Corporate Sustainability Reporting Regulations, 2026

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 21,586, 13 ta’ Frar, 2026 B 237

L.N. 39 of 2026

COMPANIES ACT

(CAP. 386)

Corporate Sustainability Reporting Regulations, 2026

IN EXERCISE of the powers conferred by article 425(6) of the

Companies Act, the Minister responsible for the registration of

commercial partnerships, has made the following regulations:-

(1) The title of these regulations is the Corporate Citation and

commencement.

Sustainability Reporting Regulations, 2026.

(2) These regulations shall come into force on such date or

dates as the Minister responsible for the registration of commercial

partnerships may, by notice in the Gazette establish, and different dates

may be so established for different provisions and, or purposes of these

regulations.

The scope of these regulations is to transpose and Scope.

implement Directive (EU) 2022/2464 of the European Parliament and

of the Council of 14 December 2022 amending Regulation (EU) No.

537/2014, Directive 2004/109/EC, Directive 2006/43/EC and

Directive 2013/34/EU, as regards corporate sustainability reporting.

(1) Unless the context otherwise requires, any terms Interpretation.

used in these regulations and not defined herein, shall have the same

meaning assigned to them in the Companies Act, the Accountancy Cap. 386.

Profession Act and in the Accountancy Profession Regulations.

(2)

In these regulations, unless the context otherwise requires

"Act" means the Companies Act;

"Accountancy Profession Act" means the Accountancy

Profession Act;

"Accounting Directive" means Directive 2013/34/EU of the

European Parliament and of the Council of 26 June 2013 on

the annual financial statements, consolidated financial

statements and related reports of certain types of undertakings,

amending Directive 2006/43/EC of the European Parliament

and of the Council and repealing Council Directives 78/660/EEC

and 83/349/EEC;

"Alternative Investment Fund" or "AIF" shall have the

same meaning as assigned to it in the Investment Services Act;

"annual accounts" shall h a v e the same meaning as

assigned to it in article 2 of the Act;

"Audit Directive" means Directive 2006/43/EC of the

European Parliament and of the Council of 17 May 2006 on

statutory audits of annual accounts and consolidated accounts,

amending Council Directives 78/660/EEC and 83/349/EEC and

repealing Council Directive 84/253/EEC;

"audit firm" shall have the same meaning assigned to it in

the Accountancy Profession Act or in regulations made

thereunder, with respect to the assurance of sustainability

reporting as defined in the Accountancy Profession Act;

"auditor" or "statutory auditor" shall have the same

meaning assigned to it in the Accountancy Profession Act or in

regulations made thereunder, with respect to the assurance of

sustainability reporting as defined in the Accountancy Profession

Act;

"Audit Regulation" means Regulation (EU) No. 537/2014

of the European Parliament and of the Council of 16 April 2014

on specific requirements regarding statutory audit of public-

interest entities and repealing Commission Decision 2005/909/

EC;

"assurance of sustainability reporting" shall have the same

meaning as assigned to it in the Accountancy Profession Act;

"Board" means the Accountancy Board established by

article 6 of the Accountancy Profession Act;

"captive insurance undertaking" shall have the same

meaning as assigned to it in the Insurance Business Act;

"captive reinsurance undertaking" shall have the same

meaning as assigned to it in the Insurance Business Act;

"Central Bank" means the Central Bank of Malta as

established by article 3 of the Central Bank of Malta Act;

"consolidated directors’ report" shall be construed in

accordance with the Act;

"consolidated financial statements" shall be construed

in accordance with the Act;

"credit institution" shall have the same meaning as

assigned to it in point (1) of Article 4(1) of Regulation (EU) No.

575/2013 of the European Parliament and of the Council of 26

June 2013 on prudential requirements for credit institutions and

investment firms and amending Regulation (EU) No 648/2012,

as licensed by the Malta Financial Services Authority and

excluding any passported institutions;

"directors’ report" shall h a v e the same meaning as

assigned to it in article 2 of the Act;

"group" shall be construed in accordance with the Act;

"group auditor" shall have the s a m e meaning a s

assigned to it in the Accountancy Profession Act or in Cap. 281.

regulations made thereunder, with respect to the assurance of

sustainability reporting as defined in the Accountancy Profession

Act;

"insurance undertaking" shall have the same meaning as

assigned to "authorised insurance undertaking" in the Insurance Cap. 403.

