESG Act by the Hungarian Parliament, it seems clear that policymakers want to divide attention and resources equally amongst all three areas of ESG. “European institutions are constantly paying a lot of attention to strengthening environmental protection legislation, including last year’s increase in energy efficiency targets, first by the European Union and then domestically,” EY’s Lukács shares.

“The support of social target groups also receives constant attention, especially with the focus on the workforce and local communities.

The reform of corporate governance systems is also constantly on the agenda, such as by introducing systems for reporting abuse or by strengthening the stock exchange’s responsible governance,” he explains.

“It is unrealistic to expect that a company’s very first ESG report should be fully integrated and automated.

Companies must be guided step by step along the path to smooth ESG data management and reporting, where the resulting report is only the tip of the iceberg The hope is that AI can evolve quickly to help facilitate the production of ESG reports. and is built from quite a few Image by Boy Anthony / Shutterstock.com. building blocks. Artificial intelligence will certainly and reporting, where the resulting play a role in this over time.”

“The first problem in the case of sustainability reports is the availability of data, for which companies must devote serious work and resources,” Lukács notes.

“In certain areas, artificial intelligence can be of great help in aggregating and automating existing data and in creating benchmarks in the event of data gaps, but the quality of the data, which cannot be created by automation alone, must not fall victim to this; additional tasks must be performed for this,” he warns.

Although professionals agree that the automation of data collecting and reporting is right around the corner in relation to sustainability practices, there are still reservations about its development.

“The use of digital solutions, automation and artificial intelligence is, for the time being, decisive.

Although the growing interest is palpable, technological investments are being put on hold for the time being, but this may change as the value chain becomes more focused,” explains Réka Szücs, sustainability service line leader at Deloitte.

“It is unrealistic to expect that a company’s very first ESG report should be fully integrated and automated,” cautions Nagy of KPMG. “Companies must be guided step by step along the path to smooth ESG data management

report is only the tip of the iceberg and is built from quite a few building blocks.

Artificial intelligence will certainly play a role in this over time,” she adds.

Equal Attention

In terms of overall trends, it is evident that most of the recent initiatives from European organizations have been centered around environmental aspects, especially with the overarching aim of the EU Green Deal to create a carbon-neutral European Union by 2050. However, with the enactment of the Corporate Sustainability

“In turn, Hungary created a national ESG framework, under the focus of which environmental, social, and governance areas can begin serious development,” Lukács concludes.

The combination of new initiatives within the European Union and the increasingly meticulous expectations from companies point to a more transparent and efficient sustainability reporting system in the near future for Hungary and the rest of the European Union.

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Budapest Business Journal | February 9 – February 22, 2024

Largest Companies Issuing Non-financial Reports (1)

1

aLteo eNeRgIaszoLgáLtató NyRt. www.alteo.hu

7

2

audI huNgaRIa zRt. www.audi.hu

3

bombaRdIeR tRaNspoRtatIoN huNgaRy kft. www.transportation.bombardier.hu

7

4

boRsodChem zRt. www.borsodchem-hu.com

5

20

yeaR of fIRst RepoRt

type of most ReCeNt RepoRt, yeaR of Issue

2017

Integrated report, 2023

2000

Environmental declaration, 2022

appLIed fRameWoRk of most ReCeNt RepoRt

GRI Standards Core

EMAS

autheNtICatIoN of most ReCeNt RepoRt

Deloitte

Zsombor Ferjancsik

yeaR estabLIshed

CompaNy WebsIte

No. of pubLIshed RepoRts

RaNk

In alphabetical order

oWNeRshIp (%) huNgaRIaN NoN-huNgaRIaN

top LoCaL exeCutIve Cfo maRketINg dIReCtoR

addRess phoNe emaIL

2008

Individuals (100) –

attila László Chikán, ferenc karvalits – –

1033 Budapest, Kórház utca 6-12.

(1) 236-8050 info@alteo.hu

1993

– Audi AG (100)

michael breme, zoltán péter Les, Robert buttenhauser, patrick heinecke, kinga Németh – –

9027 Győr, Audi Hungária út 1.

(96) 661-000 ah@audi.hu

Laveyne dominiek august, péter tibor, volodymyr matenchuk – –

1052 Budapest, Deák Ferenc tér 3.

(27) 542-100 info@hu.transport. bombardier.com

2013

Environmental declaration, 2019

EMAS

Zsombor Ferjancsik

1996

– Bombardier Transportation (Investments) Spain S.L.U. (100)

3

2017

Sustainability report, 2021

GRI Core

Judit Juranics

1991

– Mount Tai Chemical Holding Company S.á r.l. (100)

László kruppa – –

3700 Kazincbarcika, Bolyai tér 1.

(48) 511-211 bc@borsodchem.eu

boRsodI söRgyáR kft. www.borsodisorgyar.hu

5

2019

Sustainability report, 2023

Non GRI

Not authenticated

1973

– Molson Coors Netherlands B.V. (100)

zsolt antal vuleta – –

3574 Bőcs, Rákóczi utca 81.

(46) 529-600 –

6

budapestI közLekedésI zRt. www.bkv.hu

3

2020

Environmental declaration, 2022

EMAS

Zsombor Ferjancsik

1967

– –

miklós László kamarás – –

1980 Budapest, Akácfa utca 15.

(1) 461-6500 bkvzrt@bkv.hu

7

büChL huNgáRIa kft. www.buechl.hu

10

2007

Environmental declaration, 2023

EMAS

Zsombor Ferjancsik

2001

– Brima Holding GmbH (100)

sándor gyökeres – –

9027 Győr, Csörgőfa fasor 8.

(96) 516-620 info@buechl.hu

8

CIb baNk zRt. www.cib.hu

16

2005

Integrated report, 2023

GRI Standards (2021) ’in accordance’

