Sustainability is a shared ambition at a global level, yet the way it is implemented differs significantly by region. According to Grant Thornton’s international research, the mid-market sector worldwide invests in ESG initiatives based on differing business considerations.

While in North America sustainability is primarily seen as a growth and investment opportunity, in Asia it forms part of innovation and digitalisation, whereas in Europe the focus is increasingly on optimising operational efficiency and regulatory compliance.

This difference is decisive from both a strategic and a business perspective.

Europe: From regulation to operational advantage

European companies operate in a more mature ESG regulatory environment. As a result of the CSRD, the EU Taxonomy and other regulations, most market participants have already gone beyond the initial compliance steps.

Accordingly, the focus is shifting:

• from compliance to integration into operations;
• from one-off projects to process-level integration;
• and from obligations to measurable business impacts.

Sustainability is thus increasingly linked to cost efficiency, optimisation of energy use, and improved financing conditions.

The “twin transition”: Linking digitalisation and ESG

One of the key elements of the European approach is the connection between the green and digital transition. Digitalisation is both an enabling tool and a foundation of ESG operations.

In practice, this means that:

• the collection and validation of ESG data is increasingly based on automated systems;
• reporting and risk management rely on shared databases;
• and decision-making is becoming increasingly data driven.

This is particularly relevant in the financial sector, where the management of ESG risks can no longer be separated from traditional risk models.

Regional differences, shared direction

Although ESG objectives are increasingly aligned across Europe, implementation continues to reflect local regulatory frameworks, market expectations and economic realities.

Hungary, Slovakia, Slovenia and Croatia all demonstrate different stages and drivers of ESG maturity. While the pace and mechanisms vary, the direction is remarkably similar: sustainability is becoming embedded into core business operations rather than remaining a standalone compliance exercise.

Hungary: From compliance to verification

Hungary has established one of the most structured ESG frameworks in the region. Mandatory ESG reporting requirements and independent certification obligations have accelerated the transition from sustainability commitments to measurable and verifiable performance.

Two parallel forces are currently shaping the Hungarian market.

Financing requirements are becoming ESG requirements

The first driver comes from the financial sector. Through supervisory expectations and prudential requirements, banks are increasingly required to integrate ESG risks into their lending and risk assessment processes.

As a result, sustainability-related information is becoming an important element of financing decisions. Companies that can provide reliable ESG data are better positioned when engaging with financial institutions and investors.

Mandatory certification raises expectations

The second driver comes from regulation. The Hungarian ESG Act and related implementing decrees require a broad group of companies to prepare ESG reports and subject them to independent certification.

This development shifts ESG from voluntary commitments towards auditable and verifiable information. Organisations are increasingly required to establish stronger governance frameworks, improve internal controls and ensure the quality of reported data.

Data quality remains a challenge

Despite significant progress, many companies still face challenges in collecting and managing ESG-related information. Manual processes, spreadsheets and fragmented data ownership remain common across the market.

The transition towards integrated ESG data management systems is underway, but for many organisations this remains one of the most important areas for development.

From reporting obligation to business value

As the market matures, ESG is increasingly viewed as more than a reporting requirement. Reliable sustainability data supports financing opportunities, supplier relationships and participation in international value chains.

For many Hungarian companies, ESG is gradually becoming a business capability that contributes directly to competitiveness and long-term value creation.

Slovakia: Supply chains remain the strongest driver

In Slovakia, ESG adoption has largely been driven by international supply chains and the requirements of multinational parent companies.

For many businesses, sustainability reporting first emerged as a response to information requests from customers, investors and group-level reporting obligations rather than domestic regulation.

As a result, Slovak companies have developed practical experience with ESG data collection and reporting, particularly within export-oriented industries and manufacturing sectors.

The focus is increasingly shifting from responding to questionnaires and customer requests towards building internal ESG management capabilities that support broader business objectives.

Slovenia: Sustainability as part of business culture

Slovenia benefits from a relatively mature sustainability culture and a long-standing focus on environmental responsibility.

Although the country does not have dedicated national ESG legislation comparable to the Hungarian framework, sustainability considerations are already well integrated into many business strategies and corporate governance structures.

Slovenian companies often approach ESG as part of broader business resilience, innovation and stakeholder engagement efforts rather than solely as a compliance exercise.

This cultural foundation has supported a relatively smooth transition towards more structured sustainability reporting requirements.

Croatia: From awareness to implementation

Croatia is currently in a transitional phase where sustainability is moving beyond awareness and becoming increasingly embedded into business decision-making.

While sustainability initiatives are particularly visible in sectors such as tourism and energy, ESG implementation is gradually expanding across industries as organisations respond to growing expectations from investors, financial institutions and international business partners.

Compared with Hungary, where ESG implementation is strongly influenced by dedicated national legislation and certification requirements, the Croatian market remains more market driven.

Data remains the key challenge

One of the most significant challenges for Croatian companies is organisational readiness and ESG expertise.

Many organisations continue to rely on manual data collection processes and external advisory support, while integrated ESG reporting systems remain at an earlier stage of development.

At the same time, many companies continue investing in sustainability programmes even when they are no longer legally required to do so, recognising the long-term strategic value of ESG capabilities.

The growing role of financial institutions

Croatian banks are increasingly incorporating ESG considerations into lending processes and financing frameworks.

While formal ESG certification is not generally required, sustainability performance is becoming more relevant in financing decisions, supported by incentive-based mechanisms such as green financing solutions and sustainability-linked lending products.

Different markets, common direction

Although ESG maturity differs across Central Europe, several common themes are emerging.

• ESG is increasingly becoming part of competitiveness.
• Data quality and digitalisation are taking on a central role.
• Regulatory compliance is evolving into broader business value.
• Financing institutions are becoming important drivers of ESG adoption.

The most successful organisations will be those that can combine reliable data, effective governance and long-term sustainability objectives within their business strategy.

Sustainability is no longer defined solely by reporting requirements. Across the region, it is becoming a practical business discipline that influences financing, operations, risk management and long-term growth.

Sustainability is a shared ambition at a global level, yet the way it is implemented differs significantly by region. According to Grant Thornton’s international research, the mid-market sector worldwide invests in ESG initiatives based on differing business considerations.