Changes affecting ESG regulation in Hungary can be expected as a result of the 17th amendment to the Fundamental Law, which was published yesterday on the National Assembly’s website. In this post, we will review these potential changes.

The Amendment Concerning Independent Regulatory Bodies and Its Implications

From the perspective of ESG regulation, the most significant amendment may be Article 8. It contains a transitional provision related to the planned termination of the legislative powers of independent regulatory agencies. Among these independent regulatory bodies is the Supervisory Authority for Regulated Activities (SZTFH), which, under the authority granted by the ESG Act, currently acts not only as a supervisory authority but also as the primary, autonomous regulator in this field. 

Under the proposed amendment to the Fundamental Law, the SZTFH would lose its special status as an “independent regulatory body” enshrined in the Fundamental Law, which is independent of the Government. According to the explanatory memorandum for the proposal, the current regulation of these bodies “unnecessarily grants a broad exemption from the requirement of democratic legitimacy.” The ESG Act also currently contains such a provision, and this justification may indeed be applicable in that case as well, but I will address that in a separate post.

In addition to Article 8, Article 1 of the proposal would amend Article T(2) of the Fundamental Law, which lists the relevant legislation. Decrees issued by the head of the independent regulatory body would be omitted from this list. Although the proposal concerns the Authority’s status and legislative powers, the Authority as an institution would likely continue to operate in a different form (e.g., as a central office or a ministry-affiliated agency), but under the more direct control or supervision of the Government. 
With the 17th amendment to the Fundamental Law, the SZTFH’s current broad autonomy and independent legislative authority are also expected to be abolished effective January 1, 2027.

What changes might this bring to the ESG Act and related legal sources?
Under the proposal, ESG-related regulations previously issued by the Authority’s president will remain applicable after January 1, 2027; however, the Authority’s status as an independent legislator will cease on that date; regulations in effect as of December 31, 2026, must continue to be applied as law until they expire (or are subsequently repealed). This ensures that the detailed rules applicable to market participants do not become null and void overnight, which would create a legal vacuum. Since the SZTFH’s regulatory authority will cease to exist, it will certainly be necessary to amend the ESG rules, as these rules specifically mention the SZTFH. This is particularly true if the SZTFH itself is dissolved.

Expected changes to the ESG rules issued by the SZTFH president

These include:

SZTFH Decree No. 5/2024 (June 14) on administrative service fees for accreditation tasks—that is, the decree concerning administrative service fees paid by consultants, certifiers, and qualifiers,

SZTFH Decree No. 11/2024 (August 8) on the procedural rules for the accreditation of ESG consultants and the registry of ESG consultants,

SZTFH Decree No. 12/2024 (August 15) on the registry of ESG reports, ESG raters, and ESG software,

SZTFH Decree No. 13/2024 (August 15) on the detailed rules for companies’ compliance with sustainability due diligence obligations—that is, the decree on the content of ESG reports,

SZTFH Decree No. 15/2025 on the register of ESG certifiers.

It is important to note that these decrees will not cease to be in effect on January 1, 2027. According to the proposal, they “shall be applied as legislation until they are repealed.” Thus, the accreditation of ESG consultants, the maintenance of registries, and the collection of fees will continue under these decrees until they are amended, if at all. However, after January 1, 2027, the president of the SZTFH will no longer be able to amend these regulations or issue new ones. If refinements to the ESG regulations are needed (e.g., new technical details for reporting), these can only be made at the ministerial or government decree level.  Furthermore, since the SZTFH’s regulatory authority will cease to exist, the legislature will likely need to transfer the content of these regulations to the level of ministerial or government decrees by 2027 to ensure long-term sustainability.

Expected Changes to the ESG Act, NGM Decrees, and Government Decrees

These include:

Act CVIII of 2023, the so-called ESG Act

NGM Decree No. 29/2024 (August 8) on the requirements for accreditation as an ESG advisor

NGM Decree No. 30/2024 (August 8) NGM Decree on the requirements for the accreditation of institutions training ESG advisors, on the detailed procedural rules for maintaining a registry of accredited training institutions, as well as on ESG advisor training and the fees for training and examinations

Government Decree No. 244/2024 (August 8) on the detailed procedural rules for the accreditation of institutions training ESG advisors

Government Decree No. 276/2025 (August 21) Government Decree on the rules governing fines that may be imposed for violations of corporate social responsibility rules designed to promote sustainable financing and uniform corporate responsibility, taking into account environmental, social, and societal considerations (the so-called “Fines Decree”)

Government Decree No. 424/2025 (December 23) on requirements for ESG certifiers and the activities performed by ESG certifiers 

These rules are not directly affected by the amendment to the Fundamental Law, as the law, the government decree, and the ministerial decree remain part of the legal system.The ESG Act remains the foundation of ESG regulation. However, pursuant to Article 10 of the amendment to the Fundamental Law, a significant portion of the “cardinal” designations in the Act may be eliminated, meaning that in the future, the ESG Act will become easier to amend even by a simple majority. The NGM and Government Decrees will remain in force unchanged and will continue to be amendable by the issuing authority (the Government or a Minister).

Summary, Conclusions, and Another Regulatory Twist
Under the proposal, the SZTFH’s status as an independent ESG authority will cease, and sustainability oversight will, as things stand, come under direct government control in accordance with the current status of the amendment to the Fundamental Law. This means that the oversight of the Authority responsible for maintaining ESG registries will change: it may come under the direct control of the Government or be merged into a ministry (e.g., the Ministry of Economy and Energy).Although the SZTFH is expected to cease to exist as an “independent regulatory body,” the SZTFH regulations will remain in force. Thus, for example, Government Decree No. 276/2025 on fines will continue to apply, but the legal status of the body imposing the fines (SZTFH) will change.

With the 17th amendment to the Fundamental Law,  the continuity of ESG regulation is ensured, and market participants are not expected to have to worry about the rules disappearing immediately. At the same time, the regulatory focus will shift from the SZTFH to the Government and the ministries, and the SZTFH will lose its independent legislative status. Market participants (ESG consultants, certifiers, and reporting companies), however, must prepare for a massive wave of legislative revisions in the second half of 2026, during which SZTFH regulations are expected to be replaced by ministerial decrees. The substantive rules (due diligence criteria, reporting obligations) will likely remain in place, but government oversight will become stricter.

However, a new regulatory challenge is already emerging: the new ESRS and the delegated regulation on the voluntary reporting standard will take effect on January 1, 2027. This is expected to have an impact on both the Accounting Act and the ESG Act. I will discuss this in my next post.

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*This post also drew on the assistance of clausis.ai to process the legal materials. The post was subsequently published after being independently written, edited, and verified against independent sources by the author.