While it used to be a matter of principle to enforce sustainability and ESG requirements, they have now become an integral part of business operations. As competitiveness, business continuity and risk management are increasingly impacted, this increases the strategic importance of ESG communication, and this is even more so in the current rapidly changing environment.
The ESG compliance discourse has become increasingly complex and sensitive in recent years due to a number of factors.
The first is the tightening and rapid spread of sustainability requirements, which we have experienced both in the international context and in Hungary. Economic and social pressures for transparency and accountability, as well as the need to meet annual reporting and annual commitments, have also played an important role, as differences in interpretation have been a recurring agenda item.
Changing ESG dynamics
However, the sustainability discourse does not call into question the relevance of the ESG concept: instead, it highlights the key role of professional, targeted and consistent communication. Primarily by helping to provide a framework for interpretation and build trust among different stakeholders. Secondly, because there are new regulatory developments in the period ahead for which companies need to prepare and prepare their stakeholders in good time.
The European Union has taken steps in recent months to simplify the sustainability framework. The Omnibus package aims to reduce administrative burdens and simplify ESG reporting, especially for companies that have not yet established a structured ESG reporting system. While this is a step forward, it is not enough: as changing rules are rewriting compliance requirements, credible, targeted communication is needed both internally and externally to ensure that ESG messages are effectively understood and incorporated.
Changing conditions for ESG communication
A diverse range of stakeholders
ESG issues now resonate with a wide range of stakeholders - be they investors, decision-makers, business partners or suppliers. This also implies that established templates and generic sustainability messages are no longer effective enough.
Leadership and corporate culture
The communication attitude and personal commitment of managers are key to successful ESG integration. It is important that they represent the values authentically and lead by example. Also crucial in ensuring credibility and compliance is the professionalism and commitment of the employee in charge of ESG processes.
Fragmented communication space
Rapid and superficial content consumption and information noise make it even more difficult to find a common language. In this environment, it is particularly difficult to find a common language that fosters collaboration - when this is what is most needed.
Three main roles of strategic ESG communication
Providing a framework for interpretation
To avoid that sustainability remains an abstract concept, especially for some internal units of the organisation or external partners, ESG communication helps to make ESG more understandable and contextual, providing a professionally sound explanation both internally and externally.
Building trust
Transparent, credible communication reduces reputational risks and helps avoid accusations of greenwashing.
Increasing internal support
ESG strategies are effective when they are embedded in day-to-day operations. A prerequisite for the latter is that all stakeholders understand their role - and ESG communication has a key role to play in this.
Sustainability reporting: a key factor in ESG communication
This flagship document is now an essential part of transparent and credible corporate ESG communication, providing strategic guidance for achieving sustainability goals. Meanwhile, the Sustainability Report presents all relevant aspects of a company's operations - such as green investments, corporate social responsibility or corporate governance practices - in a comprehensive way, based on organisation-specific data and in line with the latest regulations.
When preparing sustainability reports, it is of utmost importance for companies to take into account the relevant regulations, such as the CSRD (Corporate Sustainability Reporting Directive), which will be mandatory in Hungary from 2024, and the updates of the GRI (Global Reporting Initiative) framework expected in 2025. These will ensure that reporting is internationally comparable, transparent and reliable.
Certification reinforces credibility
In order to prepare a credible sustainability report, it is advisable to take into account the opinions of independent auditors, ESG rating agencies and sustainability experts. The credibility of the report is further enhanced if it is certified by an accredited organisation or a recognised certification body. A formal ESG or sustainability certificate significantly increases the reliability of the report and makes it easier to keep abreast of changes in the Hungarian and EU regulatory environment, which companies need to keep abreast of.
Sustainability reporting is no longer just a legal requirement: it is also a fundamental condition for organisational credibility, market competitiveness and social trust. Companies that are prepared in a timely and considered way for the challenges this entails will do much to ensure their long-term sustainability and success.
Like the sustainability regulations published in 2021 or the introduction of the CSRD in 2024, the GRI updates planned for 2025 aim to make reporting more transparent, comparable and relevant. This could translate into very tangible competitiveness benefits by impacting on financial and business aspects in addition to social and environmental aspects.
You can't do it without conscious planning
As with all aspects of sustainability, strategic planning is essential for ESG communication. And it is not just about what we say, but also how, to whom, when and in what form. It's important to tailor messages to target audiences, to build a narrative based on business realities and to communicate corporate values consistently.
A credible commitment to sustainability goes beyond PR activities - it becomes truly effective when it is embedded in organisational strategy and operations.
Moore Hungary
Moore Global, which started in a London office more than 110 years ago, is now one of the world's leading consulting and audit networks. Present in over 110 countries worldwide, the network has more than 550 independent offices and over 37,000 employees. The group's turnover for the last financial year exceeded $4.5 billion.
With a team of nearly 200 experts, Moore Hungary offers a full range of consulting services in the fields of business, finance, M&A, legal, tax, accounting, hotel and tourism, ESG, NIS2 industry consulting and auditing.
In our fast-changing world, Moore provides strategic guidance and practical advice to help clients navigate and understand the complex regulatory and changing market environment and industry conditions, and thereby find the best solutions.
More information about Moore Hungary and its services is available on the consultant's website: www.mooreglobal.hu.
Follow us on LinkedIn for more news!
