ESG obligations in the defense industry, national regulation and international outlook

Paksi, Gábor (2026) ESG obligations in the defense industry, national regulation and international outlook. AMERICAN JOURNAL OF RESEARCH EDUCATION AND DEVELOPMENT (2). pp. 15-25. ISSN 2471-9986

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Abstract

The study analyzes the role and applicability of the Hungarian ESG (Environmental, Social and Governance) regulation in the defense industry, with special regard to the scope of the subject-obligation, the principle of gradualism and the expected impacts of the changes in the European Union's sustainability regulation (Omnibus package). The Hungarian ESG law does not provide any exemptions for defense sector actors, so these organizations are also obliged to comply with the due diligence and reporting obligations for sustainability purposes. However, national security considerations and the specificities of the defense sector require the development of specific compliance mechanisms. Regulatory relaxations at the European level, in particular the Stop the Clock Directive and the CSRD, CSDDD and ESRS amendments, are expected to transform the domestic regulatory environment. The aim of this paper is to provide a theoretical and practical contribution to the legal interpretation of ESG compliance in the defense sector, with a particular focus on the challenges of legal harmonization and the need to redefine the scope of the subject.

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