Hungarian companies becoming more future-conscious

Hungarian companies are becoming more future-conscious; however, their motivation is different from that of foreign companies.

Four out of five industrial companies in Hungary use the help of a sustainability expert to achieve their green goals. The activities that enhance sustainability are mostly focused on waste management (95%), energy efficiency (85%), and water management (78%), as the recent survey conducted by Siemens Zrt. reveals.

The companies surveyed mostly pay attention to environmentally responsible operations and do their part in social responsibility; however, they point out the lack of resources as the main obstacle: almost half (45%) have applied for external support to achieve sustainability goals. Sustainability is therefore an increasingly important issue for domestic firms, but their underlying motivation is different from that of companies with foreign ownership.

Survey by Siemens Zrt.

Siemens Zrt. conducted a comprehensive survey (in-depth interviews and questionnaires) among Hungarian industrial companies with more than 20 employees or a turnover of HUF 1 billion. The survey revealed that sustainability plays a key role in the lives of Hungarian companies, and they are trying to keep future awareness in mind in their daily operations. The larger the market share, the more likely a company is to devote significant energy to environmental awareness and social responsibility, and organize its related activities around a central strategy. Overall, 54% of the survey respondents have a sustainability system/policy in place, and 80% work with a full-time/part-time (17%) or external (30%) expert, or have someone in-house (33%).

Slowly but surely – the lack of resources is the biggest challenge

In terms of sustainability, 59% of responding companies have short-term plans and 42% have long-term plans, with a general focus on waste management (95%), energy efficiency (85%), and reducing water and air pollution (78%), while it is also increasingly important to preserve biodiversity (61%), use verifiable resources (58%), and develop products with sustainability in mind (57%).

Companies are satisfied with their own efforts, with two-thirds saying that they are doing similarly to their competitors in this area, and one in five thinking they are doing more than the other market players to ensure a sustainable future. The vast majority of the surveyed firms also claim to be involved in corporate social responsibility, mainly through charities and sports organizations.

“According to their own admission, Hungarian industrial companies have so far achieved the greatest results in the fields of installing solar panel systems, selective waste collection, and reducing water consumption, but sustainable procurement is also playing an increasingly important role: more than two-thirds (70%) of companies take this into account when selecting their supplier partners,” says András Simon, energy efficiency expert at Siemens Zrt.

One in five of the companies surveyed sees the lack of resources as the biggest problem, and 14% expressed that there are no or not enough tenders for sustainability investments, meaning they are looking for external help to improve their own sustainability. At the same time, the more people a company employs, the lower the proportion who say that their sustainability investments are hindered by financial constraints, high investment costs, or lack of tenders.

Foreign firms are still leading in terms of perception

The survey also asked what factors influence companies to develop or improve their sustainability policies. Respondents cite the media (43%) and the information and trends it makes available, as well as professional contacts and channels (41%) as a source of inspiration, but it also turns out that in many cases, guidance comes from management (36%) or head office (33%).

It is important to note that domestic firms are still primarily motivated by external pressures to achieve sustainability goals, mainly with regulatory requirements (44%), followed by business interests (19%) and societal/customer expectations (16%).

This differs quite a lot from companies with foreign ownership, which have a much higher proportion of sustainability experts and strategies, as well as short- and long-term objectives, and are driven more by internal expectations and real commitment. Among them, there is also a strong owner-investor expectation, as the European Union will introduce new corporate ESG (Environmental, Social and Governance Framework) reporting requirements in a phased approach from 2024, which will also be an important assessment criterion for bank financing in the future.

We are just familiarizing with the carbon footprint

The survey revealed an interesting finding about the calculation and importance of the carbon footprints, with 39% of respondents saying that corporate information on carbon footprints will be a competitive advantage in the future, while 73% had not yet done such a calculation. Furthermore, only one in ten industrial companies can say how big their carbon footprint is, and nearly half of the respondents do not care how much their products pollute the environment.

Companies at the forefront of this issue are almost invariably aware of the concept because they provide data on the issue to the foreign parent company. Thus, there is room for improvement, but it is also clear from the survey that sustainability is an increasingly important issue for domestic companies as well.

“There are a number of simple, practical steps that any market player can take to succeed in the long term in a world with a sustainable vision. Companies are already taking steps to achieve this: they are paying attention to waste collection and recycling, smart water management, energy efficiency, or even optimizing the number and frequency of business trips – all of which are cost-cutting factors as well.

It is important to note that a more comprehensive approach will be needed in our country to make a real breakthrough. It will be more and more important to increase employee education and overall organizational commitment, and to set specific metrics for short- and long-term goals, but digital developments such as product-level carbon footprint calculations and communicating them to customers will also be of great help. This can also be a competitive advantage to attract more conscious consumers,” adds energy efficiency expert András Simon.

Featured image: illustration

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