Budapest Business Journal 3302

ESG All-embracing in Business Sphere

Environmental, Social and Governance, are a set of standards that measure the impact of a business on society and the environment and how transparent and accountable that is. The idea is that this will lead to long-term investments in sustainable business.  11

Hungary’s 1st Mandatory ESG Reports due in 2025

Obligations under Hungary’s ESG Act were phased in from the start of the 2024 financial cycle, with 2025 marking the year for the first mandatory ESG publications for all large, publicly listed enterprises.  15

Brutalist Movement: Architecture, Hype and the Movie

Searching for a deeper connection between Hungary and brutalism led David Holzer to Marcel Breuer, born in Pécs in 1902 to a Jewish family. The furniture and buildings designed by the fictional László Tóth in “The Brutalist” are inspired by Breuer but his character most definitely is not.  16

BÉT Taking Stock of ESG

Industry in Bad Shape, Inflation out of Target

The improvement in Hungary’s industrial performance seen in October turned out to be only temporary, as output fell again in November, both on an annual and monthly basis. 2024’s year-end and annual inflation data have also been released and show room for improvement.  3

István Máté-Tóth, deputy CEO of the Budapest Stock Exchange, tells us how businesses have come to embrace ESG reporting requirements, and how the bourse helps current and future listed firms. 12

2025 Could Be Another Uncertain Year

The economic environment worldwide may remain uncertain in 2025, primarily influenced in the short term by newly inaugurated U.S. President Donald Trump’s trade policies, according to investment firm Equilor.  7

EDITOR-IN-CHIEF: Robin Marshall

EDITORIAL CONTRIBUTORS: Luca Albert, Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Levente Hörömpöli-Tóth, Gary J. Morrell, Nicholas Pongratz.

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THE EDITOR SAYS

ESG, THE PARIS TREATY, AND PLAYING YO-YO

To judge from some of his first executive orders since returning to power as the 47th President of the United States, not to mention plenty of his public utterances, both from his time in office as the 45th President and in the years in between, it seems a safe bet to say that the concept of ESG may not be one Donald J. Trump is overly keen to embrace. His determination to “drill, baby, drill” is diametrically opposed to the European Green Deal. As one of our expert witnesses puts it inside this issue in our Special Report dedicated to ESG, “Actions are moving rapidly in opposite directions on both sides of the Atlantic. […] Business and political stakeholders are seeking clarity and common ground, observing more conservative economic approaches in climate and energy politics, among other areas.”

This is not the first time Trump has pulled the United States out of the Paris Climate Treaty. He announced the same move when he first came to power in 2017, although it didn’t actually come to pass until November 2020. The now former President Joe Biden took the country right back in, signing an executive order to that effect on his first day in office, January 20, 2021. America will be one of just four states not signed up, the others being a trio you would not often expect to be sharing common ground with the States: Libya, Yemen and Iran. Viewed from this side of the Pond, the rise and rise of ESG is impossible to ignore. Indeed, certification

of it has become an essential qualifier for many investors, especially those involved with the real estate industry. Will either Europe or America gain a competitive advantage from their different approaches? Will one persuade the other that it has the right idea? Might more nations walk away from the Paris deal? Should the EU now seek to prioritize American LNG deliveries as an alternative to cheap Russian gas, which is no longer acceptable to many in the wake of the RussoUkraine war? But here’s a thought. Suppose Trump delivers on another of his promises, to end the fullscale invasion Moscow launched on its Western neighbor. Would that suddenly make cheap Russian gas acceptable again, even if Putin used his fossil fuels as a fund to rebuild and reequip his armed forces?

Those are some pretty serious questions, but so is the fact that 2024 was the hottest year on record, and the science doesn’t point to 2025 being markedly cooler. While the United States plays yo-yo with its membership of the climate treaty, the EU appears to be more firmly wedded to its ideals of reducing its greenhouse gas emissions and becoming carbon neutral, a fact that ought to please Hungary, given its increasing dependence on serving the e-mobility markets

Robin Marshall Editor-in-chief

THEN & NOW

Photo by Péter

The black-and-white photograph from the Fortepan public archive depicts a man following a ski track amid a thick layer of snow in 1931. The color picture from state news agency MTI, taken on Jan. 19 by a drone, gives a bird’s eye view of the Mátraszentistván Ski Park (105 km northeast of Budapest by road), including a slope crowded with winter sports fans.

Photo by Ákos Schermann / Fortepan

Komka / MTI

1News • macroscope

Industry Still in Bad Shape, Inflation Slips out of Target

The improvement in Hungary’s industrial performance seen in October turned out to be only temporary, as output fell again in November, both on an annual and monthly basis. In the meantime, 2024’s year-end and annual inflation data have also been released and show room for improvement.

Industrial production in Hungary, 2002-2024 (January-November)

Production volume index, same period of previous year equals 100

The volume of industrial production in November 2024 lagged by 4.2%, while that based on working-day adjusted data declined by 2.9%, year-on-year. According to seasonally and working-day adjusted data, industrial output was 1.6% lower than in October 2024, fresh data released by the Central Statistical Office (KSH) shows.

Production volume fell in November 2024 in the great majority of the manufacturing subsections. Output grew only in three subsections and was at its highest rate in the manufacture of coke and refined petroleum products. In the first 11 months of the year, industrial production was 3.9% lower than in the same period of 2023.

This is particularly disappointing news given that, one month earlier in October, industry had shown some faint signs of life, falling by

annually but increasing significantly, by 2%, on a monthly basis.

The November industrial data suggests that the Hungarian economy’s mainstay is still struggling, which will also impact the GDP figures due at the end of the month. The bigger problem is that the outlook is still gloomy, with orders from the vitally critical German factories falling dramatically at the end of last year.

Destatis, the German statistical agency, announced recently that orders from German factories fell by 5.4% in November, significantly worse than the 1.5% decline reported in October. This is unfavorable news from the point of

view of the local economy, but it follows a trend; since the beginning of 2024, the performance of the Hungarian industry has been pulled back by weak German demand. This was most evident in the field of vehicle and battery production.

The Cavalry to the Rescue?

The question for 2025 is whether new industrial capacities entering production, including the Hungarian factories of BMW, BYD and CATL, will be able to compensate for the decline caused by weak external demand.

“The short-term outlook is not favorable: the vast majority of indices measuring the sentiment of economic actors in the eurozone and within it, Germany, have been stagnant for a year, and in fact, in December, they showed a consistent deterioration compared to the situation in November,” Erste Bank analyst János Nagy said in a comment.

“In parallel, the process of electromobility, which is vital for our country, has also slowed down massively, and there are no signs of an upturn in the coming months,” he added.

According to Nagy, one can perhaps be optimistic in the medium term: the significant capacity expansions entering production (mainly in the automotive industry and in the field of battery production) may result in a substantial recovery in output in larger volumes, starting from the second half of the year.

Although huge volumes are planned, the shadow of the weak external economy gives reason for only moderate

optimism this year. As things stand, the positive growth effect of the capacity expansions may appear mainly from 2026, according to Nagy.

The outlook is negative because German industry still shows no signs of a lasting recovery, agrees Dániel Molnár, senior macroeconomics analyst at Makronóm Intézet. He added that a turnaround in German industry could be expected from the second half of the year, but this required a reduction in political uncertainty in Hungary’s most important foreign market, a federal general election is due on

Feb. 23,

and a positive turn in economic policy.

“Looking ahead, however, an upturn in industry can be expected. Retail sales are gradually picking up, while government programs starting this year may create demand for broad segments of the manufacturing industry through the construction boom, which may be further supported by improved external demand,” Molnár says.

“In addition, large-scale investments (BMW, BYD, CATL) are gradually starting to bear fruit this year, and although they will only reach their capacities in the longer term, they may boost industrial production and exports and thus GDP this year,” he adds.

The KSH also published inflation data for December and for the whole of 2024. December produced the worst monthly figure last year. Prices were 0.5% higher than the previous month.

Following a 3.7% year-on-year increase in November, consumer prices rose by an average of 4.6% in December.

Rising Inflation

“This was in line with our expectations, but higher than the market consensus, which was 4.4%,” analysts at MBH Bank wrote in a note following the release of the data. The experts emphasize that annual core inflation rose from 4.4% to 4.7% in December, slightly higher than they had calculated, which indicates increasing inflationary pressures.

The December monthly figure completes the picture for 2024: last year, prices rose by an average of 3.7% compared to 2023.

“One of the important reasons for the increase in prices from November to December was the further increase in food prices, but this rate has already slowed down compared to previous months. The weakening of the forint is having an impact, and this has partly filtered through to the prices of durable consumer goods,” says ING Bank analyst Péter Virovácz.

For 2024 as a whole, the analyst says that the 3.7% figure is more favorable than expectations at the beginning of the year and is also a significant improvement compared to 2023.

According to ING’s latest forecast, inflation could be around 4.2% in 2025, meaning the average rate of price increases could accelerate compared to last year.

ZSÓFIA CZIFRA

Hybrid Working Set to Dominate Office Market

This year will be transformative for the world of work as technological advancements continue to shape how businesses of all sizes operate and evolve, says one provider of flexible office space.

Real Estate Matters

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

While the latter stage of 2024 saw some media commentators increasingly talk about the so-called “Return to Office” or “Return to Work,” the reality of how and where teams operate is far more nuanced than these headlines imply.

The reality for many companies and their people across the world is that hybrid working continues to empower millions of employees to work how and where they want, and most CEOs of white-collar businesses believe in its benefits long term, according to International Workplace Group, the provider of flexible workspace including brands such as Regus and Spaces.

The firm believes this year will see organizations increasingly shift their focus towards enhancing the productivity and happiness of their people rather than focusing on where they work from.

The hybrid working model will gain traction for another significant reason: more businesses will re-size their traditional real estate footprint as longer-term leases continue to expire, ensuring hybrid working becomes a strategic business choice, minimizing overheads while providing a range of benefits to workers.

Research has consistently shown that hybrid working leads not only to greater employee satisfaction but also greater productivity, IWG says. Companies that embrace the hybrid model and

relocate its headquarters to the property. The complex in the Mokotów district was developed by Ghelamco Poland in 2001.

Sustainability Shapes CEE Office Markets

Sustainability, growth, and opportunities are shaping office markets in CEE, says Colliers. Cities with high green certification rates for modern offices attract premium rents, indicating strong demand for sustainable spaces, according to the agency’s report “CEE Office Markets on the Green Path: Decarbonization Potential,” which examines office markets across 11 CEE capital cities.

“Markets with a high share of older stock, such as Prague, Bratislava, and Budapest, face challenges in

achieving energy efficiency. Significant retrofitting investments are required to meet modern sustainability standards. Conversely, cities like Warsaw and Vilnius, with a higher proportion of newer buildings, already align with advanced energy performance benchmarks,” the study finds.

Olga Drela, business analyst at Market Insights Colliers, says mature markets like Warsaw (6.2 million sqm), Budapest (4.4 million sqm), and Prague (3.9 million sqm) offer scale and liquidity, making them attractive

empower their employees to work when and where they prefer will fare much better than those that do not.

IWG’s founder and CEO, Mark Dixon, highlights that productivity hinges on good management and clear key performance indicators, not location. As the surge of small businesses

“This transaction underscores Indotek Group’s strategic approach to aligning our portfolio with market dynamics,” says Philip Wood, international expansion director at Indotek Group.

“The deal highlights Indotek’s adaptability and value-driven strategy. It demonstrates foresight in securing a buyer committed to repurposing the property for long-term operational success,” he explains.

“The deal also aligns with Indotek’s strategy to actively manage its portfolio across CEE. The group remains committed to Poland, focusing on revitalizing underperforming assets and investing in high-potential ones,” Wood adds.