Not authenticated

1979

– Intesa Sanpaolo S.p.A. (100)

pál simák – –

1027 Budapest, Medve utca 4–14.

(1) 423-1000 cib@cib.hu

9

CoCa-CoLa hbC magyaRoRszág kft. www.coca-cola.hu

13

2007

Sustainability report, 2022

GRI with reference

Not authenticated

1993

10

dReheR söRgyáRak zRt. www.dreherzrt.hu

8

2010

Sustainability report, 2022

Non GRI

Not authenticated

1854

– Asahi Breweries Europe Ltd. (100)

gábor békefi – –

1106 Budapest, Dreher Antal út 3.

(1) 432-9700 ugyfelszolgalat@asahibeer.hu

11

foxpost zRt. www.foxpost.hu

2

2021

Sustainability report, 2022

GRI Core

Not authenticated

2014

Individuals (100) –

ádám bengyel – –

3300 Eger, Maklári út 119.

(1) 999-0369 info@foxpost.hu

12

fémaLk zRt. www.femalk.hu

4

2019

Sustainability report, 2023

Non GRI

Not authenticated

2002

József Sándor (100) –

karlheinz braisch – –

1211 Budapest, Öntöde utca 2–12.

(1) 815-0900 femalk@femalk.hu

13

főváRosI CsatoRNázásI művek zRt. www.fcsm.hu

10

2013

Environmental declaration, 2022

EMAS

Imre László Biczó

1993

Budapest Municipality (100) –

györgy palkó – –

1087 Budapest, Asztalos Sándor utca 4.

(1) 455-4100 center@fcsm.hu

14

ge huNgaRy kft. www.ge.com

4

2016

CSR report, 2019

Non GRI

Not authenticated

2003

– László István békefi CC Beverages – Holdings II B.V. (100) –

zoltán gábor GE Infrastructure horváth, Hungary Holding Kft. zoltán simon győrfi, (100) miklós zoltán bogár – – –

2330 Dunaharaszti, Némedi út 104.

(24) 500-500 fogyasztok@coca-cola.hu

1138 Budapest, Bence utca 1.

(1) 237-6800 –

3

www.bbj.hu

15

gRuNdfos magyaRoRszág gyáRtó kft. www.grundfos.hu

16

gRáNIt baNk zRt. www.granitbank.hu

17

hambuRgeR huNgáRIa kft. www.hamburger-hungaria.com

18

yeaR of fIRst RepoRt

type of most ReCeNt RepoRt, yeaR of Issue

appLIed fRameWoRk of most ReCeNt RepoRt

autheNtICatIoN of most ReCeNt RepoRt

5

2010

Sustainability report, 2016

GRI G4 core

Not authenticated

2021

Sustainability report, 2022

4

heINekeN huNgáRIa zRt. www.heinekenhungaria.hu

19

2

Special Report | 19

yeaR estabLIshed

CompaNy WebsIte

No. of pubLIshed RepoRts

RaNk

Budapest Business Journal | February 9 – February 22, 2024

oWNeRshIp (%) huNgaRIaN NoN-huNgaRIaN

top LoCaL exeCutIve Cfo maRketINg dIReCtoR

addRess phoNe emaIL

1999

– GRUNDFOS A/S (100)

Csaba udvar – –

2800 Tatabánya, Búzavirág utca 14.

(34) 520-100 –

1985

Pannónia Nyugdíjpénztár (7.20), TiberisDigital Kft. (44.80), employees (36), MKB Nyugdíjpénztár (5.50), other (6.50) –

éva hegedűs – –

1095 Budapest, Lechner Ödön fasor 8.

(1) 235-5900 info@granitbank.hu

attila bencs – –

2401 Dunaújváros, Papírgyári út 42–46.

(25) 557-702 office@ hamburger-hungaria.com

GRI with reference

Not authenticated

2018

Environmental declaration, 2023

EMAS

Katalin File Moravcsikné (ÉM-TÜV SÜD Kft.)