Business Act, as licensed by the Malta Financial Services

Authority and excluding any passported institutions;

"issuer" shall have the same meaning as assigned to it in

Article 2(1)(d) of Directive 2004/109/EC of the European

Parliament and of the Council of 15 December 2004 on the

harmonisation of transparency requirements in relation to

information about issuers whose securities are admitted to

trading on a regulated market and amending Directive 2001/34/

EC;

"key intangible resources" means resources without

physical substance on which the business model of the

undertaking fundamentally depends and which are a source of

value creation for the undertaking;

"large groups" shall have the same meaning as assigned to

it in paragraph 1 of Part I of the Third Schedule to the Act;

"large undertakings" shall have the same meaning as

assigned to it in paragraph 1 of Part I of the Third Schedule to

the Act;

"listed public-interest entities" means an undertaking

governed by the law of a Member State and whose transferable

securities are admitted to trading on a regulated market of any

Member State;

"Malta Development Bank" means the Malta Development

Bank as established by article 3 of the Malta Development Bank

Act;

"medium-sized undertakings" shall have the same meaning

as assigned to it in paragraph 1 of Part I of the Third Schedule to

the Act;

"Member State" means a member state of the European

Union;

"Minister" means the Minister responsible for finance;

"net turnover" means the amounts derived from the sale of

products and the provision of services after deducting sales

rebates and value added tax and other taxes directly linked to

turnover; however, for insurance undertakings referred to in

point (a) of the first sub-paragraph of Article 1(3) of the

Accounting Directive, "net turnover" shall be defined in

accordance with Article 35 and point 2 of Article 66 of Council

Directive 91/674/EEC of 19 December 1991 on the annual

accounts and consolidated accounts of insurance undertakings;

for credit institutions referred to in point (b) of the first sub-

paragraph of Article 1(3) of the Accounting Directive, "net

turnover" shall be defined in accordance with point (c) of Article

43(2) of Council Directive 86/635/EEC of 8 December 1986 on

the annual accounts and consolidated accounts of banks and

other financial institutions; and for third-country undertakings

falling under the scope of Article 40a(1) of the Accounting

Directive, "net turnover" means the revenue as defined by or

within the meaning of the financial reporting framework on the

basis of which the financial statements of the undertaking are

prepared;

"parent undertaking" shall have the same meaning as

assigned to it in Article 2(9) of the Accounting Directive;

"public-interest entity" shall have the same meaning as

assigned to it in article 2(1) of the Accountancy Profession Act;

"Registrar" shall have the same meaning as assigned to it in

article 2 of the Act;

"Regulation (EU) No. 575/2013" means Regulation (EU)

No. 575/2013 of the European Parliament and of the Council of

26 June 2013 on prudential requirements for credit institutions

and amending Regulation (EU) No. 648/2012;

"Regulation (EU) No. 2020/852" means Regulation (EU)

2020/852 of the European Parliament and of the Council of 18

June 2020 on the establishment of a framework to facilitate

sustainable investment, and amending Regulation (EU) 2019/

2088;

"small and non-complex institutions" shall have the same

meaning as assigned to it under point (145) of Article 4(1) of

Regulation (EU) No. 575/2013;

"small undertakings" means the companies referred to in

article 185(1) of the Act;

"sustainability matters" means environmental, social and

human rights,

and

governance

factors,

including

sustainability factors defined in point (24) of Article 2 of

Regulation (EU) 2019/2088 of the European Parliament and of

the Council of 27 November 2019 on sustainability-related

disclosures in the financial services sector;

"sustainability reporting" means reporting information

related to sustainability matters established by and in accordance

with regulations 6 to 22 and 24;

"sustainability reporting standards" means standards,

established by delegated acts adopted by the European

Commission on sustainability reporting from time to time,

pursuant to the Accounting Directive;

"third country" shall h a v e

the same meaning as

assigned to it in article 2 of the Act;

"third-country audit entity" shall have the same meaning as

assigned to it in the Accountancy Profession Act, with respect Cap. 281.

to the assurance of sustainability reporting;

"third-country auditor" shall have the same meaning as

assigned to it in the Accountancy Profession Act, with respect Cap. 281.

to the assurance of sustainability reporting;

"third-country subsidiary undertakings and branches"

means subsidiary undertakings and branches of undertakings

which are not governed by the law of a Member State but whose

legal form is comparable with that of an undertaking according

to these regulations;

"Transparency Directive" means Directive 2004/109/EC of

the European Parliament and of the Council of 15 December

2004 on the harmonisation of transparency requirements in

relation to information about issuers whose securities are

admitted to trading on a regulated market and amending

Directive 2001/34/EC;

"undertaking" shall have the same meaning as assigned to it

in Article 2 of the Accounting Directive as well as insurance

undertakings and credit institutions regardless of the legal form;

"undertaking for collective investment in transferable

securities" or "UCITS" means an undertaking authorised in

accordance with Article 5 of Directive 2009/65/EC of the

European Parliament and of the Council of 13 July 2009 on the

coordination of laws, regulations and administrative provisions

relating to undertakings for collective investment in transferable

securities (UCITS);

"Union" means the European Union.

