The Corporate Sustainability Reporting Regulations 2026

Introduction

The Corporate Sustainability Reporting Regulations, 2026 (L.N. 39 of 2026) (the ‘Regulations’) were published on 13 February 2026, transposing the EU’s Corporate Sustainability Reporting Directive (the ‘CSRD’) into Maltese law and introducing mandatory sustainability reporting for certain companies in Malta.

The Regulations have also been supplemented by the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026’, published on the 26 February 2026, but has not yet come into force.

Background – What is the CSRD About?

The Corporate Sustainability Reporting Directive forms part of the EU Green Deal framework.

The Directive imposes a ‘Double Materiality’ reporting obligation, requiring companies falling under its scope to:

(i) identify and disclose information on what they see as the risks and opportunities arising from social and environmental issues; and 

(ii) identify and disclose information on the impact of their activities on people and the environment. 

It also requires companies falling under its scope to disclose how it manages the risk identified under the double materiality reporting obligation.

These disclosures allow investors civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies.

The Corporate Sustainability Reporting Regulations 2026 (the ‘Regulations’)

Who do the Regulations Apply To?

The Regulations apply to:

(a) Large Undertakings; and

(b) Medium-Sized Undertakings and Small Undertakings that are Listed Public-Interest Entities.

What is a Large Undertaking?

Currently, Large Undertaking are those which on their balance sheet dates exceed at least two of the three following criteria:

• balance sheet total: EUR 20 000 000;
• net turnover: EUR 40 000 000;
• average number of employees during the financial year: 250.

Once the ‘Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026’ comes into force, these thresholds will increase to:

• balance sheet total: EUR25,000,000;
• net turnover: EUR50,000,000;
• average number of employees during the accounting period: 250.

What is a Medium-Sized Undertaking?

Currently, Medium-Sized Undertakings are those which do not qualify as ‘small companies’ and on their balance sheet dates do not exceed the limits of at least two of the following three criteria:

• balance sheet total: EUR 20 000 000;
• net turnover: EUR 40 000 000;
• average number of employees during the financial year: 250.

Once the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 comes into force, these thresholds will increase to:

• balance sheet total: EUR25,000,000;
• net turnover: EUR50,000,000;
• average number of employees during the accounting period: 250.

What is a Small Undertaking?

Currently, Small Undertakings (and likewise ‘small companies’) are those which on their balance sheet dates do not exceed the limits of at least two of the three following criteria:

• balance sheet total: EUR4,000,000;
• net turnover: EUR8,000,000;
• average number of employees during the accounting period: 50.

Once the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 comes into force, these thresholds will increase to:

• balance sheet total: EUR5,000,000;

• net turnover: EUR10,000,000;

• average number of employees during the accounting period: 50.

What are Listed Public-Interest Entities?

Medium-Sized and Small Undertakings qualify as Listed Public-Interest Entities if they are governed by the law of a Member State and their transferable securities are admitted to trading on a regulated market of any Member State.

Exceptions

Certain entities are excluded from the Regulations, even if they seem to fall within the scope set out above, such as:

(i) the Central Bank of Malta;

(ii) the Malta Development Bank; 

(iii) an Alternative Investment Fund;

(iv)  an  undertaking  for  collective  investment  in transferable securities; and

(v)  Very-small undertakings, being undertakings which on their balance sheet dates do not exceed the limits of at  least two (2) of the three (3) following criteria:

• balance  sheet  total:  EUR450,000; 
• net turnover: EUR900,000; and 
• average number of employees during the financial year: 10.

When do the Rules Start Applying: The Phased Approach

Generally, the Regulations apply in phases:

(i) From financial years starting on or after 1 January 2026: the largest undertakings and groups.

(ii) From 1 January 2027: other large undertakings and groups.

(iii) From 1 January 2028: listed medium and small undertakings and captive insurance undertakings.

What do Undertakings Falling within the Scope of the Regulations Have to Do?

1. Include Corporate Sustainability Report within the Directors’ Report

Undertakings falling with the Regulations’ scope must include a clearly identifiable dedicated section in the Directors’ Report, which is to be delivered to the Malta Business Registry, setting out the:

(i) information necessary to understand  the  undertaking’s  impacts  on  sustainability  matters;

(ii) information   on   the   key   intangible   resources;   and  

(iii) information necessary  to  understand  how  sustainability  matters  affect  the undertaking’s development, performance and position.