2005

– W. Hamburger GmbH (100)

11

2010

Sustainability report, 2022

Non GRI

Not authenticated

1991

– Heineken International B.V (100)

Nikos zois – –

9400 Sopron, Vándor Sándor út 1.

(99) 516-100 info@heineken.hu

heLL eNeRgy magyaRoRszág kft. www.hellenergy.hu

3

2019

Sustainability report, 2022

GRI Core

Not authenticated

2004

HELL Group Holding Kft. (100) –

barnaba Csereklye – –

1062 Budapest, Andrássy út 126.

(20) 216-2898 info@hellenergy.hu

20

hIdRofILt kft. https://hidrofilt.com/hu

2

2021

Sustainability report, 2023

Non GRI

Not authenticated

1990

Individuals (100) –

krisztina borsos, györgy papócsi – –

8800 Nagykanizsa, Magyar utca 191.

(93) 536-500 info@hidrofilt.hu

21

hIpp teRmeLő és keReskedeLmI kft. www.hipp.hu

3

2019

Environmental declaration, 2022

EMAS

Imre László Biczó

1991

– Hipp Beteiligungs AG (100)

Csaba bódi – –

9167 Hanságliget, Hipp utca 1.

(96) 563-010 –

22

Ikea LakbeReNdezésI kft. www.ikea.hu

3

2020

Sustainability report, 2023

GRI with reference

Not authenticated

1991

– INGKA Holding Europe B.V. (99.99), INGKA Pro Holding B.V. (0.01)

Jan váchal – –

1148 Budapest, Örs vezér tere 22.

(1) 460-3100 –

23

k&h baNk zRt. www.kh.hu

17

2007

Sustainability report, 2023

GRI with reference

Not authenticated

1986

– KBC Bank N.V. (100)

guy Libot – –

1095 Budapest, Lechner Ödön fasor 9.

(1) 328-9000 bank@kh.hu

24

kométa 99 zRt. www.kometa.hu

3

2020

Sustainability report, 2022

Non GRI

Not authenticated

2006

Komfin Kft. (76) Ruf-Carni SpA (24)

giacomo pedranzini – –

7400 Kaposvár, Pécsi utca 67–69.

(82) 502-400 kometa@kometa.hu

25

LIdL magyaRoRszág keReskedeLmI bt. www.lidl.hu

2

2020

Sustainability report, 2022

GRI Core

Ernst&Young Kft.

2003

Lidl Holding Kft. (0.01) CE - Beteiliguns GmbH (99.99)

– – –

1037 Budapest, Rádl árok 6.

(1) 346-6000 info@lidl.hu

26

magyaR NemzetI baNk www.mnb.hu

12

2011

Environmental declaration, 2022

EMAS

Zsombor Ferjancsik

–

Hungarian state (100) –

györgy matolcsy – –

1054 Budapest, Szabadság tér 8–9.

(1) 428-2600 info@mnb.hu

27

magyaR posta zRt. www.posta.hu

6

2017

Sustainability report, 2022

GRI Core

Alternate Tanácsadó Kft.

1993

Hungarian state (100) –

barnabás balczó Tibor Szij György Lőrinczy

1138 Budapest, Dunavirág utca 2–6.

(1) 767-8200 ugyfelszolgalat@posta.hu

28

magyaR teLekom NyRt. www.telekom.hu

21

2003

Sustainability report, 2023

GRI Standards (2021) ’in accordance’

PwC

1991

Free float (34.33), own shares (4.28) Deutsche Telekom Europe B.V. (59.21)

tibor Rékasi Daria Dodonova Zoltán Pereszlényi

1097 Budapest, Könyves Kálmán körút 36.

1414 sajto@telekom.hu

29

meRCedes-beNz huNgáRIa kft. www.mercedes-benz.hu

10

2011

Annual report, 2023

Non GRI

KPMG

2004

– Mercedes-Benz AG (100)

fabiola attori – –

1133 Budapest, Váci út 96–98.

(70) 436-1100 internet-hu@daimler.com

30

moL magyaR oLaJ- és gázIpaRI NyRt. www.mol.hu

24

1997

Integrated report, 2023

GRI Standards (2021) ’in accordance’

Ernst&Young

1991

Hungarian State (25.20), other (24.50) Foreign investors (34.80), other (15.50)

zsolt hernádi – –

1117 Budapest, Október huszonharmadika utca 18.

(1) 209-0000 ugyfelszolgalat@mol.hu

31

mvm CsopoRt www.mvm.hu

22

1999

Integrated report, 2023

GRI Standards (2021) ’in accordance’

KÖVET Association

–

MNV Zrt. (99.91) –

károly mátrai – –

1031 Budapest, Szentendrei út 207–209.

(1) 304-2000 mvm@mvm.hu

32

máv CsopoRt www.mavcsoport.hu

4

2008

CSR report, 2017

GRI G4

Not authenticated

–

Hungarian state (100) –

zoltán pafféri – –

1087 Budapest, Könyves Kálmán körút 54–60.

(1) 511-3160 eszrevetel@mav-start.hu

Special Report

www.bbj.hu

CompaNy WebsIte

No. of pubLIshed RepoRts

yeaR of fIRst RepoRt

yeaR estabLIshed

Budapest Business Journal | February 9 – February 22, 2024

RaNk

20 | 3

oWNeRshIp (%) huNgaRIaN NoN-huNgaRIaN

33

NaNushka INteRNatIoNaL zRt. –

2

2021

Sustainability report, 2022

Non GRI

Not authenticated

2012

– Nanushka Holdings s. á r.l. (100)

szandra sándor – –

1122 Budapest, Városmajor utca 12–14.

(1) 202-1050 –

34

NestLé huNgáRIa kft. www.nestle.hu

12

2008

Sustainability report, 2023

Non GRI

Not authenticated

1991

– Nestlé S.A. (100)

péter Noszek – –

1095 Budapest, Lechner Ödön fasor 7.

(1) 224-1200 info@hu.nestle.com

35

otp baNk NyRt. www.otpbank.hu

17

2007

Integrated report, 2023,

GRI Standards (2021) ’in accordance’

Deloitte

1949

Investors (40.10) Investors (59.90), other (0.09)

sándor Csányi – –

1051 Budapest, Nádor utca 16.

(1) 473-5000 informacio@otpbank.hu

36

péNzJegyNyomda zRt. www.penzjegynyomda.hu

5

2017

Environmental declaration, 2022

EMAS

Katalin File Moravcsikné (ÉM-TÜV SÜD Kft.)