Indotek received legal advice from the Warsaw team of Greenberg Traurig in the transaction.

to institutional investors. High green certification rates in Warsaw (98%) and Bucharest (93%) further strengthen their competitiveness.

Modern office spaces (that is, less than seven years old) enjoy higher occupancy and rental rates compared to older buildings. For example, in Warsaw, vacancy rates are 5% for newer buildings versus 15% for older stock. Tenants prioritize operational cost savings, sustainability, and modern amenities. Warsaw and Bucharest lead with the highest green certification rates, enhancing their competitiveness and attracting investment.

continues post-pandemic, he believes the demand for scalable, flexible workspaces will rise even further in 2025.

“Hybrid working not only makes us happier, healthier and more productive, but also better off, and that is something that everyone will be thinking of moving into 2025,” Dixon insists.

Wing, Alteo Conclude Energy Supply Agreement

Developer Wing and Alteo Energiaszolgáltató Nyrt., the energy trading company of Alteo Group (a Hungarian-owned energy service and trading company listed on the Budapest Stock Exchange), have entered into a strategic cooperation agreement. Under the deal, Alteo will supply 100% of the industrial properties managed by Wing Industrial with electricity from clean and renewable energy sources this year and next.

The cooperation takes the partnership between the two companies and Wing’s green commitment to a whole new level, according to the developer.

Alteo will, therefore, continue to support Wing in 2025 as a trader in the procurement of green electricity for the Airport City Business Park, East Gate Business Park, East Gate PRO Business Park and Login Business Park industrial parks in addition to the Liget Center and Liberty office buildings and the Ibis and Tribe Budapest Airport Hotels.

Wing Industrial and Alteo Energiaszolgáltató Nyrt. have signed a cooperation agreement.

As part of the strategic partnership, Alteo will cover the energy needs of the entire portfolio of Wing Industrial, the business division responsible for industrial and logistics developments, with energy from a solar park managed by Alteo.

Furthermore, in 2025, 50% of the total electricity purchased by the entire Wing group will come from clean and renewable energy sources, marking a significant step forward in sustainability.

ESG criteria and sustainability are always priorities in Wing’s developments, the company says.

One of the group’s long-term goals is to measure the energy consumption of buildings with up-to-date data recording and analysis. Furthermore, it aims to modernize facilities that waste gas and electricity and progressively develop efficient buildings that rely on green electricity for their energy consumption, focusing on present-day requirements and tenant’s needs.

GARY J. MORRELL

The Budapest-based investor Indotek Group has sold its 6,600 sqm Bokserska Office Center in Warsaw. The buyer is Enter Air, Poland’s leading charter

airline, which intends to

Indotek Sells Bokserska Office Center in Warsaw

The International Workplace Group HQ in Hungary.

The Bokserska office center in Warsaw.

Hungary, Slovakia Compare Notes on Ukraine Gas Transit Decision Roundup Crisis

Prime Minister Viktor Orbán met with Slovak Prime Minister Robert Fico in Bratislava on Jan. 21 to address the two nations’ response to Ukraine’s recent decision to stop the transit of Russian gas through its territory, as well as to discuss Ukraine’s potential accession to the European Union.

Ukraine refused to renew a transit agreement with Russia, which expired at the beginning of this year, to reduce the funding of its aggressor’s war effort against it. While raising costs by depriving countries still dependent on this cheap resource, such as Hungary, it has doubly affected Slovakia, which not only used the gas itself but earned transit revenues on gas shipments through its territory, such as those to Austria.

On Jan. 14, Hungary’s gas transmission operator, FGSz, announced plans to raise its gas exports to Slovakia from 2.63 billion cubic meters annually to 3.5 bcm by April. While Hungary had already increased gas imports and exported surplus volumes last year, it maintains its supply of Russian gas via Bulgaria and Serbia through the TurkStream pipeline.

During a joint press conference with Fico, Orbán addressed what he said were “aggressive and hostile remarks” coming out of Kyiv regarding the irritation felt over the hike in gas prices that stemmed from Ukraine’s halt of gas transit deliveries to Europe.

“This matter can’t be resolved with these remarks,” Orbán said and argued that Ukraine was not in a position “to afford this” given the global shifts he claimed were “working against Kyiv.” He expressed full support for Fico’s efforts to resolve the gas transit issue through negotiations.

Regarding Ukraine’s NATO membership aspirations, Orbán maintained that the issue was not on the table and likely never would be due to a lack of unanimous support. He warned that admitting Ukraine to NATO would lead to immediate and direct conflict with Russia, which Hungary sought to avoid.

He was equally dismissive of Kyiv’s other ambition, that of joining the European Union. Speaking in his weekly interview on Kossuth Rádió on Jan. 17, Orbán stated that Ukraine’s potential EU membership “would, for the time being, bring more dangers than opportunities from the point of view of Hungarians.”

Shutting up (the Farm) Shop

While he acknowledged that “Ukraine must be dealt with” once the war had ended and the EU sanctions policies had run their course, the country still posed “a serious challenge, even a threat” to the European economy. If Ukraine joined the EU as envisioned today, then “Hungarian,

Polish, and even French farmers can close up shop,” Orbán claimed, unless “sufficiently stringent regulations” were implemented.

Regarding Ukraine’s NATO membership aspirations, Orbán maintained that the issue was not on the table and likely never would be due to a lack of unanimous support. He warned that admitting Ukraine to NATO would lead to immediate and direct conflict with Russia, which Hungary sought to avoid.

Minister of Foreign Affairs and Trade Péter Szijjártó added that the closure of natural gas or crude oil delivery routes was contrary to the expectations tied to EU integration, employing characteristically robust language to call such actions “unacceptable” in a Facebook post on Jan. 9.

“With respect, we must remind our Ukrainian colleagues that there

is a reality that exists and that there are rights and obligations,” the minister said.

Szijjártó had also said that the outgoing Biden administration’s latest package of U.S. sanctions against Russia posed serious challenges to Central Europe and called for new resources and transport routes as soon as possible at the European Gas Conference in Bucharest on January 20.

Amidst all these difficulties, Szijjártó said that the TurkStream pipeline had become “indispensable” for ensuring Central Europe’s gas supplies. He noted that Hungary expected everyone to respect the operability of this supply route, adding that security of energy supply was a matter of sovereignty; Hungary considers any action endangering its energy security an attack on its national sovereignty.

The TurkStream pipeline has been a reliable delivery route for years, Szijjártó said, adding that both gas suppliers and transit countries honored their contractual obligations and “behave reliably.” Following a conversation with his new Bulgarian counterpart, Georg Georgiev, on Jan. 21, Szijjártó said he had been assured that Bulgaria would maintain the transit of natural gas to Hungary through the TurkStream pipeline.

NICHOLAS PONGRATZ

Photo by Zoltán Fischer / Prime Minister’s Press Office / MTI

Prime Ministers Viktor Orbán of Hungary (left) and Robert Fico of Slovakia hold a joint press conference after their meeting in Bratislava (known to Hungarians as Pozsony), on Jan. 21.

in Brief News

Danube Embankment to be Car-free on Summer Weekends

As in past years, the lower Danube embankment road on the Pest side of the capital city will be opened to pedestrians, bicyclists and users of scooters and roller skates every weekend this summer, Mayor of Budapest Gergely Karácsony said in a post on Facebook. He said the road’s full width would be free of cars and lorries every weekend between March 15 and Oct. 26 and on public holidays. At the same time, the viaduct next to the Jane Haining embankment and several other sections along the river bank may be renovated starting this year or next, he said. The central section of the embankment will be fully opened to pedestrians from June 21, after the end of the school year, until mid-August, when preparations will begin for the Aug. 20 national holiday.

Airport Passengers Exceed 17.5 mln in 2024

Passenger numbers at Budapest Ferenc Liszt International Airport exceeded 17.5 million in 2024, reaching a new record, Minister of National Economy Márton Nagy

said in a post on Facebook on Jan. 17. “That result shows that buying back the airport was a great deal. And that’s just the start,” Nagy said.

EBRD Financing Deployed in Hungary Nearly Doubled in 2024

The European Bank for Reconstruction and Development (EBRD) invested EUR 137 million in Hungary in 2024, nearly double the volume in the previous year, the lender said in a statement issued on Jan. 16. Around 55% of that financing went to the corporate sector and 45% was channeled to lenders, including the bond programs of OTP, Erste, UniCredit, and Raiffeisen banks. Green investments were the target of 65% of financing.

Hungary’s Intelligence Reached 15.2 mln in 2024

Motorway vignette sales in Hungary reached 15.2 million in 2024, toll system operator NÚSz said in a statement issued on Jan. 14. Sales rose by a few hundred thousand from 2023 and 2022, NÚSz said. Sales of “one-week” vignettes, valid for 10 days, fell 15% to 8 million, and sales of one-month vignettes dropped 6% to 2.1 million. Sales of one-day vignettes, rolled out in April,

CPI at HUF 4.6% in December

Hungary’s annualized consumer price index reached 4.6% in December, rising from 3.7% in the previous month, according to data released by the Central Statistical Office (KSH) on Jan. 14. Average annual inflation came to 3.7%. The KSH data shows food prices rose 5.4% in December. The price of flour jumped 36.2%, milk prices rose 19.5%, and the price of eating out increased 7.8%, but noodle prices fell 7.1%, margarine prices dropped 3%, and the price of sugar was 2.6% lower. Household energy prices edged down 0.5%. Gas prices inched 0.4% lower while electricity prices edged up 0.3%. Consumer durable prices inched 0.6% higher. Motor fuel prices rose 8.3%. Spirits and tobacco products increased by 4.3%, and clothing prices rose by 2.7%. Service prices increased 6.8%. Harmonized CPI, adjusted for better comparison with other European Union member states, was 4.8%.

reached 1.6 million. Sales of annual vignettes good for a single county rose 10% to 2.9 million, while those of annual vignettes valid nationwide rose by 4% to 700,000. Revenue from sales of motorway vignettes reached HUF 148 billion in 2024. Revenue from commercial vehicle tolls came to HUF 656 bln.

Agencies Engage with U.S. Over Rogán Sanctions

Hungarian intelligence agencies have contacted U.S. counterparts regarding the case of Minister in Charge of Orban’s Cabinet Office Antal Rogán, who was sanctioned by the outgoing U.S. administration, according to Zoltán Sas, chair of Hungary’s parliamentary National Security Committee. Speaking to Hungarian news site Telex following the committee’s meeting, Sas, a member of the rightist opposition party Jobbik, confirmed that the inclusion of Rogán on a sanctions list was carried out under U.S. legal procedures. Hungarian authorities do not dispute the legality of this action. “The Hungarian side requested any available information supporting the decision from its American partners, but the U.S. was unable to provide such information,” Sas said, summarizing details from the committee meeting. During the meeting, Hungarian intelligence officials also noted the emergence of a broader dynamic involving identifiable actors on the international stage. According to their observations, these individuals are allegedly working to undermine Hungarian-U.S. relations and hinder their effectiveness, even before the new U.S. administration took office. Interestingly, at the time of editing on Jan. 22, an article on the sanctioning of Rogán had been “moved, deleted, or is otherwise unavailable” on the official U.S. Department of State website, but there was one still live on the U.S. Department of the Treasury website.

