Corporate managers can now only care about honest marketing communications and ethical business behavior, and the solution of all other social problems has been pushed into the background for the time being.
The K&H Sustainability Index and the comprehensive research it is based on raise many questions. Now in its fifth quarter, it provides an accurate reflection of the sustainability efforts of Hungarian companies. The main index stands at 38 points, which is one point lower than in the previous period. The researchers evaluated a number of topics, from strategy creation to the preparation and auditing of the sustainability report. The different indicators indicate smaller or larger shifts, but the truly impressive results are achieved in the area of social sustainability.
In this area, the K&H Sustainability Index’s Corporate Social Responsibility sub-index shows a significant decline, falling from 46 points to 30 points in one year. This is the lowest score since the first quarter of 2022, the beginning of the six-monthly measurements. The significant decline is primarily due to the fact that small companies – with a turnover of between HUF 300 million and HUF 1 billion – seem to be moving away from the topic of social sustainability. A similarly sharp decline (from 54 points to 43 points) was recorded in the K&H Sustainability Index for large companies – with a turnover of more than $4 billion – half a year ago.
We reach interesting results if we examine the positions of companies based on content aspects. The importance of expecting equal gender participation in company management fell by more than half (from 30 points to 14). The commitment to creating a diverse workplace fell by half (from 58 points to 28 points), and the pursuit of work-life balance fell (from 65 points to 48 points). Social responsibility and socially responsible investment management fell by 9-10 points. The decline in fair treatment of employees was less (by 5 points). In practice, only ethical business behavior remained at the same level (at 57 points), as well as honest marketing communications (although 34 points cannot be considered really high).
Supa Levente, head of sustainability at K&H, can only speculate about the reasons for the decline in social responsibility.
I don’t think business leaders are any less committed to these social issues than they used to be. Rather, the research findings may highlight the fact that companies now have to simultaneously respond to the challenges of a tough business environment while also complying with a new set of environmental sustainability rules. As a result, less attention, energy, and money are being devoted to solving human problems.
He added that neglecting it could have a negative impact on the company's competitiveness in the long term.
