On 13 February 2026, Malta formally transposed the EU Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) (the “CSRD”) through the enactment of the Corporate Sustainability Reporting Regulations, 2026 (L.N. 39 of 2026, the “Regulations”).The much-anticipated Regulations mark a decisive step forward in Malta’s corporate disclosure landscape, bringing sustainability reporting on par with financial reporting and aligning Maltese law with the EU’s evolving ESG legal framework. But, as discussed further below, amendments to the Regulations may already be in the pipeline.

1. Legal Basis and Purpose

The Regulations are issued under the Companies Act (Chapter 386, Laws of Malta) and serve to transpose and implement the CSRD into Maltese law. While not yet in force1, the Regulations modernise Malta’s accounting and reporting framework by requiring companies to produce consistent, comparable and independently assured sustainability information pertaining to their activities.The primary purpose of the CSRD, as mirrored in the Regulations, is to enhance transparency and accountability regarding companies’ impacts on the environment, society, human rights and corporate governance. To achieve this goal, the CSRD and Regulations introduce a framework that replaces the narrower non financial reporting obligations previously applicable under the EU Non-Financial Reporting Directive (NFRD) with a comprehensive sustainability reporting regime.

2. Phased Entry Into Force

Malta has adopted the same phased implementation approach introduced at EU level under the CSRD. The obligations under the Regulations will thus apply progressively as follows:

  • From 1 January 2026 (Wave 1):Large public‑interest entities (PIEs) with more than 500 employees, and PIEs which are parent undertakings of large groups exceeding that threshold on a consolidated basis.
  • From 1 January 2027 (Wave 2):All other large undertakings and parent undertakings of large groups not captured in the first phase2.
  • From 1 January 2028 (Wave 3):Listed SMEs, small and non‑complex institutions (provided they are large undertakings or listed SMEs), captive insurance undertakings, reinsurance undertakings, and certain third‑country groups generating substantial EU turnover.

That being said, in light of recent discussions held at EU level on the EU Omnibus Directive and the enactment of the ‘Stop-the-Clock’ Directive in 2025, the timelines may be further delayed and the in-scope entities substantially reduced in the near future.

Indeed, the ‘Stop-the-Clock’ Directive enacted in 2025 delays the CSRD reporting obligations timeline for Waves 2 and 3 by two years respectively. Moreover, on 24 February 2026 the European Council adopted the final text of the EU Omnibus Directive which inter alia narrows the scope of the CSRD and the Corporate Sustainability Due Diligence Directive (Directive (EU) 2024/1760).

Once formally implemented, the Omnibus Directive shall make CSRD reporting mandatory only for undertakings or groups with more than 1,000 employees and net turnover exceeding €450 million - thereby significantly reducing in-scope entities. The Omnibus Directive is expected to be published in the EU’s official journal in the coming days and will come into force on the twentieth day after publication.

Once the Omnibus Directive is published, it is likely that the Regulations will be revised to include this update as well as the delayed timelines introduced in the ‘Stop-the-Clock’ Directive.

3. Entities In Scope

Until the abovementioned amendments are made to the Regulations, the categories of entities required to report shall be the following:

  • Large undertakings that meet at least two of the following criteria: (i) employ more than 250 employees; (ii) have a net turnover which exceeds €40 million; (iii) have total assets which exceed €20 million;
  • Parent undertakings of large groups, i.e. groups consisting of parent and subsidiary undertakings which, on a consolidated basis: (i) employ more than 250 employees; (ii) have a net turnover which exceeds €40 million computed net, or €48,000,000 computed gross; (iii) have total assets which exceed €20 million computed net, or €24,000,000 computed gross;
  • Public‑interest entities, including listed companies;
  • Certain credit institutions and insurance undertakings;
  • Listed SMEs;
  • EU branches of non‑EU companies with significant turnover in the EU;
  • Third-country (i.e. non-EU) parent groups with substantial EU activity.

Certain entities are however excluded from scope, including the Central Bank of Malta, the Malta Development Bank, alternative investments funds (AIFs), UCITS and small undertakings that do not exceed at least two of the following criteria: (i) employ more than 10 employees; (ii) net turnover of €900,000; (iii) balance sheet total of €450,000.

4. Reporting Obligations and ESRS Alignment

The Regulations require companies to include a clearly identifiable sustainability section within their directors’ report.

The information disclosed must provide an understanding of:

  1. Impact Materiality - how the company’s activities affect environmental, social, human rights and governance matters;
  2. Financial Materiality - how sustainability matters affect the company’s development, performance and position,

the so-called ‘Double-Materiality’ principle.

Reporting will have to be in line with European Sustainability Reporting Standards (ESRS) that are developed by the European Financial Reporting Advisory Group (EFRAG).

5. Assurance and the Role of Auditors

The Regulations introduce assurance obligations specifically for sustainability reporting. Auditors and audit firms authorised under Maltese law are tasked with providing assurance engagements over the ESRS-aligned disclosures. This reflects the broader EU objective of improving reliability and comparability of sustainability information.

6. Practical Implications for Maltese Businesses

For Maltese undertakings falling within their purview, the new Regulations are particularly relevant as they will be required to consider:

  • Governance restructuring, including board oversight of sustainability matters;
  • Data collection and internal controls capable of supporting ESRS‑level disclosures;
  • Conducting Double Materiality Assessments, which will become foundational to reporting;
  • Supply chain due diligence, particularly for companies with cross‑border operations;
  • Assurance readiness, including early dialogue with auditors.

While the obligations are comprehensive and resource-heavy, they also provide an opportunity for companies to strengthen their ESG credentials, improve investor confidence, and align with emerging global sustainability reporting norms.

Which companies will actually end up being in scope of the Regulations is, however, yet to be seen due to the developments occurring on a broader EU level.