Hipa Promotes Investment Capital Inflow of More than EUR 10 bln

The Hungarian Investment Promotion Agency was instrumental in bringing an investment capital inflow of EUR 10.3 billion into the local economy in 2024, according to a statement issued on Jan. 16. Investment capital inflow promoted by Hipa exceeded EUR 10 bln for the second year in a row, the agency said on its website. It said its work had ensured the implementation of 77 projects, creating 18,500 jobs last year. Chinese investments came to EUR 5.2 bln, or 51% of the total. South Korean companies accounted for EUR 2.6 bln of the full amount. The automotive sector drew EUR 4.1 bln in investment capital inflow, electronics manufacturing EUR 4 bln and the food industry EUR 800 million. Investments in the automotive sector created 10,511 jobs, projects in the electronics industry created 3,368 and investments in the ICT/IT sector created 1,606. Over the past 10 years, Hipa has guided 2,200 investment projects with a combined value of EUR 59.2 bln, creating close to 170,000 jobs, the agency said.

VOSz Highlights Need for Guest Workers

The National Association of Entrepreneurs and Employers (VOSz) highlighted the need for guest workers during the current phase of economic development in Hungary and warned against the impact of administrative restrictions that could limit such employment. In a statement issued on Jan. 21, the business association pointed to a shortage of blue-collar workers in the country and said guest workers were needed to complete investments that would create more local jobs. It added that companies unable to make the necessary hires could scale back their activity or take it to a more favorable environment for doing business. VOSz dismissed speculation that guest workers drag down Hungarian wages, noting that the labor code requires them to be paid the same as their Hungarian counterparts. Because of the need for integration and training, guest workers cost employers as much as 30-50% more than local laborers, it added.

EC Gives Budget Positive Assessment

The European Commission acknowledged that Hungary’s budget would preserve stability in the coming years in an assessment, the Ministry of National Economy said in a statement on its website. The ministry said that “intensive negotiations” with EC experts to clarify issues had preceded the EC’s endorsement of Hungary’s national medium-term fiscal-structural plan. In its assessment, the EC said Hungary’s fiscal deficit and state debt levels would decline in the coming years despite the unfavorable external economic conditions. The ministry said Hungary’s government remained committed to a disciplined fiscal policy and aimed to reduce the budget deficit, relative to GDP, to 3.7% in 2025 and 2.9% in 2026 while bringing state debt below 70%. The government is committed to “harmonizing” the budget balance and economic growth as both “go hand in hand,” it added.

Hungary’s Green Industry Competitive in Batteries, Heat Pumps

The Hungarian green industry is strong and competitive in both batteries and heat pumps, the Ministry of Energy Affairs wrote on its Facebook page. Hungary, along with Germany and Poland, already boasts one of the largest European production capacities in the battery industry. The country also has significant export and expansion potential in producing components for heat pumps used in the utilization of geothermal heat. According to an independent study recently published by the European Commission, the ranking of EU member states in terms of lithium-ion battery production capacity is led by Poland (85-95 gigawatt-hours), Germany (55-60 GWh) and Hungary (40-42 GWh).

Photo by

Andrzej Rostek / Shutterstock.com

2 Business

Equilor Warns 2025 Could Be Another Uncertain Year for Global Economy

The economic environment worldwide may remain uncertain in 2025, primarily influenced in the short term by newly inaugurated U.S. President Donald Trump’s trade policies, according to Hungarian investment services firm Equilor.

it is possible that these measures will be diluted or not implemented at all.

The U.S. economy grew dynamically in

2024,

successfully reducing inflation; however, upward risks remain. The most significant uncertainty stems from Trump’s trade policies and threatened tariffs, which could heavily influence growth and inflation.

These policies could significantly impact both growth and inflation trends. In Hungary, growth might pick up in the second half of the year, driven primarily by the launch of production at three major foreign-owned factories (BYD, BMW, CATL) and the revival of domestic consumption.

As a result, Equilor Investment Zrt. projects GDP growth to reach 2.2% this year and 3.4% in 2026. The weakening of the forint observed in recent months has led to additional inflation, which may settle slightly above last year’s level at 4%. Meanwhile, the forint’s exchange rate could further decline, with the euro possibly reaching around 420 forints by year-end, Equilor reckons.

With Donald Trump’s re-election, U.S. economic policy has taken a less predictable turn, according to the annual outlook by Equilor, which is celebrating its 35th anniversary this year. The company highlights that Trump’s campaign promises could have a significantly negative impact on both the global and U.S. economies. However,

Although they were only mentioned in passing Trump’s inauguration speech, Equilor anticipates that tariff negotiations with China, the European Union, and other countries, such as Canada and Mexico, could begin almost immediately, focusing primarily on sectors deemed critical for national security, such as defense, medical equipment, and energy.

Outside the U.S., Equilor expects subdued economic activity worldwide.

European growth will likely remain extremely restrained, while China is unlikely to stimulate its economy sufficiently to achieve substantial growth. U.S. tariffs, if introduced, could further exacerbate this unfavorable situation.

Slow German Recovery

In the Eurozone, concerns over inflation have given way to doubts about growth, now the former has been brought down to the 2-2.5% range. Germany, which accounts for nearly 30% of the region’s economy, continues to struggle in its industrial sector due to high energy costs and declining demand.

Following last year’s growth of just 0.7%, it may only reach 1.1% this year. Recovery

next reduction is not likely until the third quarter, depending on inflation trends and the forint exchange rate.

Inflation to Edge Up

The weakening of the forint in recent months, partly due to external factors such as Trump’s victory and the subsequent strengthening of the dollar, has contributed to additional inflation. Last year’s average euro-forint exchange rate was 395.4, and the Hungarian currency is now nearly 5% weaker. Approximately 25% of the depreciation could be reflected in consumer prices. If the exchange rate remains at its current level, inflation could increase by more than 1%. Equilor anticipates further depreciation, with the euro potentially reaching

HUF 420

by the end of the year. Average inflation in 2025 is expected to be 4%, decreasing to 3.5% in 2026.

The heightened risks and the stock market rally of recent years pose challenges for investors. However, Muhi emphasizes that good returns can be achieved even in such unfavorable conditions with the right strategies. According to Equilor’s chief analyst, the short-term impact of expected economic policies suggests that, among global regions, the U.S. market could perform the best.

from the energy and inflation crises remains slow, with manufacturing data consistently showing a deceleration, noted Gergely Muhi, Equilor’s chief analyst.

The European Central Bank is reducing interest rates faster than expected. In contrast, the U.S. longterm interest rate trajectory may exceed expectations, significantly narrowing the maneuvering room for emerging market central banks such as Hungary’s.

Here, household consumption may continue to expand in 2025, supported by real wage growth. The cautious spending pattern is expected to subside gradually, with consumption further fueled by the interest payments flowing out of the government bond market.

Growth will also benefit from the start of production at those three major automotive factories in the second half of the year, although their contribution to GDP will heavily depend on global automotive demand. These factories are expected to increase GDP by 0.6%

this year and 0.8% in 2026, potentially reaching 2% by 2030.

Equilor predicts that agriculture’s contribution to GDP could be significant due to a low base, while Hungary’s key export market, the German manufacturing sector, shows no signs of a meaningful turnaround.

Equilor expects the Hungarian National Bank (MNB) to implement a total interest rate cut of 50 basis points this year, although the

Protective tariffs may benefit the U.S. economy in the short term, while stable economic growth and the increasing efficiency brought by the widespread adoption of artificial intelligence solutions are boosting the profitability of American companies. Significant stock market gains are unlikely, however, as equity prices already reflect a highly optimistic outlook. Nonetheless, singledigit stock market growth could accompany earnings growth per share. Equilor’s analysis recommends keeping some powder dry by overweighting the low-risk portion of investment and savings portfolios compared to the usual ratio. After the next interest reset of the Hungarian Government Securities Plus (PMáp), they may become less attractive.

Among retail government bonds, FixMáp currently appears most appealing, and a new series of government bonds could also emerge as attractive options. Among government securities, shortterm U.S. bonds could offer favorable alternatives, supported by the strong dollar. Even in uncertain circumstances, good investment opportunities can be found with proper risk management and attention, the investment firm argues. Equilor suggests examining the shares of retail companies in Poland, where household consumption has declined similarly to Hungary, as their prices could rebound with increasing consumption. Notable examples include Central Europe’s leading discount household retailer Pepco, and Jeronimo Martins, the operator of Poland’s largest food discount chain, Biedronka. Among Hungarian shares, Equilor sees the most growth potential in Gránit Bank, with a one-year target price of HUF 18,306 (it should perhaps be noted that in 2022, Gránit Bank acquired a 50.1% stake in Equilor) and Magyar Telekom, where the one-year target price is HUF 1,550).

Photo by Gergely Herpai / BBJ

From left, Dániel R. Kovács, from Equilor’s PR agency Front Page; Bálint Szécsényi CEO and board chairman, Gergely Muhi, chief analyst; Szilárd Buró, head of financial innovations; and Zoltán Varga, senior analyst.

News Company

BMW Group Hungary Sells

6,000-plus Autos in 2024

BMW Group Hungary sold 6,274 new cars in Hungary last year, giving it a 5.2% market share, managing director Zoltán Gombos said in a statement issued on Jan. 16. BMW Group Hungary sold 5,784 BMW and 490 Mini models last year, consequently helping it preserve its position as a market leader in the premium segment with a 30.8% share, Gombos said. The proportion of corporate customers among BMW brand sales is 90%, he added. Sales of BMW motorcycles were down 7% at 743 in 2024. Market share in the new motorcycle segment continues to be above 20%.

BYD Recruiting From Szeged Uni’s Faculty ofEngineering

As construction progresses on BYD’s new factory in Szeged (170 km southeast of Budapest), the global electric vehicle manufacturer is proactively recruiting future employees, according to profitline.hu. In collaboration with the University of Szeged’s Faculty of Engineering, BYD’s HR team participated in recent final examination committees to identify promising talent. This initiative

aligns with the faculty’s strategy to strengthen industrial partnerships, enhancing educational quality and students’ career prospects. BYD representatives expressed admiration for the students’ expertise and emphasized their commitment to hiring local professionals who are open-minded, culturally sensitive, proficient in English, and passionate about the EV industry.

Ford Leads Hungary LCV Market

Ford models accounted for 9.3% of all new vehicle registrations in Hungary in 2024, putting it in third place, but the automaker led the local market for light commercial vehicles. There were 14,128 new Ford models registered in Hungary last year, Ford Hungary said in a press release. Sales of new Ford LCVs, including one- and two-tonne passenger models, came to 9,253, giving the brand a 27% market share, up 2.7 percentage points from a year earlier.

Veolia Closes Acquisition of Gönyű Power Plant

Veolia closed the acquisition of a 428 MW gas-fueled combinedcycle power plant in Gönyű (110 km northwest of Budapest) from

Germany’s Uniper on Jan. 6, the French company announced in a press release on Jan. 21. Veolia had announced the»acquisition in February 2024.

Kemenes

Cukrászmanufaktúra Inaugurates

HUF 1.8 blnPlant

Family-owned pastry and cake maker Kemenes Cukrászmanufaktúra inaugurated a HUF 1.8 billion plant in Páty (20 km west of Budapest) on Jan. 21, according to origo.hu. The government supported the investment with HUF 618 million, Minister of Foreign Affairs and Trade Péter Szijjártó said at the ceremony. The project paves the way for Kemenes to export its products, he added.

Xinzhi Investing HUF 50 bln in Hatvan Plant, Creating Almost 900 Jobs

China’s automotive company Xinzhi is creating almost 900 jobs by investing HUF 50 bln in a new plant it is building in Hatvan (60 km east of Budapest), Minister of Foreign Affairs and Trade Péter Szijjártó said on Jan. 13, according to origo.hu. Szijjártó said this investment further strengthens Hungary’s position in the global market for transitioning to EVs. He said Xinzhi is a market leader in the production of one of the most important basic units of electric motors. The minister said the company is also bringing serious research and development activities to Hungary, in addition to production, and will be

hiring 30 highly trained engineers. “The electric car industry is still in the early stages of its development, so R&D plays a really big role now,” the minister said, noting that the R&D work of the company will be of exceptionally high added value.