1925

Magyar Nemzeti Bank (100) –

zsolt László majláth – –

1055 Budapest, Markó utca 13–17.

(1) 332-6900 mails@pjrt.hu

37

pWC magyaRoRszág www.pwc.hu

11

2012

Sustainability report, 2022

GRI Core

Not authenticated

1989

– PwC CEE (100)

tamás Lőcsei, László deák Tamás Pál Borbála Palotai

1055 Budapest, Bajcsy-Zsilinszky út 78.

(1) 461-9100 hu_info@pwc.com

38

QuaLIfoRm zRt. www.qualiform.hu

2

2021

Sustainability report, 2022

Non GRI

Not authenticated

2006

Qualital Kft. (100) –

máté hornyik – –

3032 Apc, Vasút út 1.

(37) 385-466 info@qualiform.hu

39

RIChteR gedeoN NyRt. www.richter.hu

9

2007

Sustainability report, 2022

GRI Standards Core

Not authenticated

1901

(33) (67)

gábor orbán – –

1103 Budapest, Gyömrői út 19–21.

(1) 431-4000 posta@richter.hu

40

samsoNIte-huNgáRIa bőRöNd kft. www.samsonite.hu

6

2011

Sustainability report, 2018

Non GRI

Not authenticated

1989

– Samsonite Europe N.V. (100)

Imre pesti – –

7100 Szekszárd, Keselyűsi út 5.

(74) 412-033 info.hungary@samsonite.com

41

saNofI-aveNtIs magyaRoRszág keReskedeLmI zRt. www.sanofi.hu

1996

Chinoin Zrt. (100) –

tamás géza Rónay, gabriella pólya dobáné, andrás ákos vargha – –

1045 Budapest, Tó utca 1–5.

(1) 505-0050 kapcsolat@sanofi.com

42

sChaeffLeR savaRIa kft. www.schaeffler.hu

1996

– Schaeffler Bühl Auslandsholding GmbH (100)

attila gáspár, tibor szigeti – –

9700 Szombathely, Zanati út 31.

(94) 588-100 info.schaeffler.savaria@ schaeffler.com

43

szeReNCseJáték zRt. www.szerencsejatek.hu

1990

Hungarian state (100) –

andrea mager – –

1015 Budapest, Csalogány utca 30–32.

(1) 201-0580 ugyfelszolgalat@ szerencsejatek.hu

44

tesCo-gLobaL áRuházak zRt. www.tesco.hu

1989

– Tesco Holdings B.V. (100)

zsolt pálinkás – –

2040 Budaörs, Kinizsi út 1–3.

(20) 827-0000 tescoglobalzrt@ hu.tesco-europe.com

1989

– Tetra Laval International SA (100)

guillaume Claude guy marie Latourrette, José maria vicenti Chamón, Julija Jurevna Jakovleva – –

2041 Budaörs, Légimentő utca 6.

(23) 418-000 –

László blénessy Csaba Thurzó Hajnalka Mester

1112 Budapest, Boldizsár utca 2.

(70) 700-1270 sajto@vodafone.com

6

8

5

6

45

tetRa pak CsomagoLóaNyag gyáRtó zRt. www.tetrapak.hu

46

vodafoNe magyaRoRszág zRt. www.vodafone.hu

47

type of most ReCeNt RepoRt, yeaR of Issue

appLIed fRameWoRk of most ReCeNt RepoRt

autheNtICatIoN of most ReCeNt RepoRt

2010

Company brochure, 2022

2008

Environmental declaration, 2022

2011

Sustainability report, 2022

2009

Community strategy, 2020

Non GRI

EMAS

GRI Core

Non GRI

Not authenticated

Dipl.-Phys. R. Mirz

Not authenticated

Not authenticated

addRess phoNe emaIL

2015

Environmental declaration, 2022

10

2008

Sustainability report, 2018

Non GRI

Not authenticated

1999

Antenna Hungária Zrt. (51), Corvinus Nemzetközi Befektetési Zrt. (49) –

yetteL magyaRoRszág zRt. www.yettel.hu

9

2007

Sustainability report, 2022

GRI Core

Not authenticated

1993

Corvinus Zrt. (25) PPF Group (75)

Igor prerovsky József Takács Nemanja Zilovic

2045 Törökbálint, Pannon út 1.

(20) 200-0000 –

48

zoLtek zRt. www.zoltek.com

5

2017

Environmental declaration, 2021

EMAS

Lloyd's Register EMEA

1941

– Zoltek Comp Inc. (100)

ando Nobuya – –

2537 Nyergesújfalu, Varga József tér 1.

(33) 536-000 europe-sales@zoltek.com

49

zWaCk uNICum NyRt. www.zwackunicum.hu

5

2014

Sustainability report, 2023

GRI Standards (2021) ’in accordance’

