Hungary formalises ESG enforcement by adopting SARA fines decree

Hungary has taken a decisive step towards practical environment, social and governance (ESG) framework enforcement by adopting Government Decree 276/2025 (VIII. 21.) on the rules for imposing fines for a breach of the ESG Act (Act CVIII of 2023).

The Decree, which is eagerly anticipated by the market, lays down the detailed rules on the amounts and criteria of the fines to be levied by the Supervisory Authority of Regulated Activities (SARA). The new rules introduce transparent and proportionate penalties, clearing up the uncertainty for businesses around the consequences for non-compliance with the ESG Act. The Decree will enter into force on 6 September 2025.

When can SARA fine a company?

Under the ESG Act, SARA may issue an administrative fine whenever an entity violates a statutory obligation under the ESG Act or its implementing decrees. The Decree, however, introduces specific fines for breaching different obligations under the ESG Act, including the following:

• carrying out or offering ESG contributor services without proper authorisation: HUF 200,000 to HUF 10 million;
• making unauthorised ESG data requests (i.e. seeking supplier data outside the scope of the ESG questionnaire, not in line with or without SARA’s authorisation or seeking supplier data from micro- or small enterprises before 30 June 2027): HUF 1 million and up to 1% of the company’s net turnover, capped at HUF 50 million;
• failing to submit the obtained ESG data to SARA (including changes to contracted ESG contributor data): HUF 200,000 to HUF 2 million; and
• failing to provide the direct suppliers with preparatory programmes for completing ESG questionnaires: HUF 200,000 to HUF 3 million.

Multiple breaches can be aggregated and for repeated infringements or non-compliance with SARA’s obligation, fines may be imposed repeatedly. Once SARA’s decision becomes final, the fine must be paid within eight calendar days to the treasury account specified in the ruling.

How will SARA calculate the exact amount?

When calculating the exact amount of the fine, SARA will consider the following:

• the harmful effects of the infringement on the promotion of sustainable development and the strengthening of environmental and social responsibility; and
• any good-faith remedial steps undertaken by the company before the authority intervened.

In addition to the adoption of the Decree, several other implementing decrees that regulate the education and accreditation criteria for ESG consultants have also been amended.

For more information on how the Decree could affect your organisation, contact your CMS client partner or these CMS experts:

This article was co-authored by Lili Benyovszki.