2. Follow Detailed Reporting Requirements

The Regulations set out detailed information requirements, aligned with EU Sustainability Reporting Standards.

However, some entities (such as Small and Medium-Sized Undertakings, Captive Insurance/Re-Insurance Undertakings and Small and Non-Complex Institutions) may benefit from lighter reporting requirements.

Small and Medium-Sized Undertakings may also temporarily choose not to report. However, in such cases, they must briefly report the basis on which the sustainability reporting was not provided.

3. Explain the Reporting Process

Undertakings must also report the process carried out to identify the information included in the Directors’ Report.

4. Report on the Value Chain

The Report shall include (where applicable) information about the Undertaking’s own operators and about its value chain, including its products and services, its business relationships and its supply chain.

Where Undertakings are unable to obtain the required information on their value chain, an exemption applies for the first three years of application in the form of a ‘Comply of Explain’ rule. Under the said rule, Undertakings that make use of the exemption must explain: 

(i) the efforts made to obtain the necessary information on their value-chain; 

(ii) the reasons for which they could not obtain all necessary information; and 

(iii) how they plan to obtain the necessary information going forward.

5. Meet The Sustainability Reporting Standards

The information included in the Report must be reported in accordance with the Sustainability Reporting Standards.

6. Engage with the Workers’ Representatives

The board of directors of the undertaking shall inform the workers’ representatives at the appropriate level and discuss with them the  relevant information  and  the  means  of obtaining  and  verifying sustainability  information.  Where  applicable,  the  workers’ representatives’  opinion  shall  be  communicated  to  the  board  of directors.

Exemption for Commercially Sensitive Information

The Regulations allow for the omittance of certain information relating to impending developments or matters in the course of negotiation in exceptional cases where, in the duly justified opinion of the directors, the disclosure of such information would be seriously prejudicial to the commercial position of the Undertaking.

Group Reporting

The Regulations provide for group-level sustainability reporting. A subsidiary undertaking may be exempt from preparing its own sustainability report where it and its subsidiaries are included in the consolidated directors’ report of a parent undertaking, provided certain conditions are satisfied.

This exemption also applies where the parent undertaking is established in a third country, provided that the consolidated sustainability reporting is prepared in accordance with sustainability reporting standards or standards deemed equivalent under EU rules.

Where the exemption is relied upon, the subsidiary must disclose specific information in its directors’ report, including details of the parent undertaking and where the consolidated report can be accessed.

At the same time, parent undertakings of a large group are required to include, within their consolidated directors’ report, a clearly identifiable dedicated section containing the group’s sustainability information.

The Assurance Report on Sustainability

Although not yet in force, the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 will amend the Companies Act to require an Assurance Report on Sustainability Reporting. This means the company’s sustainability report must be independently reviewed.

Sustainability Auditor vs Statutory Accounts Auditor

Undertakings may appoint an auditor or an audit firm other than the one or ones carrying out the statutory audit of the annual accounts in order to prepare the  assurance report on sustainability reporting.

Final Requirements

The assurance report must be:

• Filed with the Malta Business Registry together with the annual accounts and auditors’ report; and
• Made available on the company’s website (or via the Registry if the company does not have one).

Final Thoughts

The Corporate Sustainability Reporting Regulations 2026 introduce significant new compliance obligations for many Maltese companies, particularly larger and listed entities.

Early preparation, especially around data collection, internal controls and governance, will be essential to ensure smooth implementation and to avoid last-minute compliance pressures.

Contact Us Today

If you would like to understand how these Regulations apply to your company or group, or require assistance with implementation, sustainability reporting, group structuring, or assurance readiness, please feel free to contact us. We would be pleased to support you in navigating these new requirements efficiently and confidently.

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Written by Matthew Muscat

This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the Corporate Sustainability Reporting Regulations, 2026 and reflects our interpretation of the Regulations as at the date of publication.

The application and impact of the Regulations may vary depending on individual circumstances, and the Rugulations are subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.

Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.