Puli Space Signs Data Buy Agreement With ESA

Hungary’s Puli Space has signed an exploration data buy agreement with the European Space Agency (ESA), the space industry company said in a press release. The Puli Lunar Water Snooper, a miniature neutron spectrometer developed by Puli Space, will study water ice in the Moon’s south pole region and provide the first direct surface measurements from a permanently shadowed crater. ESA will obtain data from the spectrometer, which will fly on Intuitive Machines’ second lunar mission to launch as early as February 2025.

Rigo Opens HUF 1.5 bln Capacity Expansion at Martfű Base

Machine and tool maker Rigo inaugurated a HUF 1.6 billion capacity expansion at its base in Martfű (125 km southeast of Budapest) on Jan. 17. Rigo was awarded HUF 406 million in conditional European Union support for the investment, Deputy State Secretary Szabolcs Szolnoki noted. Rigo founder and managing director Zoltán Rigó said close to 3,000 sqm had been added to the base. The firm has sold its bookbinding machines in 72 countries so far, he said.

Stadler Inaugurates Szolnok Capacity Expansion

Swiss rolling stock maker Stadler has inaugurated a capacity expansion at its base in Szolnok (105 km southeast of Budapest), according to origo.hu. Minister of Foreign Affairs and Trade Péter Szijjártó said the investment would boost capacity at the base by 20% and add double-decker aluminum car bodies to the production palette. Stadler has invested around HUF 80 billion in Hungary and produced 5,600 car bodies, he said. These are in service in 14 countries, including the United States, Spain, the Netherlands and Germany. Stadler employs close to 1,000 people in Hungary. In total, around 900 Swiss-owned companies in Hungary employ more than 30,000 people, Szijjártó noted.

Photo by János

Mészáros / MTI

Peter Spuhler, Chairman of the Board of Stadler Rail AG (left) and Minister of Foreign Affairs and Trade Péter Szijjártó at the inauguration of the new Stadler Szolnok Kft. factory on Jan. 17.

Good News on EVs, Solar, but MVM Deal in Romania Hits Turbulence

Hungary’s efforts at advancing its electric vehicle adoption, battery usage, and solar development continue to make strides, yet renewed concerns over its energy independence and the geopolitical challenges tied to energy security have further complicated the country’s ambitious energy aspirations.

Energy Matters

A biweekly look at energy issues in Hungary and the region

one of Romania’s largest energy providers, serving over 3.4 million customers, with a market share of about 40% for gas and 15% for electricity by customer numbers. While this acquisition would strengthen Hungary’s regional energy footprint, it has raised concerns in Romania about national security risks.

Flagged for Review

Romania’s Ministry of Energy has flagged the deal for review by the Romanian Commission to Examine Foreign Direct Investment (CEISD), citing MVM’s reliance on Russian gas as a potential vulnerability. The CEISD is responsible for scrutinizing and approving foreign investments to ensure they do not compromise national security. Romania’s energy ministry notified the commission about MVM’s ties with Russia, saying it identified elements of “decisive influence, shadow control, influence by economic dependence and effective control.”

Hungary’s transition toward sustainable transportation continues to gain traction with its EV initiatives. The number of battery electric vehicles (BEVs) in the country surpassed 70,000 last year, reflecting its commitment to increasing green mobility adoption. In 2024 alone, nearly 22,000 BEVs were registered, with more than 20,000 of those being passenger cars.

To support this growth, the Hungarian government has allocated HUF 60 billion for electromobility programs, including subsidies for EV purchases and the expansion of charging infrastructure.

One of the most notable programs, funded under the European Union’s REPowerEU initiative, has received some 4,700-plus applications from businesses. These applications collectively requested HUF 21.5 bln to support the purchase of more than 5,500 EVs. Popular brands among applicants include BYD, leading with 1,350 vehicles, followed by Tesla, with 860, and Volvo, with close to 430. Subsidies range from HUF 2.8 million to HUF 4 mln per vehicle, depending on battery capacity. This program will run until March 2025.

In parallel with these developments, Hungary’s battery industry has emerged as a key player in Europe. With a lithium-ion production capacity of 40-42 gigawatt-hours, Hungary ranks among the top three EU member states, following Poland, which leads with 85-95 gigawatt-hours, and Germany (55-60 gigawatt-hours). The country’s green industry is also highly competitive in producing components for heat pumps, which are used to harness geothermal energy.

Minister of Energy Affairs Csaba Lantos emphasized to business daily Világgazdaság [Global Economy] the continued need for innovation and infrastructure development to support Hungary’s rapidly expanding solar energy sector. The country’s installed solar capacity has already surpassed 7.5 GW, significantly outpacing projections, and is on track to achieve 12 GW by 2030.

Solar Support

To accelerate this momentum, the government introduced the Solar Energy Plus program. This year-long initiative attracted over 23,000 applications and distributed HUF 96.4 bln in subsidies. The program supported the installation of solar panels with a combined capacity of 27.6 MW and battery systems totaling 44.8 MW. Eligible households could receive up to HUF 5 mln in support, covering two-thirds of the investment cost. By the program’s end on Jan. 15, 2025, more than HUF 85 bln in subsidies were approved, and HUF 18.8 bln had been disbursed to successful applicants.

Building on these efforts, the government is preparing new solar tenders to further boost renewable

energy development. According to Lantos, these tenders will focus on advancing solar and battery storage capacities while addressing gridrelated challenges. The goal is to support both residential and industrial stakeholders in adopting sustainable energy technologies.

These initiatives will also align with Hungary’s broader commitment to achieving its climate goals and securing a leading role in the European green energy transition, the minister said. Hungary’s commitment to solar energy is also evident in its collaborative efforts beyond its borders. The construction of Europe’s largest solar park on the Hungary-Romania border officially began following the issuance of all necessary permits on

Jan. 9.

Located in the municipalities of Graniceri (known to Hungarians as Ottlaka) and Pilu (which Hungarians call Nagypél), this cross-border project, developed in partnership with Monsson Trading, represents a milestone in renewable energy initiatives.

Once completed, the solar park will span over hundreds of hectares and is expected to generate enough electricity to power tens of thousands of households annually, significantly enhancing energy output in the region and contributing to both countries’ renewable energy goals.

Yet, despite the cross-border collaboration, Hungary’s energy relationship with Romania has its issues. Hungarian state-owned energy group MVM placed a bid to acquire E.ON Energie Romania,

This situation echoes Spain’s earlier decision to block a Hungarian bid for a railway merger due to geopolitical concerns, a fact which the Romanians referenced. “We have seen precedent in Spain where a transaction involving the Hungarian entity was rejected by a similar committee to the Romanian one,” Romania’s Energy Minister Sebastian Burduja said. “We will have to consider all of that then to reach a decision.”

The amount of the bid had also raised eyebrows. The Hungarian firm proposed paying up to EUR 200 mln for a 68% stake in E.ON Energie, which Burduja valued at no more than EUR 50 mln. The MVM offer significantly exceeded those of competitors, which included two stateowned Romanian energy companies.

“The value of the transaction will be under scrutiny [.…] and potential implications in the energy market,” Burduja said. “[We will] investigate further, probably also asking for a viewpoint from the national security establishment.”

Romania’s sensitivity to Russian influence is heightened by its proximity to the Ukraine war and prior incidents of alleged Russian interference, including the annulment of a presidential election. Concerns also stem from the sale contract, which allows for the potential resale of the Romanian energy provider to non-EU entities, possibly enabling indirect control by parties that may not adhere to European regulations.

“We will act firmly and unequivocally to defend the national security of Romania and the energy security of the European Union, which must rid itself definitively of its dependence on Russian gas,” Burduja insisted.

NICHOLAS PONGRATZ

Photo by Zoltán Kocsis / MTI

Minister of Energy Csaba Lantos speaks at a press conference at his ministry in Budapest on Jan. 15, 2025.

New Chapter Opens in Hungarian Film Production

Hungary saw the inauguration of the United Illusions Virtual Production Studio on Jan. 16, the first of its kind in the country and said to be the largest virtual production facility in Central Europe.

The state-of-the-art complex is located in Fótliget, 18 km northeast of Central Budapest by road. With fewer than 10 comparable facilities globally, the studio offers unparalleled services to the filmmaking industry.

“We are proud that the Visual Europe Group has established a world-class film production complex in Budapest, further strengthening Hungary’s position in the international film industry,” says Botond Szabolcs, founder and co-owner of VEG.

“Our extensive experience with LED wall operations naturally led to the creation of this virtual production studio, representing a new era in filmmaking. The complex was developed primarily with the expectations and production needs of international crews

in mind, but we also look forward to hosting domestic productions, whether for feature films, commercials, or music videos,” he says.

“Our goal is to build lasting business relationships with international and local film producers and position United Illusions at the forefront of the virtual production revolution,” Szabolcs adds.

The facility features three state-ofthe-art studios and production offices. The centerpiece is a 28-meter-wide, 6-meter-high LED wall, complemented by a 7-meter by 4.5-meter ceiling panel and a 4 by 4-meter movable side element.

VEG says the setup offers virtually limitless creative possibilities for productions ranging from big-budget Hollywood films to independent projects, commercials, and music

videos. The advanced LED walls can display photorealistic backgrounds in real time, eliminating the need for traditional green screens.

Control and Flexibility

This immersive environment allows actors to focus on their roles within lifelike settings, while directors benefit from unparalleled control and flexibility during shoots, enhanced by augmented reality and virtual reality technologies.

“Hungary has long provided attractive studio capacities, but the arrival of United Illusions opens new horizons for crews visiting Budapest,” says Zoltán Simon, director of the studio.

“With nearly 2,000 sqm of studio space optimized for virtual production and fully equipped technical facilities, we are ready to meet any production

Gloster’s Order Backlog Demonstrates Resilient Growth in Q4 2024

Gloster Infokommunikációs Nyrt. (Gloster Infocommunications

Plc.) closed the fourth quarter of 2024 with an open order backlog totaling HUF 4.739 billion, a year-on-year increase of 15% compared to the same period in 2023.

The firm says the growth is particularly notable as it excludes contributions from the company’s

Systems Integration division, which was sold in December.

The result reflects Gloster’s strategic transition toward high-value, recurring revenue projects within the cloud services and software development sectors.

Since 2021, Gloster’s order backlog has demonstrated an average annual growth rate (CAGR) of 92%, highlighting the company’s ability to sustain momentum despite significant operational changes. The open backlog metric includes all contracted but not yet fulfilled projects across Gloster’s subsidiaries.

The firm says a shift to focus on cloud-based services has been a pivotal driver of its sustained growth. Its merger of Gloster Cloud Zrt. and Systemfarmer Zrt. created Hungary’s largest domestically owned Microsoft

need. Virtual studio environments are the fastest-growing segment of the film industry, elevating storytelling to a whole new level,” Simon says.

The development of United Illusions was realized in close collaboration with Arri, the Munich-based German manufacturer of motion picture film equipment, whose expertise guided the installation of the LED walls and associated technologies.

The studio also features an in-house graphics division, offering services such as digital background creation, complex visual effects, and adaptations of existing visuals.

“We introduced United Illusions to American filmmakers at the Location Expo in Las Vegas in November, where we were a key sponsor. European producers learned about our offerings at the Focus London film market in December, and we plan to expand our client base further at the upcoming Berlinale.”

United Illusions’ services are available in partnership with Origo Studio, which has extensive expe-rience supporting globally successful productions. The two firms will showcase their combined of-ferings to the global film community at the 75th

Berlin International Film Festival (the Berlinale), which runs from Feb. 13-23.

