FAQ

EcoVadis is a sustainability assessment system based on a specialist methodology that evaluates companies’ operations using documented evidence. The assessment covers four main areas: environmental practices, labor and human rights, business ethics, and sustainable procurement. The system analyzes what policies, management processes, and measures a company has in place, how these are implemented in practice, and what measurable results they achieve. The assessment also covers, among other things, corporate objectives, implementation measures, monitoring and reporting systems, and supply chain management. At the end of the process, the company receives a score and a detailed EcoVadis scorecard, which not only evaluates performance but also identifies areas for improvement.

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ESG (Environmental, Social, Governance) is a framework that integrates environmental, social, and governance factors into a company’s strategy. The three pillars demonstrate how sustainably a company operates in these dimensions. Sustainability, on the other hand, is a broader concept that focuses on the long-term viability of a company's operations, taking into account its environmental, social, and economic impacts.

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The difference between an ESG report and a sustainability report primarily arises from legal requirements and content focus. The ESG report is regulated by the Hungarian Act CVIII of 2023. In terms of content, it serves as an audited document, outlining companies’ compliance with sustainability-related due diligence requirements for the previous financial year.

In contrast, the sustainability report is based on the EU’s Corporate Sustainability Reporting Directive (CSRD) guidelines and is regulated by the Accounting Act. This report offers a more comprehensive overview of a company’s sustainability efforts, including elements of the ESG framework, but also extends to long-term economic sustainability as well as other environmental and social impacts. The purpose of the CSRD report is to present the company's sustainability performance in a standardized and transparent way, enabling comparability and transparency across different industries and regions.

A detailed legal analysis of the differences between the ESG report and the sustainability report can be found here.

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The legislation commonly referred to as the ESG Act applies to the following companies:

• Large, public interest enterprises
• Other large enterprises that meet the legal requirements
• Public interest small and medium-sized enterprises (SMEs)

The provisions related to sustainability due diligence obligations must be applied by these company groups at different stages.

It is important to note that ESG issues extend beyond the referenced Act. The requirements for sustainability reporting are regulated by the Accounting Act.

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ESRS (European Sustainability Reporting Standards) and CSRD (Corporate Sustainability Reporting Directive) are standards and guidelines introduced by the European Union to standardize corporate sustainability reporting and enhance transparency. These regulations require companies to provide detailed reports on their sustainability practices and outcomes. ESRS is part of the CSRD directive, which defines the mandatory sustainability reporting requirements for companies.

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The ESRS/CSRD requirements primarily apply to large and publicly listed firms. However, under the new guidelines, an increasing number of small and medium-sized enterprises (SMEs) also must comply with these regulations, especially if they are part of a larger company’s supply chain.

The scope of the sustainability report and the ESG report obligations is the same.

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Committed companies go beyond mere legal compliance and are deeply dedicated to sustainability. These companies integrate sustainability considerations into every business process, continuously seek new opportunities to improve their sustainability performance, and actively communicate their achievements to partners, customers, and the public.

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EcoVadis is a sustainability assessment system based on a specialist methodology that evaluates companies’ operations using documented evidence. The assessment covers four main areas: environmental practices, labor and human rights, business ethics, and sustainable procurement. The system analyzes what policies, management processes, and measures a company has in place, how these are implemented in practice, and what measurable results they achieve. The assessment also covers, among other things, corporate objectives, implementation measures, monitoring and reporting systems, and supply chain management. At the end of the process, the company receives a score and a detailed EcoVadis scorecard, which not only evaluates performance but also identifies areas for improvement.

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Obtaining an EcoVadis certification can be important for several reasons. An increasing number of multinational companies – particularly in the automotive, FMCG, technology, and industrial sectors – require their suppliers to have an EcoVadis assessment, which in many cases is already a prerequisite for new business opportunities or supplier collaborations. The certification is based on an independent expert evaluation, providing an objective view of a company’s ESG and sustainability performance, highlighting both strengths and areas for improvement.

The detailed EcoVadis scorecard received as a result of the assessment analyzes performance by category, helps identify gaps, define development priorities, and supports the creation of a structured ESG improvement plan. In addition, the certification can be communicated to business partners, customers, and investors, thereby contributing to strengthening the company’s credibility and sustainability commitment.

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The EcoVadis assessment is a questionnaire- and document-based process in which a company’s sustainability performance is evaluated in several steps. At the beginning, the company provides basic information – such as its size, industry, and countries of operation – as the assessment is tailored to the risks and characteristics of the given industry.

This is followed by a customized questionnaire covering the four main areas: environmental protection, labor and human rights, business ethics, and sustainable procurement. The responses must be supported by various documents, such as internal policies, reports, procedures, or certifications. The submitted information is evaluated by the Vantage Point methodology.

At the end of the process, the company receives a detailed EcoVadis scorecard, which presents the score, strengths, and areas for improvement. Based on performance, different ratings can be achieved, such as Bronze, Silver, Gold, or Platinum. A successful assessment is based on a well-documented ESG system that is also effectively implemented in practice. Most of our clients have achieved a Bronze rating.

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