Hungary: The new ESG recommendation of the National Bank of Hungary has entered into force

01 Jul 2025    2 minute read
ESG Credit Risk Management NBH Recommendation National Bank of Hungary Sustainability Reporting FSG

In brief

On 1 July 2025, the new recommendation of the National Bank of Hungary (NBH) on the use of a minimum set of questions to assess environmental, social and governance information in the underwriting, measurement, management and control of credit risk entered into force. The new recommendation is an updated version of the NBH recommendation published on 24 September 2024, which mandated the use of the minimum questionnaire specified by the NBH for financial institutions and branches of foreign financial institutions in the case of corporate lending.

Contents

In more detail

The revised recommendation clarifies and supplements, inter alia, the definition of ESG risk, the minimum content of the database maintained by financial institutions, and the expectations regarding the handling of group-level ESG information. In addition, the ESG questionnaire itself has also been modified.

The updated recommendation also clearly defines who qualifies as credit applicants and foreign credit applicants covered by the recommendation.

A credit applicant is a company with a registered seat in Hungary, including branches established in Hungary, which:

  1. Is not a financial service provider regulated by the ESG Act, such as a credit institution, investment firm or insurance company;
  2. Is subject to individual or consolidated sustainability reporting under the Accounting Act or to individual or consolidated ESG reporting under the ESG Act; and
  3. Has at least one sustainability report or ESG report already published.

A foreign credit applicant is any company that does not have its registered seat in Hungary, does not operate a branch in Hungary, and which does not qualify as a credit applicant company.

The new recommendation also allows financial institutions to obtain the necessary ESG information not only from questionnaires completed by the companies and from official public registries, but also from external data providers.

The NBH expects the recommendation to be applied as follows:

  1. For new corporate lending exceeding the contract amount of HUF 500 million, from 1 July 2025;
  2. For new corporate lending exceeding the contract amount of HUF 350 million, from 1 July 2026;
  3. For new corporate lending exceeding the contract amount of HUF 200 million, from 1 July 2027; and
  4. For new corporate lending exceeding the contract amount of HUF 100 million, from 1 July 2028.

Financial institutions will continue to have the option, for prudential reasons, to apply the requirements of the recommendation to additional companies, for lower contract amounts, or from earlier dates than those set out in the recommendation.

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Click here to read the Hungarian version.

Contact Information
Dr. József Vági
Partner
Budapest
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jozsef.vagi@bakermckenzie.com
Andras Szondy
Associate
Budapest
andras.szondy@bakermckenzie.com

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