Malta Publishes Corporate Sustainability Reporting Regulations, 2026

On Friday 13th February 2026, the Government of Malta published the Corporate Sustainability Reporting Regulations, 2026 (L.N. 39 of 2026) under the Companies Act. These Regulations transpose Directive (EU) 2022/2464, commonly referred to as the Corporate Sustainability Reporting Directive (CSRD), into Maltese law and introduce a comprehensive sustainability reporting framework applicable to certain undertakings and groups operating in Malta.

The Regulations significantly expand the scope, depth and formalisation of sustainability disclosures when compared to the previous non-financial reporting regime. Sustainability reporting is now embedded within the statutory reporting framework and forms part of the directors’ report.

The new requirements apply primarily to large undertakings and to parent undertakings of large groups. They also extend to small and medium-sized undertakings that qualify as listed public-interest entities, as well as to certain credit institutions and insurance undertakings. The framework does not apply to the Central Bank of Malta, the Malta Development Bank, Alternative Investment Funds, UCITS, or undertakings that do not exceed at least two of the prescribed size thresholds, namely a balance sheet total of €450,000, net turnover of €900,000 and an average of 10 employees during the financial year.

The implementation of the Regulations is phased. For financial years starting on or after 1 January 2026, the requirements apply to large public-interest entities exceeding 500 employees and to parent undertakings of large groups exceeding that threshold. From 1 January 2027, the obligations extend to other large undertakings and large groups. From 1 January 2028, listed small and medium-sized undertakings, certain small and non-complex institutions and captive insurance undertakings fall within scope. Separate provisions also introduce reporting requirements for certain third-country undertakings generating significant turnover within the European Union.

Undertakings within scope must include a clearly identifiable sustainability section within their directors’ report. The disclosure must enable an understanding of both the undertaking’s impacts on sustainability matters and the manner in which sustainability matters affect the undertaking’s development, performance and position. Sustainability matters are broadly defined and encompass environmental, social, human rights and governance factors.

The information required is extensive. Companies must describe their business model and strategy, including its resilience to sustainability-related risks and any sustainability-related opportunities. They must outline transition plans aligned with limiting global warming to 1.5°C and achieving climate neutrality by 2050, where applicable, and disclose any exposure to coal-, oil- or gas-related activities. Time-bound sustainability targets, including greenhouse gas emission reduction targets where relevant, must be reported together with progress made toward achieving them. The Regulations also require disclosure of the role and expertise of directors in relation to sustainability matters, sustainability-related policies, due diligence processes, principal actual or potential adverse impacts across the undertaking’s operations and value chain, and the actions taken to prevent, mitigate or remediate such impacts. Principal sustainability risks and relevant indicators must also be included.

Parent undertakings of large groups are required to prepare consolidated sustainability reporting within the consolidated directors’ report. Subsidiaries may be exempted where they are included within compliant group-level reporting, subject to specific disclosure conditions.

The Regulations further introduce mandatory assurance of sustainability reporting. Statutory auditors or audit firms must issue an assurance report on sustainability reporting, initially on a limited assurance basis, in accordance with applicable standards. Sustainability reporting must also be prepared in the Single Electronic Reporting Format (ESEF) and digitally marked up in line with EU requirements.

Specific provisions apply to Maltese subsidiaries and branches of certain third-country undertakings that generate significant turnover within the Union. In such cases, group-level sustainability reporting may need to be published and made publicly accessible, accompanied by an assurance report.

Overall, the Corporate Sustainability Reporting Regulations, 2026 establish a structured and enforceable sustainability reporting regime aligned with EU standards. The framework introduces enhanced disclosure requirements, consolidated reporting obligations, digital reporting standards and mandatory assurance, representing a substantial development in the corporate reporting landscape in Malta.