Not authenticated

1992

– Peter Zwack & Consorten Handels AG (100)

frank odzuck, tibor dörnyei – –

1095 Budapest, Soroksári út 26.

(1) 476-2300 recipar@zwackunicum.hu

6

EMAS

Katalin File Moravcsikné (ÉM-TÜV SÜD Kft.)

top LoCaL exeCutIve Cfo maRketINg dIReCtoR

Notes: (1) List prepared using the database of Denkstatt Hungary Kft. www.sustainability.hu

A = would not disclose,

NR = not ranked, NA = not appliacable

This list was compiled from responses to questionnaires received by February 7, 2024, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

The list is based on companies’ voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14, or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

4

www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Socialite

GZÏ Art Gallery Bringing Splash of Color and French Elegance to Budapest Open for a year, Benjamin DréanGuénaïzia’s GZÏ Art Gallery in District VI is livening up the Budapest art scene with its French connections.

DAVID HOLZER

Dréan-Guénaïzia was born into the art world. He is the son of painter Myriam Guénaïzia, who the gallery represents.

Growing up in Brittany, he went every week to the town of Pont-Aven where his mother has had her own gallery for the past 40 years. With more than 60 art galleries and just 3,000 citizens, Pont-Aven is known all over France as “the city of painters.”

Pont-Aven’s connection with art really began with French painter Paul Gauguin. He first came to the town in the spring of 1886, attracted by its beauty, the surrounding landscape and the fact that he could live there cheaply.

Gauguin returned to Pont-Aven in 1888 after adventures in Panama and Martinique that introduced him to the exotic first-hand and so decisively shaped his art.

During his second visit, Gauguin connected with young artists such as Emile Bernard with whom he developed the style of Synthetism, which characterized the Pont-Aven School. Among other elements, Synthetism promoted using pure color.

A bold use of bright colors also characterizes the work of all the artists GZÏ showcases and the space itself.

“I do love colors,” Dréan-Guénaïzia says. “It comes from childhood.

The house I grew up in was like a museum with white walls filled with colorful artworks made by my mother and the artists she collected over the years. I was surrounded by color [from] dawn to dusk. It’s not surprising color is so important to me.”

In their own ways, all the artists Dréan-Guénaïzia represents are equally committed to color, whether

with many exciting young artists as well as those that are more established.”

Besides supporting Hungarian talent, Dréan-Guénaïzia is keen to build a cultural bridge between Hungary and France. This begins with the artists themselves.

“Some of them I knew before opening the gallery, some were new to me.

But I make a point of getting to know all of them. For me, it’s important not just to have good art that I like but also to know the artists, for us to have a good connection. Because I always put the artist first, I focus on developing natural and transparent communication with them. I’m always open about what does and doesn’t work in different markets.”

Although Dréan-Guénaïzia didn’t speak Hungarian and had to search to find GZÏ’s location, things went pretty smoothly thanks to the help of his Hungarian friends. Now, it’s about attracting visitors to the gallery and promoting awareness of the artists.

“The house I grew up in was like a museum with white walls filled with Benjamin Dréan-Guénaïzia at an event in his colorful artworks made by gallery. Image by Peter Szvoboda Photography. my mother and the artists she collected over the ago and loved its beauty, the architecture, this is the supremely vibrant the Danube, and the surrounding nature. years. I was surrounded by palette of his mother or the dazzling I’d also made friends here. So, when work of Hungarian Eugene Igor color [from] dawn to dusk.

I was choosing where to live and work, Prokop and Turk Volkan Coban.

It’s not surprising color I thought, ‘Why not Budapest?’ I’d Brought by Go always loved Budapest as a tourist [and] is so important to me.”

I never think of Budapest itself is especially colorful. I wondered how Dréan-Guénaïzia came to the city and what makes him feel at home here.

Strangely enough, it was the ancient strategic board game Go, which he has been playing since he was a child.

It involves two players, with the goal to surround more territory than your opponent. Invented in China over 2,500 years ago, according to Britannica. com, it is probably the world’s oldest board game.

In 2022, Dréan-Guénaïzia won the European Championship grand prize at the Go Congress in Romania.

According to an account of the final game of the championship by Matt Partridge, Dréan-Guénaïzia showed “great fortitude […] complicating the game and taking a large number of points in the center.”

“I’ve played all over Europe and Asia, including many times in Budapest over the years and made many friends here,” Dréan-Guénaïzia explains.

“I was living in Seoul, South Korea, but decided to come back to Europe. I first came to Budapest around seven years

had friends here, so I wasn’t alone.”

Dréan-Guénaïzia has lived in the city for more than two years and says he is happy here.

“There are more than 20 million people in Seoul and only around 1.9 million in Budapest. It’s big enough to have a very active cultural and social scene – there’s always something to do – but small enough that I can sometimes feel like I’m in a village. I live in District VII and can walk everywhere I want to go. The people are very friendly but not overwhelming. When I want to travel, there’s a great airport, and I can go anywhere I want. It feels like I have a really good work-life balance.”

A Gallery Years in the Making With Dréan-Guénaïzia’s background, it’s not especially surprising that he chose to open a gallery, although it’s been years in the making.