Discussions with international production teams have begun, although details remain confidential until disclosure permissions are granted. It has been confirmed, however, that the studio’s first significant production, featuring international stars, commenced filming immediately after the opening.

its business model. Critical contracts with significant clients have ensured consistent revenue streams for the first half of 2025, with additional orders anticipated as the year progresses.

cloud service provider. The growing European public cloud market is valued at up to USD 160 billion, with Microsoft Azure holding a 22-24% market share.

The cloud division’s recurring revenue, which accounts for more than 80% of its total income, provides the company with a stable and predictable financial foundation. The increasing adoption of artificial intelligence technologies reinforces this. Gloster’s integration of Microsoft AI platforms has proven instrumental in meeting the evolving needs of its clients, particularly as more businesses turn to AI-driven solutions to enhance efficiency and innovation.

Business Cornerstone

Beyond its cloud services, Gloster’s international software development operations remain a cornerstone of

While some smaller projects experienced minor slowdowns, Gloster insists it has cultivated relationships with new clients, leading to promising opportunities for growth. The company’s international sales teams have played a crucial role in securing high-value projects and expanding Gloster’s global reach.

The company’s robust performance has earned the confidence of financial analysts. Erste Group, a leading independent investment service provider, has maintained a “Buy” recommendation for Gloster, with a 12 month

price target of HUF 1,183.

Moving into 2025, Gloster believes it is well-positioned to build on its recent successes. The company anticipates further growth in its cloud and software development divisions, driven by robust recurring revenues and a steady pipeline of new projects.

GERGELY HERPAI

Zoltán Simon speaks at the official opening of the United Illusions Virtual Production Studio.

3 Special Report

ESG

ESG Increasingly All-embracing in Business Sphere

Environmental, Social and Governance, commonly abbreviated to ESG, can be seen as a set of standards that measure the impact of a business on society and the environment and how transparent and accountable that is. The idea is that this will lead to long-term investments in sustainable business.

GARY J. MORRELL

The term has become increasingly prominent in the business, economic, social and political environment and in society at large over the past 10 years. Essentially, it takes a holistic position that sustainability extends beyond exclusively environmental issues and also considers the well-being and health-related factors of staff, customers, and consumers in a given institution.

Allied to ESG is the EU Taxonomy, a classification system that aims to clarify which economic activities are environmentally sustainable in the context of the European Green Deal. The goal is to prevent greenwashing and to help investors make what are seen as informed, sustainable investment decisions.

Essentially, the “Environmental” part of ESG relates to the impact of an organization on the planet. “Social” relates to the impact that an organization has on people. This includes staff, end-users and the wider community. “Governance” deals with how organizations are governed and measured and whether that information is accurate, consistent and transparent, and benchmarked by independent third-party assessors.

“ESG is more than good intentions. It is about creating a tangible, practical plan that achieves real results. Success is not about climate change, diversity and disclosure alone. It is about embedding these principles and more across your business – from investment to sustainable innovation,” comments the Big Four consultancy PwC.

“From net zero to the circular economy, when you put ESG at the very heart of your operation, you take bold steps towards delivering a sustainable business advantage and measurable

value. It is an approach that makes possible the operation, culture and financial changes needed to futureproof your business,” PwC adds.

Regarding the influence that the EU Taxonomy exerts from a regulatory and market demand perspective on architecture and urban development in an urban environment city, Zsombor Barta, ambassador of the Hungarian Green Building Council (HuGBC), argues that regulatory compliance encourages cities to align local regulations with common standards, promoting uniformity in sustainability practices across the EU.

Virtuous Circles

“Market competitiveness enhances the competitiveness of cities that prioritize sustainable development, attracting businesses and residents seeking environmentally responsible living and working environments. This improves the overall urban quality of life through greener infrastructure, better air quality, and increased green spaces,” he says.

ESG issues in real estate, for example, impact the wider population and city environment by promoting sustainable building practices, improving air quality, and enhancing energy efficiency. They can improve quality of life by reducing environmental footprints, creating healthier living spaces, and fostering community well-being through green infrastructure and responsible development.

A popular forerunner to ESG was the concept of “sustainability.” This is generally

seen as a broad principle that guides a company’s business practices, while ESG is a framework that measures that firm’s performance against ESG factors.

“Sustainability could be seen as the motivation, while ESG is the reported outcome,” says the U.K.-based Corporate Business Institute. “Sustainability and ESG have become fashionable terms that are often used interchangeably. However, understanding the nuances and differences between these concepts is crucial. Sustainability, at its core, encompasses the long-term viability of a company’s operations, taking into account its environmental, social and economic impacts,” the institute explains.

“ESG is a holistic approach that considers the interplay between these three dimensions, recognizing that a sustainable organization not only thrives economically but also contributes positively to society and reduces its environmental impact. The three pillars are seen as providing a structured framework for assessing how well a company manages risks and opportunities related to sustainable issues such as carbon emissions and ethical business practices,” the Corporate Business Institute adds.

In practice, sustainability could be regarded as using resources in a way that can be maintained over time without depleting them. This involves conserving natural resources such as energy, raw materials and habitats. According to the UN, “sustainable

development” requires an integrated approach that takes into consideration environmental concerns along with economic development.

Companies will be subject to ESG reporting obligations starting from this year. Although the guidelines are already known, the detailed regulations are still awaited, according to Zsolt Kákosy, senior director of property management at Icon Real Estate Management.

Essential Data

The “Governance” element of ESG further strengthens the role of both property and facility management firms in a building, as these professionals provide the long-term data necessary for preparing ESG and sustainability reports.

Concerning the social elements of ESG, the U.S.-based Well accreditation system is dedicated to the interiors of buildings. By applying Well at scale, organizations can measure and improve their health performance across multiple locations.

“Using our robust set of Well features and our proven process, organizations can map, measure and quantify their health and well-being efforts. With this data, they can measure their impact on people while also comparing their progress internally and against industry peers,” argues the sustainability expert and Well assessor Regina Kurucz.

“While additional ESG costs can pose challenges, they often lead to longterm savings, enhanced asset value, and reduced risks. Initial investments in ESG development are outweighed by benefits such as increased investor interest, tenant demand, and regulatory compliance, making ESG development a worthwhile endeavor despite the upfront costs,” adds HuGBC’s Barta.

From an investment perspective, with more education and pressure from banks, tenants and investors, real estate landlords will realize the need to comply with EU Taxonomy and that spending on ESG compliance is not only a cost but can also be a highly profitable investment.

“In today’s landscape, investors are using ESG as a screening method for choosing where to invest. Properties that 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,” argues Hubert Abt, CEO at Workcloud24.

“We need more and more (thirdparty) verified data for ESG and other types of sustainability reports because credibility and transparency is an extremely important part of these new reporting schemes and investment requirements,” concludes Barta.

The Liberty office and hospitality complex by Wing is a good example of how developments can be integrated within their community to improve livability for all. Liberty is seen to the left of the Magyar Telekom HQ, also built by Wing, and in front of the stadium of Ferencvárosi Torna Club (Fradi soccer club), built by Market Építő Zrt.

ESG-related Expectations are Here to Stay, BÉT Says

Listed companies have been under constant pressure from regulators, investors and customers to comply with ESG related rules. The Budapest Stock Exchange (BÉT) has been assisting current and potential future issuers, and it turns out many perceive the rules as an opportunity rather than an imposition.

When it Comes to ESG, Does Size Matter?

You may wonder to what extent the size of Hungarian capital markets may limit whether related ESG measures can be enforced in the wider economy.

“Indeed, it’s smaller than it should be, even compared to our current level of economic development, but it’s growing,” BÉT deputy CEO István Máté-Tóth explains. “Listed Hungarian companies have a vast network of suppliers to whom this expectation also applies. Accordingly, it all spread to the real economy a long time ago, and so, in this respect, the capital market size is not a limitation.”

LEVENTE HÖRÖMPÖLI-TÓTH

Historically, factoring in ESG in investment decisions was initially a risk management method and, as such, was very much value-neutral. However, since then, it has been embraced by national and EU legislators, and its spread to the entirety of financial markets and the real economy became inevitable. Once banks (credit markets) came into the picture, all of a sudden, entire supplier chains were subject to the stringent test of environmental, social and governance aspects..

As BÉT deputy CEO István Máté-Tóth explains to the Budapest Business Journal, companies in Hungary realized early on that ESG compliance would not be just a nice-to-have thing given the country’s open, export-driven economy deeply integrated into global supply chains.

Hand in Hand With MNB

“The BÉT is dedicated to facilitating a process where issuers implementing sustainable investments and investors interested in green securities find one another,” BÉT deputy CEO István Máté-Tóth stresses. Hence, the bourse website [bse. hu] has been altered to distinguish those securities by indicating compliance criteria. In 2022, the National Bank of Hungary (MNB) published its Green Bond Issuance Guide, and BÉT follows the standards detailed in those guidelines concerning green debt securities.

“Stakeholders knew right away that they couldn’t afford not to take this seriously; otherwise, they would lag behind in the race,” he tells the BBJ Add intensifying consumer and investor demand for sustainable practices, and the equation shows that expectation levels are way above average in this department.

“Hungarian blue chips fulfill relevant criteria on the European level,” MátéTóth notes. The issue is already embedded in the corporate culture of the highest-ranked local companies: Magyar Telekom (a subsidiary of the German telco Deutsche Telekom) launched these processes as early as in the middle of the 2000s, followed by the other blue-chips OTP Bank, oil and gas giant Mol, and pharma firm Richter and yet more, the deputy CEO recalls. The BÉT was ready to play its part in giving an extra boost to help green approaches take root.

Although the relevant ESG act entered force only last year, the Budapest Stock Exchange published an extensive ESG

Incidentally, although the Budapest Stock Exchange is itself a listed entity, the MNB is the»controlling owner of the bourse and nominates the chairman of the board, a position currently held by MNB deputy governor Barnabás Virág.

MNB’s role in shaping the ESG field can’t be over-emphasized. It not only received a sustainability mandate from lawmakers, but its experts have also published a plethora of sectoral studies and analyses that help stakeholders navigate ESG waters. Its regulatory activity also contributes to ensuring that financing for sustainable investments becomes cheaper.

Reporting Guide in 2021 after a largescale consultation. Indeed, it was the first such endeavor in the entire region. The document deals with regulatory aspects, reporting standards and ratings, BÉT recommendations and how to prepare organizations for reporting.

ESG Training and Certification

The bourse didn’t stop at putting together that guide, though. Under its mentorship program, the organization gathered non-listed companies to gear them up with the knowledge needed to comply.

A one-day ESG training scheme drew more than 200 firms, while nearly 50 businesses participated in an ESG certification program based on a set of evaluation criteria put together by EY. Part of the latter package was a comprehensive ESG strategy.

But what if a BSE-listed company decides not to play by these rules? Would they face the threat of being delisted?

That won’t happen, experts confirm, but that doesn’t mean legal and investor expectations go away. It turns out, though, that many firms listed in Budapest take a somewhat more proactive stance.

“Companies often regard this not just as an obligation but an opportunity to stand out in the CEE region or appeal to their customer base,” Máté-Tóth says. “Not to mention that younger generations see tremendous value in green practices, so compliance can also help retain talent.”

The BÉT executive further highlights that you need to look at how the dynamics are evolving. Companies benefit if they grasp risks better, but legal and customer expectations determine what firms will invest in and at what price.

“This is the trade-off that needs to be managed,” Máté-Tóth notes. “You get a better overview of risks; the environment [also] benefits, and companies will be run more efficiently. In turn, you don’t invest as much as you would without these new regulations, or you do so by spending more. We don’t always manage this balance well, and ESG compliance alone won’t make everything great. But these [ESG] expectations are here to stay.”

