Legal idiosyncrasies and slow civil society development are holding back corporate responsibility in Hungary
A 2006 study by the International Federation of Human Rights established that the concept of corporate responsibility was still not well known in Hungary. Since then, some attitudes have changed.
Interest, if not progress, in responsible business is rapidly spreading, for two reasons. First, it is a result of Hungary’s integration in the EU. Second, multinational corporations and foreign investors are having a growing influence on Hungarian business.
In Hungary, social problems are different from those in western Europe. Environmental awareness remains low, and companies are facing pressing social issues rather than considering fair trade or their impact on climate change. As in many other central and eastern Europe nations, jobs and improving workplace skills and conditions are paramount.
The media is an obstacle to the spread of corporate responsibility awareness in Hungary. There is no clear editorial independence from advertisers and journalists often ignore ethical business-related stories. Under the 1989 Hungarian Media Act, when a company’s name is mentioned in the media, it is considered to be an advertisement. When the broadcaster RTL Klub reported from the first Hungarian “CSR day” in 2006, the Hungarian Radio and Television Commission fined the company thousands of euros, claiming hidden advertising.
Civil society movements in Hungary are undeveloped compared with those of western Europe. Many thousands of non-governmental organisations are officially registered, but many for dubious tax reasons.
Most companies that participate in corporate responsibility are among the biggest 200 firms in the country. Those considering ethics are generally subsidiaries of foreign companies. The majority of small and medium-sized companies, as elsewhere, are not particularly interested. Many have liquidity problems and concentrate more on basic economic sustainability.
Among bigger companies, Magyar Telekom, a subsidiary of the German telecommunication giant Deutsche Telekom, is a major sponsor of cultural events. In keeping with modern theory about ethical business, Gyula Szabó, the company’s CSR manager, says Hungarian firms should realise that ethical business is more about what companies do every day. But old philanthropy habits die hard.
There are other signs of progress. Last year the state-owned Hungarian national railway corporation launched what was billed as a corporate responsibility programme. The focus is on improving safety, protection of the environment, being customer-centred and supporting Hungarian cultural activity.
And in November 2007, the Hungarian Economic and Social Committee, a special body of the Hungarian parliament, accepted detailed corporate responsibility-related recommendations. The aim is to push the agenda in Hungary in line with the European Union’s desire for responsible business to improve corporate innovation. There remains quite a way to go.