“I enjoy finding new talents or helping develop established ones,” he says.

“Budapest struck me as the perfect place to do so. It’s culturally rich

“I love the Embassy District, and we’re in a nice building,” Dréan-Guénaïzia says. “It gives the gallery a private, cozy vibe. But this is not a touristy area, so we have to find ways to bring people in.”

To do so, Dréan-Guénaïzia is holding events emphasizing the French-Hungarian connection and promoting French culture here. He had a champagne tasting at the gallery in November. February kicked off with an event involving the Le Troquet wine bar.

“The idea is to bring art, people and music together,” Dréan-Guénaïzia says, “I’m keen to partner with hotels, restaurants and companies looking to hold corporate events with a difference.”

The gallery is open every Wednesday, Thursday and Friday from 6-8 p.m. At other times, it is open on demand. Find out more at www.gziarts.com.

22 | 4

Socialite

www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Van Gogh’s World Reimagined in Immersive Exhibition

Culture Matters A regular look at culture issues in Hungar y and the region

The BOK Sportshall is hosting a groundbreaking exhibition, “Van Gogh: The Immersive Experience,” marking an innovative approach to art presentation.

The show has transformed a 2,000 sqm space into a vibrant canvas that brings Vincent van Gogh’s world to life, merging his timeless artistry with avant-garde technology.

GERGELY HERPAI

Attracting a wide array of visitors, from art connoisseurs to digital natives active on platforms like Instagram and TikTok, the exhibition, which opened on Feb. 2, offers a unique opportunity to interact with art in a dynamic, immersive environment, the organizers say.

By blending van Gogh’s iconic paintings with multimedia elements, the showcase creates a 360-degree visual spectacle.

The use of virtual reality goggles stands out as a central innovation, allowing attendees to step into the scenes of Van Gogh’s most famous works. This immersive journey includes visits to “The Yellow House,” “The Night Café,” and tranquil wheat fields. The exhibition aims to transform the viewer from a passive observer to an active participant in the art experience.

The exhibition is organized into three segments, each enriching the visitor’s understanding of van Gogh’s life and artistic evolution. The first offers a deep dive into the artist’s biography, exploring his personal relationships, theories on color, and the development of his creative vision.

Beyond the visual engagement, the exhibition employs multimedia storytelling. For example, a segment dedicated to “Starry Night” explores van Gogh’s use of color, influenced by his color blindness. This enriches the audience’s perception of his vibrant palette, offering a deeper appreciation of his artistry.

The immersive room, where van Gogh’s paintings envelop every surface, creates a dynamic environment that has become a focal point for attendees. This space offers endless opportunities for visitors to capture and share their experiences.

Color and Show

Another interactive section invites visitors to colorize van Gogh’s sketches, which are projected onto the walls, transforming them into animated, complex pieces.

The VR experience further delves into the inspiration behind eight of Van Gogh’s iconic paintings, providing an intimate look at his creative process.

The exhibition’s innovative approach to presenting van Gogh’s work has received global acclaim. According to its website, the show was “ranked among the 12 best immersive experiences in the world by CNN.” Dudi Bercovici, managing director of organizer Hadran Events, emphasizes the transformative nature of the presentation.

“We break away from traditional frameworks to present van Gogh’s world in a groundbreaking manner. With the aid of technological tools, we animate the Dutch master’s most renowned artworks, offering a 21st-century multimedia experience,” he explains.

“We understand and cater to the preferences of today’s generation, acknowledging that the fast-paced world has forged new cultural consumption habits,” he adds. He says he is confident the show will bring art closer to the youth.

Having attracted over 20 million visitors globally, including the cities of New York, London, Berlin, and Seoul, the exhibition underscores the growing interest in immersive art experiences. It offers a new way of engaging with classical art, making it more interactive, accessible, and enjoyable for a broad audience.

Future of Exhibitions

The show offers a glimpse into the future of art exhibitions and cultural experiences, challenging traditional notions of engagement and opening new pathways for interacting with art. It provides an

unparalleled opportunity to explore one of history’s most fascinating artists through a modern lens. It invites visitors to see the world through the eyes of van Gogh.

Its interactive approach not only deepens an understanding of van Gogh’s techniques but also makes art more accessible to people of all ages.

Educational workshops and guided tours further enhance the visitor experience, offering deeper insights into the artist’s life and profound influence on the art world.

One of the critical discussions surrounding “Van Gogh: The Immersive Experience” has been its approach to democratizing art. By requiring an additional fee for specific segments like the VR experience, the exhibition raises questions about the accessibility of immersive art experiences.

However, this model also reflects the financial realities of creating such a technologically advanced showcase. The dialogue it has sparked among visitors and critics contributes to broader conversations about how art is consumed, valued, and made available to the public in the digital age.

BOK Sportshall is at Ifjúság útja 1-3, in Pest’s District XIV, and is easily accessed via the Puskás Ferenc Stadion metro stop on the M2 line.

It runs until Sep. 1. The exhibition has a complicated pricing structure.

On weekdays from 10 a.m.-2 p.m., an adult ticket costs HUF 6,500.

From 2-6 p.m., it is HUF 6,000.

The same “morning” ticket on weekends is HUF 7,500, dropping to HUF 7,000 in the afternoon. For more details, visit the English-language website at vangoghbudapest.hu/en/.