The Unpleasant Impact of an Acronym Tsunami

ESG compliance undoubtedly boosts your company’s reputation and access to capital, but it comes at a cost. Many firms complain about having to hire entire teams to deal with reporting, an extra administrative burden that hampers global competitiveness. European sustainability rules also have a major impact on the allocation and cost of capital, increases capital costs in certain sectors.

BÉT deputy CEO István MátéTóth agrees that in the United States and Asia, regulators handle the issue entirely differently; ESG reporting obligations and the resulting capital allocation rules are a European thing.

“There are so many related regulations on the EU level that it’s more like an acronym tsunami,” he notes and points to the alternative Anglo-Saxon approach that instead tends to reduce red tape if an issue arises.

“Yes, it does trigger huge administrative costs, and it is at the political level that what is sustainable is decided. But the ESG framework aims to manage risks on the company management front, in particular, and so, if you comply, you will be able to handle those risks better,” he says.

Budapest Stock Exchange deputy CEO István Máté-Tóth.

Carbon Footprint Reduction Startup Goes Global, Backed

A Hungarian startup specializing in reducing the carbon footprint of digital marketing activities, including websites and email campaigns, has secured investment from Petya Balogh’s STRT Holding Nyrt. and two other backers. Carbon.Crane has developed innovative solutions to address the growing emissions from the 350 billion emails sent daily and 200 million active websites worldwide.

While digitalization is often perceived as environmentally friendly due to its reduction of paper use, the massive server farms behind our connected devices significantly contribute to global carbon emissions. In 2020, internet usage accounted for approximately 4% of global carbon emissions, a figure projected to double by 2025 and reach 14% by 2040. To put this into perspective, that 4% already matches the emissions of the aviation industry.

by STRT Portfolio

STARTUP SPOTLIGHT

Carbon.Crane’s services allow companies to measure the carbon footprint of entire websites, including those with hundreds of thousands of pages. The firm identifies high-emission elements, such as specific files or page components, and provides optimization recommendations. It also offers ongoing monitoring to address anomalies. Optimizing website elements, such as images, videos, text, and code, can result in significant energy savings, measurable emission reductions, and substantial cost savings for high-traffic websites. Clients include E.ON, MBH Bank, Spar, and the Budapest Festival Orchestra, with Mastercard leveraging the startup’s solutions in both Hungary and the United States.

For email campaigns, where only 20-22% of emails are typically opened, Carbon.Crane uses artificial intelligence to predict with 90% accuracy which recipients are unlikely to open their emails. This allows for shorter recipient lists, higher open rates, more efficient campaigns, and reduced emissions.

Sustainable Platforms

“We believe carbon emissions only decrease if actively reduced. Our service demonstrates how to make tangible contributions to our planet,” says György Huszics, CEO and co-founder of Carbon. Crane. “We aim to implement carbonefficient practices early, even during website development, to create sustainable

U.S., EU Take Different Climate Policy Paths After Trump Shakeup

The United States is radically changing its course on climate change, energy, and environmental policies. President Donald Trump signed a withdrawal from the Paris Agreement as one of his first steps upon entering office. What does this mean for the United States and the world, and how do world leaders react to the situation?

When we look at the broader picture, a new national energy emergency has been declared. There is a move away from current vehicle emissions standards and electrification, and, as the biggest headline, the withdrawal from the Paris Agreement has been announced. In his inauguration speech, President Trump emphasized producing more gas and oil, aiming for self-sufficiency and exporting energy globally, even surpassing the recordhigh crude oil exports of 2024. The political will is to bring down prices, fill up strategic reserves, and push forward commodity exports, including LNG.

On environmental regulations, there is a pushback on vehicle standards for standard and heavy-duty vehicles that would have otherwise been implemented in 2027. This move is claimed to create a more balanced playing field for technology neutrality in vehicle standards and is considered a step towards ending the broader Green New Deal. Meanwhile, the European Commission is preparing a Clean Industrial Deal, which, from a competitive standpoint, still requires a thorough review.

Looking at the Paris Agreement, born in 2015, which finally reached conclusions on international carbon markets at COP29 in Azerbaijan, supporting developing

countries financed by developed ones, Trump’s action is a recurring one, marking the second time he has pulled the United States out from it.

Maintaining Momentum a Necessity, Not an Option

World and UN leaders commenting on these changes have declared that the clean energy boom is unstoppable, where we might currently see wealth

digital platforms. We’re thrilled that STRT Holding Nyrt. shares our vision and has backed us as an angel investor.”

The company recently transitioned into a private limited company (Zrt.) with the help of angel investors, including Petya Balogh of STRT Holding Nyrt., Dénes Kovácsházy from Multicom Holding Zrt., and Ákos Dervalics. This funding will support their international expansion.

“Our goal was to find investors who value sustainability alongside profitability. With this investment, Carbon.Crane Zrt. is poised to advance its mission of creating a more sustainable digital future on an international scale,” says József Bodnár, Carbon.Crane’s managing director and co-founder.

“At STRT Holding, we invest in highgrowth startups with global potential,” notes Péter Langmár, chief investment officer at STRT Holding. “Carbon.Crane offers a unique solution to a critical problem, and their team’s passion and expertise make them an ideal fit for our portfolio.”

Carbon.Crane’s innovative carbon reduction solutions have received international recognition, including second place in the “Sustainability and Efficiency” category at the MediaSpace Global Changemakers’ Awards 2024.

shifting between countries rather than a real fallback. U.S. cities are strengthening their current and planned climate efforts through C40 and other city commitment communities as climate disasters, extreme weather events, and the risk of societal polarization are felt, leaving no option other than maintaining momentum. China is concerned with the United States’ fallback, as China needed time to commit to the Paris Agreement, and since their involvement, this is the second time the United States has withdrawn from it.

The European Commission has also communicated that its closest ally’s withdrawal is unfortunate. As before, the EU is expected to try to maintain momentum within the United Nations Framework Convention on Climate Change and the Paris Agreement. We shall see at what cost of actions and global competition this is feasible and whether we should expect a decline in ambitions, nationally determined contributions, or if there are national measures to balance the loss of international finance previously coming from the States.

In conclusion, actions are moving rapidly in opposite directions on both sides of the Atlantic. With 2024 the warmest year on record, business and political stakeholders are seeking clarity and common ground, observing more conservative economic approaches in climate and energy politics, among other areas.

From left, Péter Langmár, chief investment officer of STRT, György Huszics and József Bodnár, co-founders of Carbon.Crane, and Petya Balogh, CEO of STRT.

ÁKOS LUKÁCS

Ákos Lukács, EY partner, Climate Change and Sustainability Services

EU Taxonomy Becomes Basic Requirement

This year, companies will begin fully aligning with the EU Taxonomy, which aims to determine if an economic activity is environmentally sustainable. Firms will need to use enhanced reporting that accounts for eligibility and alignment. Crucially, businesses will also be required to provide the quality information necessary to execute these calculations.

accreditation option, followed by the U.S.-based Leed. Concerning interiors, office management and design issues, Well and Access4You are increasingly utilized. Reflecting the growing concern with ESG-related issues, more building owners strive to improve standing assets by opting for “in-use” accreditations.

“Sustainability certifications have been with us for over

30

years

and continue to evolve. Developing a certification system that makes projects comparable on a global level and sets a common standard for every building is challenging,” comments

Norbert Szircsák, head of ESG Advisory Services at Colliers Hungary.

community,” says Regina Kurucz, director of the Well Working Group at the Hungarian Green Business Council.

“New offices have to be flexible and measurable. For example, regarding ventilation, offices not only have to be energy-efficient but also have to provide real-time data about indoor air quality to users,” she explains.

She says a new attitude to managing a building space is necessary. “Provide fresh air in areas where people are present and really need it, not in the whole (partly empty) building. This new concept requires presence sensors and adaptive ventilation solutions,” Kurucz says.

like Access4you and the Well Equity Rating. Inclusive spaces are seen as a better environment for everybody, for example, people with strollers or with reduced mobility, the elderly and people with neurodiversity.

The Academia Office building, managed by ConvergenCE, is the latest office center in Budapest to be awarded Access4you accreditation.

“Our mission is to create an inclusive built environment by offering detailed access information to people with disabilities and supporting business growth through inclusion,” says Acces4You. By June 2025,

the European Accessibility Act (EAA) will become EU law.

Across all sectors, sustainability is no longer a differentiator but a necessity. Hungary’s alignment with EU taxonomy and ESG reporting requirements shapes investment decisions, tenant preferences, and regulatory frameworks. However, significant challenges remain, particularly in retrofitting existing assets and financing sustainability upgrades, comments Zsombor Barta, an ambassador for, and former president of, the HuGBC.

The new EU Taxonomy goals include directing investments towards sustainable projects and activities, navigating the transaction to a lowcarbon, resilient, and resource-efficient economy, providing certifications for investors and preventing greenwashing. The concept of sustainable financing means companies must take ESG considerations into account when making investment decisions in the financial sector, leading to an economy that is more sustainable in the long term. This year will see the first Corporate Sustainability Reporting Directive reports. This requires companies to report their sustainability impacts, risks, and opportunities, including their alignment with EU taxonomy. From an assurance perspective, the CSRD requires that the sustainability statements of reporting businesses, including their taxonomy reporting, be verified by an independent auditor. In the commercial real estate industry, the U.K.-based Breeam is clearly the most popular third-party office sustainability

“However, I believe the current trend of placing more emphasis on embodied carbon, operational carbon emissions, and potential net-zero strategies is a positive direction. Additionally, while social factors have always been part of these certifications, they are now gaining more focus and addressing the most relevant issues,” he says.

“I think it is crucial for various stakeholders to better understand these certifications and demand the implementation of the most sustainable features,” Szircsák adds.

Social Impact

The International Well Building Institute has a framework to measure the inward and outward social impact of a company. Well at Scale members receive custom annual reports for ESG reporting and a Well Score for organization-wide performance benchmarking.

“According to the Well Building Standard, a successful office development takes 10 concepts into consideration: air and water quality, nourishment, light, movement, thermal comfort, sound, materials, mind and

She says several hotels in Hungary are enrolled in Well certification, and Well Health and Safety Rating schemes, but the identities of these projects are kept private until the targets are achieved.

“Adapted from features in the Well Building Standard that focus on facilities maintenance and operations, the Well Health and Safety Rating is designed to guide and empower the actions of large and small businesses alike in taking the necessary steps to prioritize the health and safety of their staff, visitors and stakeholders for the long term,” the HuGBC expert says.

“It also serves as an annual process that supports efforts to promote the long-term health and safety of people. The Well for Residential program offers more than 100 strategies to create homes that prioritize resident health, comfort and well-being,” Kurucz notes.

“Designed to empower builders and developers, operators, architects and designers, and homeowners, the new health leadership framework is applicable to both single family homes and residences within multi-family buildings,” she concludes.

Inclusive Spaces

There will also be an increase in the provision of inclusive spaces in Budapest with interest in certified programs

“I believe the current trend of placing more emphasis on embodied carbon, operational carbon emissions, and potential net-zero strategies is a positive direction. Additionally, while social factors have always been part of these certifications, they are now gaining more focus and addressing the most relevant issues.”

EY says it sees the EU Taxonomy as “the creation of a classification system to provide a common language and clear definition of what a sustainable economic activity is.”

The Big Four consultancy adds, “This regulation outlines the criteria for an economic activity to be deemed environmentally sustainable, providing companies, investors and policymakers with precise details to determine whether an act can be considered environmentally sustainable.”

EY concludes: “The disclosure of information shows how and to what extent the company’s activities are associated with economic activity goals as environmentally sustainable and aligned goals.”