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www.bbj.hu

Budapest Business Journal | February 9 – February 22, 2024

Chamber of Commerce Corner

This regular section of the Budapest Business Journal features news and events from various international business chambers. For further information and to register for specific events, visit the organizing chamber’s website. If you have information for inclusion on this page, send an email in English to Annamária Bálint at annamaria.balint@bbj.hu

Swiss-Hungarian Chamber of Commerce (SwissCham)

American Chamber of Commerce (AmCham)

Members of SwissCham participated at the January launch event of the LeitnerLeitner Group, attended by clients and employees of the company. The event was opened

by Márta Siklós, partner of LeitnerLeitner Group, with a short introduction, followed by a surprise guest and first speaker, Ákos Péter Bod, professor at Corvinus University, and a former Minister of Industry and Trade and Governor of the National Bank of Hungary, who gave a presentation on the economic outlook for the region and Hungary. Following the presentation, the firm’s new subsidiary, Leitner Law, was introduced. It will provide legal services to the firm’s clients, focusing on mid-sized family businesses in Hungary. Two of the firm’s tax partners then spoke about the importance of employee retention, changes in transfer pricing rules and essential tax changes for 2024. The evening closed with an informal reception, providing valuable networking opportunities. Swisscham will also hold a networking event this month. • When: Feb. 12, 5-7 p.m. • Where: Tokaj Art Wine Galery, Hold utca 21, 1st floor, 1054 Budapest • Fee: free for members, HUF 10,000 for non-members.

AmCham will hold its next HR Dream Day in March, looking deeper into the crucial role of diverse workplaces in increasing competitiveness and cultivating an inspiring and innovative work environment. This year’s spotlight is on generational diversity, a historic milestone where five generations collaborate in the workforce, from seasoned traditionalists to the vibrant Gen-Z. Understanding and harnessing the strength of each generation is vital to driving innovation and a high-performing work environment. Embracing diversity is not merely a matter of social responsibility but also a strategic advantage for businesses and economies. • When: March 21, 2024 • Where: Öbölház, Kopaszi-gát • Fee: Members HUF 39,990 (+ VAT / person); nonmembers: HUF 54,990 (+ VAT / person)

Netherlands-Hungarian Chamber of Commerce (Dutcham) The 2024 Dutcham membership year started on Jan. 31 with the annual members’ meeting, where the board of directors and supervisory board were elected. The annual events calendar will include a wide range of professional and socializing events. Visit our website for the updates www.dutcham.hu

Canadian Chamber of Commerce in Hungary (CCCH) The CCCH invites members and nonmembers to its next business breakfast, looking at how the Hungarian economy will cope with uncertain times, with so much geopolitical tension and 2024 being a global election year? This breakfast will delve into a capital market analysis, featuring a presentation by Tamás Móró, lead strategist at Concorde Értékpapír Zrt., and a roundtable discussion on Hungary’s response to global economic uncertainties. • When: Feb. 14 from 8:30-11 a.m. • Where: Concorde Értékpapír Zrt. Offices, Alkotás u. 55-61, 1123 Budapest • Fee: Members HUF 13,500 (+VAT); non-members HUF 23,500 (+VAT).

Includes breakfast, coffee, and networking.

Belgian Business Club in Hungary (Belgabiz)

Hungarian-French Chamber of Commerce and Industry (CCIFH) Minister for National Economy Márton Nagy was the special guest of the CCIFH for the second time since January last year at the chamber’s opening business lunch. The event generated massive interest among its member companies and the business community of the partner chambers Belgabiz, Joint Venture Association, Swedish Chamber of Commerce in Hungary, and Swisscham. After a welcome from CCIFH president László Károlyi, the minister presented Hungary’s economic perspectives for 2024.

In his introduction, the minister touched on the exemplary economic cooperation between Hungary and France. According to the minister, trade relations are flourishing, and French businesses are an essential building block of the Hungarian economy. France is the fifth largest investor in Hungary, and French companies account for about 6% of the foreign working capital holdings, amounting to EUR 100 billion. Nagy said that between 2016 and 2019, France was the fourth largest investor in Hungary and expressed his hope that France could reach this position again.

The 425 French companies operating in Hungary ensure the livelihood of 41,000 families, and their sales revenue exceeds HUF 3.7 trillion. Parallel to this, Hungarian-French foreign trade relations are also flourishing: France is Hungary’s 10th largest foreign trade partner, with a trade turnover of EUR 10 bln.

Belgabiz and the Swiss-Hungarian Chamber of Commerce (SwissCham) are organizing a networking event titled “Navigating Hungary’s Tax Landscape in 2024.” The professional partner of the event is VGD Hungary, for whom Viktor Szabó, tax and payroll partner, will present the recent changes in the Hungarian taxation system. The presentation will be followed by professional networking and refreshments. The event is open to non-members.

• When: Thursday, Feb. 15, 6-9 p.m. • Where: Courtyard by Marriott Budapest City Center.

German-Hungarian Chamber of Industry and Commerce (DUIHK) The DUIHK kicked off the New Year with an extraordinary event in an exceptional setting. Some 250 guests attended the traditional annual opening evening in Budapest’s Millenáris Park, including the ambassadors of Germany and Hungary, Julia Gross and Péter Györkös, and István Joó, CEO of the Hungarian Investment Promotion Agency.