GARY J. MORRELL

The Academia Office building is the latest office center in Budapest to be awarded Access4You accreditation.

Hungary’s 1st Mandatory ESG Reports due for Publication in 2025

Obligations under Hungary’s ESG Act were phased in from the start of the 2024 financial cycle, with 2025 marking the year for the first mandatory ESG publications for all large, publicly listed enterprises.

2025 marks the first occasion of mandatory ESG disclosure due in Hungary, with an extensive list of obligations for the companies concerned. Although the requirement was only decreed recently, some companies had already noticed the advantages of focusing on these matters and, therefore, the disadvantages of disregarding them; they are further down (or more familiar with) the route all must travel.

“At the time of the first KPMG CEO Outlook survey in 2015, CEOs ranked environmental risk as the least important risk factor. By 2024, almost a quarter (24%) said that if they did not meet ESG requirements, competitors who did could be at an advantage. They ranked this risk ahead of threats to their own tenure (21%) and recruitment challenges (16%),” Julianna Nagy, senior manager of ESG and Sustainability Services at KPMG, tells the Budapest Business Journal

She adds that “76% of [executives say they] would be willing to divest a profitable part of the business that damages [ESG] reputation, while 68% say they would take a stand on a politically or socially controversial issue even if the board had concerns about it.”

“Until now, voluntary reporting defined the market dynamics,” agrees Ákos Lukács, EY partner of Climate Change and Sustainability Services. “Mostly self-motivated companies progressed in the field of sustainability, allocating resources to projects and actions,” he says.

However, with ESG disclosure now mandated, he describes 2025 as the “final phase in big efforts of disclosure [for public interest companies].”

Lukács adds: “This year also brings the second wave of companies into an active preparatory stage for reporting, which results in organizations changing focus and the necessity to determine new resource allocation. ESG has become the norm for bigger companies, [and] their ESG performance will determine their access to financial capital as well as influence public appreciation,” he notes.

Those companies preparing to publish their ESG disclosures are faced with a meticulous, time-consuming project, according to Anita SávolyHatta, partner responsible for ESG reporting at PwC Hungary.

Major Work Ahead

“In the coming weeks, not only consultants but also auditors will have a major task, as these reports will be audited for the first time,” she says.

“Preparing for this has mobilized significant resources in audit firms. Hundreds of hours of classroom and e-learning training, the development of work programs tailored to the audit of non-financial information, the ongoing interpretation of the European Sustainability Reporting Standards (ESRS), the organization of sustainability auditor certification and a large number of professional consultations have been undertaken to prepare for this task,” she explains.

“Compared to last year, there has been a noticeable shift towards more specialized ESG roles within organizations,” says Réka Szücs,

bring significant shifts in U.S. ESG policies,” according to Szücs. Nagy adds, “Hungarian ESG statement are complementary disclosures focusing on complementary areas.”

Lukács expects that “any matters from the U.S. will be directed to the EU, and through that to Hungary,” without any direct impact. “Luckily, the majority of large corporations already on their sustainability journey will hardly lower their commitments to action,” he predicts.

“ESG has reached a point where it’s a question of compliance, requiring dedicated resources with subject matter expertise,” concludes Szücs.

“Currently, ESG functions aim to ensure compliance with reporting and other disclosure obligations and thematic correspondence with their business partners and investors. As the ESG function is mainly governed by the performance of regulatory obligations, its future is highly connected to the regulatory changes, which we are expecting to occur, and market response to the growing availability of ESG data,” she adds,

It is important to note that the reporting criteria for ESG vary from the broader range of criteria of the earlier introduced Corporate Sustainability Reporting Directive.

the director of sustainability and climate services at Deloitte Hungary, of the pressure of publishing an ESG disclosure.

“The current trends are evolving rapidly, reflecting the growing importance of sustainability and ethical practices in the corporate world. The significant trend remains the increasing emphasis on compliance and reporting,” she says.

“Companies are increasingly dedicating resources to ESG departments or managers who possess subject matter expertise. This change highlights the growing recognition of ESG as a critical component of business strategy and risk management,” Szücs adds.

Sávoly-Hatta reflects on some of the concerns of market players, explaining, “Everyone in the market feels that compliance with EU ESG directives is extremely resource intensive. Perhaps this is why some EU member states are hesitant and delaying the implementation of the CSRD [Corporate Sustainability Reporting Directive] in their member states.”

As a result, “the European Commission announced at the end of 2024 that it intends to reduce the administrative and reporting burden for companies, starting with an ‘Omnibus Package.’ [It] aims to simplify and harmonize the three existing ESG regulations: the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU taxonomy,” she adds.

Global Influences

Regarding global political influences on ESG in Hungary, there is a “general expectation that the second Trump presidency may

“CSRD reporting and the Hungarian ESG statement are complementary disclosures focusing on complementary areas.

“At the time of the first KPMG CEO Outlook survey in 2015, CEOs ranked environmental risk as the least important risk factor. By 2024, almost a quarter (24%) said that if they did not meet ESG requirements, competitors who did could be at an advantage.”

CSRD reporting primarily highlights the company’s own sustainability performance, while the ESG statement focuses on suppliers and its supply chain. CSRD reporting is defined by the European Union’s Corporate Sustainability Reporting Directive, [while] the ESG statement is defined by the Hungarian ESG Act,” Lukács explains.

According to ACT Legal Hungary, the primary obligations of companies publishing their ESG statements this year are to describe the organization’s sustainability due diligence process, the social and environmental risks they’ve identified and measures the company has taken to offset these issues. The ESG disclosures must be uploaded to predefined data platforms.

LUCA ALBERT

Photo by Tirachard Kumtanom / Shutterstock.com

4 Socialite

The Brutalist Movement: Architecture, Hype and the Movie

Trundling toward Christmas last year, I started to see references to brutalist architecture in the U.S. and U.K. media. I read the name Marcel Breuer, registered the Hungarian connection and began to dig deeper. It took an embarrassing amount of time to realize that what I was reading was probably part of the PR for “The Brutalist” movie. After garnering glowing reviews and seven Golden Globe awards on Jan. 5, “The Brutalist” arrived in Hungarian cinemas last week.

concrete or brick and a limited color palette, brutalism claimed to be a reaction against 1940s architectural nostalgia. U.K.-based Hungarianborn architect Ernő Goldfinger was an early evangelist.

Brutalist architecture emerged in the 1950s as part of post-World War Two reconstruction. Minimalist and modernist, using unpainted raw

The name Goldfinger is perhaps most familiar as the arch-villain who gives the 1964 Bond movie its title. The real-life Goldfinger, born to Jewish parents in Budapest in 1902, was apparently a man with a sense of humor bypass, known to fire assistants who dared to be too cheerful.

When Ian Flemming’s book “Goldfinger” was published in 1959, the real Goldfinger threatened to sue but backed down after the author threatened to rename the character “Goldprick.”

The book inspired the third film in the Bond franchise; the movie celebrated its 60th anniversary in September last year.

Brutalism became popular in socialist Hungary in the 1960s. It was utilitarian, low-cost and

modern. To socialist architects, acres of concrete emphasized equality. The “panel” housing developments in Hungarian towns and cities are brutalist. Today, panel apartments are snapped up as they’re cheaper to heat and maintain than more traditional housing.

Searching for a deeper connection between Hungary and brutalism led me to Marcel Breuer, born in Pécs in 1902 to a Jewish family.

The furniture and buildings designed by the fictional László Tóth in “The Brutalist” are inspired by Breuer but his character most definitely is not.

Marcel Breuer was one of the first and youngest students at the Bauhaus, the German school that aimed to reunite art and craft in a style that was often geometric, angular and abstract.

After furniture and interior design, Breuer expanded into architecture. He moved to the United States in 1937 and became a naturalized citizen in 1944. Like the brutalists, Breuer loved raw concrete. Unlike them, he used it to create modern, shapely buildings.

The movement’s goal was to combine the artistry of the individual with the demands of function and mass production. In the 1920s, Breuer pioneered the use of tubular steel in furniture.

Chair of the Century Breuer’s 1925 “Wassily” chair, named for his artist friend Wassily Kandinsky, is clearly the model for the chair that Tóth designs for his cousin’s furniture store in the movie. The “New York Times” named the original one of the chairs of the century. Apparently, its design was inspired by Breuer falling off his bicycle and realizing how strong the handlebars were. I’d guess all of us have sat in a Breuer-designed chair at some time.

DAVID HOLZER

Director Brady Corbet (center) checks a take on location.

Adrien Brody as László Tóth.

After furniture and interior design, Breuer expanded into architecture. He moved to the United States in 1937 and became a naturalized citizen in 1944. Like the brutalists, Breuer loved raw concrete. Unlike them, he used it to create modern, shapely buildings such as the Geller House II in New York, the Amstrong Rubber Company HQ in New Haven and the Whitney Museum of Modern Art in New York.

Breuer became a leading exponent of the utilitarian, functional and minimalist International Style, which began in

Europe in the 1920s and dominated until the 1970s. His work was sometimes controversial. When it was unveiled in

1966,

the Whitney Museum was described by architecture critics as “oppressively heavy” and “an inverted Babylonian ziggurat” (a pyramidal stepped temple tower).

But his personal life seems to have been pretty uneventful, certainly compared to that of Tóth as portrayed in the film by Adrien Brody, son of noted Hungarian-

American photographer Sylvia Plachy. Interviewed by the Dezeen website, Brady Corbet, the 36-year-old wunderkind director of “The Brutalist,” said that brutalism “was the correct style of architecture in terms of the film’s visual allegory and what it is exploring thematically.”

Corbet’s rationale is that brutalism wasa style practiced by Jewish immigrants to the States and the United Kingdom, such as Breuer and Goldfinger. The response to, say, the Whitney building “provokes the same feelings [in the community] as it does about their new neighbor coming from a different background.”

Hence, the public response in the movie when Tóth and his patron, filthy rich industrialist Harrison Lee Van Buren (played by Guy Pearce), show their designs for the community center they plan to build.

Monumental Perfectionism

The monumental building, created by the perfectionist and not especially likable Holocaust survivor Tóth for the unsavory Van Buren, is almost a character in itself. Production designer Judy Becker tapped into her own knowledge of brutalism to design a building that included a community center and Protestant chapel while smuggling in references to the concentration camps

Tóth and his wife Erzsébet had spent time in. Studying bird’s-eye images of concentration camp plans, Becker noticed that they were primarily designed in “kind of a T shape. It was a T, but it was also a cross, and I really started thinking about the symbolism.”

The building Becker designed for the movie was built in Hungary, where “The Brutalist” was mostly shot, apart from a sequence in the massive marble mines of Carrara, Italy, where Van Buren assaults Tóth, bluntly articulating the theme of the movie: art abused by commerce.

As for “The Brutalist” itself, I was impressed by the fact that its budget was a measly

USD 10 mln, and by the acting. But even at an epic three and a half hours, it felt like it had been hacked down from a much longer length. So, I was surprised to read Corbet’s remarks about creative freedom when he accepted the movie’s Golden Globe award for Best Dramatic Film.

“My partners on this film were incredibly supportive, and I didn’t have any antagonists in the process,” he said. These partners included Budapest-based Proton Cinema.

And to be fair, even if “The Brutalist” feels to me like a series of set pieces strung together, it’s never boring.