German-Hungarian economic relations have reached an unprecedentedly high level in recent decades, providing a broad and stable basis for future cooperation. At the same time, however, it became clear that the companies and economies of both countries are facing several significant challenges and uncertainties in global competition. This makes it all the more critical to have continuous, objective and result-oriented discussions between all players, as well as reliable, fair and future-oriented framework conditions on the part of economic policymakers. This was the central message of the evening. Pictures and further information on the DUIHK’s plans for 2024 can be found on our website.

Italian Chamber of Commerce for Hungary (CCIU) The CCIU congratulates its vice president, Sandra Samoggia, who, on Feb. 2, took part in the presentation of the Turrita d’Argento Award together with the Mayor of the City of Bologna. The Friends of the Industrial Heritage Museum Association, for whom she also serves as VP, was honored.

The award recognizes the association’s commitment to enhancing the technical and business culture of the area, which has promoted a virtuous partnership between the public and private sectors, creating a unique synergy between the Industrial Heritage Museum and a network of 72 companies, organizations and trade associations.

Hungarian-Norwegian Chamber of Commerce (HNCC) The HNCC, in collaboration with the Embassy of Hungary in Norway, organized an online Scientist Seminar, known as “Tudós Est,” on Jan. 29. This event series, launched in 2018, aims to present the work of Hungarian scientists, researchers, physicians, and more, who are based in Norway. These presentations are designed to be

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easily understandable, popular, scientific, and concise, with each talk lasting a maximum of 20-30 minutes.

This session offered attendees the chance to enjoy two presentations: Enikő Bali, professor at the Faculty of Earth Sciences, University of Iceland, presented “The Role of Mineral Associations and Fluid Inclusions in Geothermal Research” while Balázs

Badics, a geologist at Wintershall Dea Norway Exploration, Stavanger, discussed “CO2 Capture, Utilization, and Storage (CCUS) in the North Sea: Norway, Denmark, and the United Kingdom.” These lectures provide a unique opportunity for experts and the general public to engage with diverse research topics in an accessible language, fostering a deeper understanding of the subjects covered.

4 000 000 forint állami támogatással(1) elérhető (2) EQA és EQB modellek, akár 1 évre elegendő ajándék töltőkártyával(3)

(1)

Az állami támogatás igénybevételének módját és feltételeit a KÖZÚTI ELEKTROMOS JÁRMŰ BESZERZÉS TÁMOGATÁSA VÁLLALKOZÁSOKNAK támogatásáról szóló RRF-10.10.1-23 pályázat határozza meg. Az igénybevétel feltételeivel kapcsolatos tájékoztatás nem teljes körű, a részletes szabályokat és feltételeket a hivatkozott pályázat tartalmazza. További részleteket a www.palyazat.gov.hu oldalon talál.

(2) A töltőkártya egy egyszeri bruttó 500 000 Ft-os voucher formájában kerül átadásra a gépjármű átvételekor, amely 2024.08.31-ig aktiválható, valamint aktiválást követően 3 éven belül használható fel Európa azon országaiban, ahol elérhető a Mercedes me Charge szolgáltatás. A Mercedes me Charge hálózatán belül elérhető töltőoszlopok listáját az alábbi linken találja: https://eu.charge.mercedes.me/web/hu/daimler-hu/service.

Mindez az éves átlagos futásteljesítmény és átlagos fogyasztás alapján került meghatározásra, az alábbi kalkuláció alapján: 20 000 km (évi átlag) x 25kWh/100km (átlag fogyasztás) x 100 Ft (1 kwh ára a me charge-on).

(3)

A kampány keretében töltőkártyát a 2023. szeptember 30-tól 2024. március 31-ig leadott megrendelések esetén biztosítunk. A kampány kizárólagosan az EQ modellekre vonatkozik. Egy ügyfél számára, illetve megkötött Mercedes me Charge szerződéshez legfeljebb 3 voucher aktiválható (különböző járművek esetében). A voucherrel kapcsolatban érdeklődjön hivatalos Mercedes-Benz kereskedéseinkben! A szolgáltatást a Digital Charging Solutions Gmbh. (DCS) biztosítja.

Az új EQA | kombinált áramfogyasztás: 18,6 – 14,4 kWh/100 km; kombinált CO2-kibocsátás: 0 g/km (WLTP-értékek)(4) Az új EQB | kombinált áramfogyasztás: 19,2 - 15,2 kWh/100 km; kombinált CO2-kibocsátás: 0 g/km (WLTP-értékek)(4) (4)

Az értékek az előírt mérési eljárás szerint, jelen esetben a „WLTP CO2 értékek” a Bizottság (EU) 2017/1153 Végrehajtási rendelete 2. cikke 3. pontjának megfelelően kerültek meghatározásra. Az üzemanyag- fogyasztási értékek kiszámítása ezen értékek alapján történt. Az adatok nem egy adott gépjárműre vonatkoznak, és nem képezik ajánlat részét, hanem kizárólag a különböző gépjárműtípusok egymással való összehasonlítására szolgálnak. Az értékek a kiválasztott extrafelszereltségek függvényében változnak. A kép csak illusztráció.