Guy Pearce as Harrison Lee Van Buren.

in Brief News Culture

House of Music Hosting Festival for Upgraded Sound Dome Reopening

The House of Music hosted a festival to mark the reopening of its completely upgraded “immersive” cinematic room, the Sound Dome, the organizers said in a press release. The festival, dubbed Dome_Reload, offered an audiovisual program series from Jan. 14-19. “Since the opening of the House of Music three years ago, the 30-minute immersive films have attracted more than 170,000 viewers. The repertoire included 27 such titles,” director Márton Horn said. Among the films shown again are Hungarian composer Tibor Szemző’s “Csoma Kaleidoscope” evoking the journey of explorer Sándor KőrösiCsoma to the Himalayas, “Poeme Symphonique For 100 Metronomes,” which pays tribute to world-renowned composer György Ligeti, and art films on Renoir, Bosch and Tivadar Csontváry.

Olympic Champion Katinka Hosszú Retires

Three-time Olympic champion swimmer Katinka Hosszú announced her retirement in a post on Facebook on Jan. 9. At the height of her career, Hosszú won the gold medal in the 100 meters backstroke and 200m and 400m individual medley events at the Rio Olympics in 2016, setting a new world record in the latter. She capped off her outing in Rio with a silver medal in the 200m backstroke. The 35-year-old athlete is also a nine-time world champion.

Gyula Castle Baths Undergoing

HUF 1 bln Upgrades

The Gyula Castle Baths (215 km southeast of Budapest) has started a series of upgrades worth more than HUF 1 billion, director Miklós Kun

said on Jan. 13. He noted this is the third phase of an overall development program funded by a HUF 3.2 bln grant from the Hungarian Tourism Agency that covers 90% of the costs. In the latest phase, a building built in 1833 will be renovated, the mud and hydrotherapy department and weight baths will be reconstructed, and flooring tiles will be renewed. The spa is contributing HUF 320 million of its own funds to the costs of the upgrade, and local company Futizo will undertake the construction, Kun added.

Hungarian Researchers Make Progress With Neurological Diseases

The latest discovery by Attila Losonczy and his research team may open new horizons in treating aging and neurological diseases. The joint research by the Zuckerman Institute of Columbia University in New York, the BrainVisionCenter led by Balázs Rózsa, and the Hun-Ren Experimental Medical Research Institute has yielded a revolutionary result. With the help of a Hungarian-developed 3D laser scanning microscope, it was possible

Magyar Posta Issues Stamps Marking Chinese New Year of the Snake

Magyar Posta issued a set of stamps on Jan. 21, marking the Chinese New Year, with the 12th and final stamp in the series depicting the Year of the Snake. At the ceremony held at the Chinese Cultural Center in Budapest, Deputy State Secretary for State Assets Géza Láng, who is

also a member of Magyar Posta’s board of directors, noted the longstanding friendship between the Chinese and Hungarian peoples. He added that 2024 had been a highlight of China-Hungary relations, as the two countries celebrated the 75th anniversary

of establishing diplomatic ties and Chinese President Xi Jinping visited Hungary. Mutual respect, Láng said, was embedded in cultural relations and was the “foundation of our economic cooperation,” noting the comprehensive strategic agreement signed between the two countries.

for the first time to observe the “birth” of memories in a living animal in a fraction of a second, in structures a hundred times thinner than a human hair. The study was published in the prestigious journal Nature.

Debrecen Uni Opens Advanced Research Lab at Szolnok

The University of Debrecen (225 km east of Budapest) has inaugurated a state-of-the-art research laboratory at its Szolnok campus (105 km southeast), enhancing opportunities for faculty and students to engage in laboratory-based research, according to profitline.hu. The facility is equipped with modern instruments capable of nucleic acid measurement, facilitating advanced studies in pathogen and gene detection, bacterial culturing, and antibiotic resistance. This development aims to produce significant research outcomes, leading to publications and enabling campus professionals to participate in international scientific endeavors.

Bulgaria, Hungary Launch Cooperation in Higher Education, Science

The Bulgarian Council of Ministers has approved a program for cooperation in higher education and science between Bulgaria’s Ministry of Education and Science and Hungary’s Ministry of Culture and Innovation for 2025-2027, according to Bulgarian news agency BTA. The program will enable the parties to continue exchanges of undergraduates, doctoral students and researchers and to host Bulgarian and Hungarian language lecturers on a reciprocal basis. The program envisages the joint development of scientific research projects enlisting Bulgarian and Hungarian scientists. The idea is to encourage the partnering national scientific organizations to share in research and innovation projects under European framework programs and other initiatives.

University of Szeged Pioneering Innovative Cancer Treatments

The University of Szeged (SzTE) is at the forefront of introducing advanced medical procedures in Hungary, particularly in cancer treatment, the public relations directorate of the higher education institution has said. Interventional oncology (a minimally invasive approach utilizing imaging tools like ultrasound, CT, and MRI) is being developed to enhance patient care. Although common abroad, these methods are not yet widespread in Hungary. SzTE has been employing electrochemotherapy for years, offering targeted therapy through electrical impulses. Professor György Lázár, dean of the medical school, emphasized the global rise of interventional radiology in oncology and aims to establish SzTE as a national center for such treatments.

Deputy State Secretary for State Assets Géza Láng (left) and Ambassador of the People’s Republic of China Gong Tao, at a ceremony marking the issue of new special edition stamps on Jan. 21. For the 12th time, Magyar Posta has issued a stamp design with Chinese horoscope motifs to mark the Chinese New Year.

Photo by Noémi Bruzák / MTI

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

Italian Chamber of Commerce for Hungary (CCIU)

The CCIU will host a unique evening in March celebrating the elegance and tradition of the Venetian Carnival in an event that unites Venice and Budapest in a fusion of culture, style, and sophistication. The evening will pay tribute to the Made in Italy heritage and the meeting of Italian and Hungarian traditions. The celebration coincides with a special event: the inauguration of Wizz Air’s new route from Budapest to Venice. The Venetian Carnival, with its masks, dances, and music, will provide the perfect stage to launch

this new air bridge, which will not only enhance travel and tourism but also strengthen cultural and economic ties. Guests will be immersed in a magical atmosphere where elegance and tradition intertwine, featuring lavish costumes and stunning masks. The event will showcase Italian culture with traditional Venetian dishes and a performance reflecting the rich history of both cities. It offers an opportunity to explore the best of Italian and Hungarian culture.

• When: March 1 • Where: Budapest Marriott Hotel, Apáczai Csere János utca 4, Budapest 1052

Belgian Business Club in Hungary (Belgabiz)

Belgabiz hosted its New Year’s Networking Reception at Hotel Vision in Budapest on Jan. 16. The event brought together professionals for an evening of connections, conversations, and laughter. Guests enjoyed a buffet and drinks, including La Trappe Blond Belgian beer provided by Belga Sörmester. It was also an opportunity to welcome new club members joining this year. At the same time, the club bid farewell to Edit Ránky, former economic and trade counselor of the Wallonia Export and Investment Agency and hub.brussels, a member of the management board of Belgabiz since its foundation. However, she will remain part of the business club community as a private member.

Swiss-Hungarian Chamber of Commerce (Swisscham)

Swisscham will organize its traditional year-opening networking event for 2025 in the framework of the 30th-anniversary celebrations. The event will begin with brief introductions from 10 members, including new and long-standing firms. The program will continue with informal discussions, offering an excellent opportunity to build valuable connections and form new acquaintances. Member Emil Frey Hungary provides the venue, its Toyota Showroom, where guests can view the displayed cars and enjoy snacks and refreshing drinks, ensuring a truly special experience.

• When: Feb. 13, 5-7 p.m.

• Where: Emil Frey Magyarország Kft., Toyota Showroom, Mogyoródi út 34-40, Budapest 1149. • Fee: Members free; non-members HUF 20,000.

A presentation of the most important tax changes for the coming year, with a special focus on significant tax and audit trends affecting the business sector, will be given by Viktor Szabó, WTS Klient tax partner and a chartered tax expert.

• When: Feb. 5, 3-4:30 p.m,

• Where: WTS Klient Office building, StefániaPark 2nd floor, Rubik Ernő meeting room, Stefánia út 101-103, Budapest 1143 • Fee: Members free; non-members HUF 20,000.

British Chamber of Commerce in Hungary (BCCH)

The BCCH invites guests to its first event of 2025, the latest edition of the CEO Dinner, to be held in February, where the speaker will be Péter Szabó, managing director of Centrica Business Solutions. The event combines a three-course dinner with wine and welcome drinks while hearing the views of a foremost professional on recent developments and current industry affairs. BCCH chairman Duncan Graham will give the opening remarks. Centrica Business Solutions plans, develops, and finances energy-efficient, sustainable and renewable solutions for customers worldwide. The firm aims to ensure cost savings and help the net zero transition, energizing a greener, fairer future. Péter Szabó has

a lifelong interest in energy, what makes things work, and what makes them more efficient. He joined Centrica’s legacy Hungarian business as corporate development manager 18 years ago and has managed the Hungarian team in various roles. He recently became a Centrica director in the United Kingdom and, as a result, possesses first-hand knowledge of the U.K. energy market landscape and challenges, which gives him an outstanding opportunity to bring new ideas to the Hungarian market.

• When: Thursday, Feb.13, 6-8 p.m.

• Where: Matild Palace Hotel, Váci u. 36, Budapest 1056 • Fee: Members HUF 28,000 (plus VAT); non-members HUF 38,000(plus VAT)

German-Hungarian Chamber of Industry and Commerce (DUIHK)

The DUIHK invites members to an English-language presentation of the Friedrich-Ebert-Stiftung study “The Chinese Economic Presence in Hungary” and a roundtable discussion. Hungary has attracted significant foreign investment from countries in the Far East under its “Eastern Opening” policy. Chinese investments particularly stand out due to their large scale, fast pace and strong footprint in the automotive sector. The study gives an overview of current investments and projects and their impact on the Hungarian labor market and other factors. The study will form the basis for the roundtable discussion with experts on Eastern investment into Hungary, as well as offering industry insights in the automotive and battery sectors.

• When: Thursday, Feb. 6, 9-10:30 a.m.

• Where: German-Hungarian Economic House, Lövőház u. 30., Budapest 1024 • Fee: Members free; non-members HUF 15,000 (+ VAT).

Hungarian-French Chamber of Commerce and Industry (CCIFH)

The CCIFH year-opening business lunch will feature Minister for Economic Affairs Márton Nagy on the 2025 economic outlook for Hungary. The event is in cooperation with the Austro-Hungarian Business Council, the Irish-Hungarian Business Circle, the Belgium, British, Bulgarian, Dutch, Finnish, German, Italian, Romanian, Swedish and Swiss chambers of commerce, the Joint Venture Association, and the Hungarian Logistics, Purchasing and Stockholding Company. The professional partner of the event will be Mapi Magyar Fejlesztési Iroda Zrt. The language of the event will be English, without translation.

• When: Feb. 6, 12:30-2 p.m. • Where: Anantara New York Palace Budapest Hotel, Erzsébet krt 9, Budapest 1073. • Fee: Members HUF 34,900 (+ VAT); non-members HUF 52,200 (+ VAT).

Canadian Chamber of Commerce in Hungary (CCCH)

The CCCH, in collaboration with Hold Alapkezelő Zrt., will hold a business breakfast focusing on the uncertainties surrounding the economic policies of the new Trump administration. Will the second Trump presidency, under an umbrella of massive reforms, usher in a new era of government efficiency, productivity growth and a rebirth of the American dream, as so many hope? Or is the United States tiptoeing through a highstakes poker game into a hardline nationalist and protectionist state with no appetite for dissent, resembling the hard-right governments of the 1930s? We will try to make sense of what to expect, but extreme outcomes on both foreign and economic policy fronts seem almost inevitable.

• When: Thursday, Feb. 13, from 8:30 a.m.

• Where: The Hold office, Alkotás utca 50, Budapest 1123. • Fee: Members HUF 14,900 (+VAT); non-members HUF 24,900 (+VAT). Breakfast and business networking are included.

Opening a business doesn’t make you a businessman.