"workers’ representative" shall have the same meaning as

"employees’ representative" in the Employment and Industrial

Relations Act.

(1)

These regulations shall apply to the obligation

imposed on

(a)

large undertakings, and

(b) medium-sized undertakings and small undertakings

which are listed public-interest entities, to include in the

directors’ report information necessary to understand the

undertaking’s impacts on sustainability matters, as well as

information necessary to understand how sustainability matters

affect the undertaking’s development, performance and position.

(2)

These regulations shall not apply to

(a)

the Central Bank of Malta;

(b)

the Malta Development Bank;

(c)

an Alternative Investment Fund;

(d) an undertaking

for

collective

investment

in

transferable securities; and

(e) undertakings which on their balance sheet dates do

not exceed the limits of at least two (2) of the three (3)

following criteria

(i) balance sheet total: four hundred and fifty

thousand euro (€450,000);

(ii) net turnover: nine hundred thousand euro

(€900,000);

(iii) average number of employees during the

financial year: ten (10).

(1) The measures indicated hereunder in regulations 6 to Time-frame for

applicability.

24, 39 and 41, shall be applicable in the following manner

(a)

for financial years starting on or after 1 January

(i) to large undertakings which are public-

interest entities exceeding on their balance sheet dates the

average number of five hundred (500) employees during

the financial year; and

(ii) to public-interest entities which are parent

undertakings of a large group exceeding on its balance

sheet dates, on a consolidated basis, the average number of

five hundred (500) employees during the financial year;

(b)

for financial years starting on or after 1 January

(i) to large undertakings,

other

than

those

referred to in paragraph (a)(i); and

(ii) to parent undertakings of a large group, other

than those referred to in paragraph (a)(ii);

(c)

for financial years starting on or after 1 January 2028

(i) to small undertakings and medium-sized

undertakings which are listed public-interest entities;

(ii) to small and non-complex institutions, provided

they are large undertakings or that they are small

undertakings or medium-sized undertakings which are

listed public-interest entities; and

(iii) to captive insurance undertakings and captive

reinsurance undertakings, provided that they are large

undertakings or that they are small undertakings or

medium-sized undertakings which are listed public-interest

entities.

(2) The measures indicated in regulations 25 to 32 with respect

to reporting concerning third-country undertakings shall be applicable

to third-country undertakings for financial years starting on or after 1

January 2028.

(3) The provisions of sub-regulation (1) shall also apply

mutatis mutandis to issuers in terms of the MFSA Capital Markets

Rules as follows

(a)

for financial years starting on or after 1 January

2026

(i) to issuers which are large undertakings

exceeding on their balance sheet dates the average number

of five hundred (500) employees during the financial year;

and

(ii) to issuers which are parent undertakings of a

large group exceeding on its balance sheet dates, on a

consolidated basis, the average number of five hundred

(500) employees during the financial year;

(b)

for financial years starting on or after 1 January

2027

(i) to issuers which are large undertakings, other

than those referred to in paragraph (a)(i); and

(ii) to issuers which are parent undertakings of a

large group, other than those referred to in paragraph

(a)(ii);

(c)

for financial years starting on or after 1 January

2028

(i) to issuers which are small undertakings or

medium-sized undertakings;

(ii) to issuers which are small and non-complex

institutions provided they are large undertakings or that

they are small undertakings or medium-sized undertakings

which are listed public-interest entities; and

(iii) to

issuers

which

are

captive

insurance

undertakings or captive reinsurance undertakings, provided

that they are large undertakings or that they are small

undertakings or medium-sized undertakings, which are

listed public-interest entities.

(4) The measures indicated in regulations 33 to 38 and 40 shall

be applicable for financial years starting on or after 1 January 2026.

(1)

(a) Large undertakings; and

Sustainability

reporting.

(b) medium-sized

undertakings

and

small

undertakings that are listed public-interest entities,

shall include in the directors’ report information necessary to

understand the undertaking’s impacts on sustainability matters,

information on the key intangible resources and information

necessary to understand how sustainability matters affect the

undertaking’s development, performance and position.

(2) The information referred to in sub-regulation (1) shall be

clearly identifiable within the directors’ report, through a dedicated

section of such directors’ report.

(3) A copy of the director ’ report shall be delivered to

the Registrar for registration, in accordance with article 183 of the

(1)

The information referred to in regulation 6 shall Required

information.

(a) a brief description of the undertaking’s business

model and strategy, including

(i) the resilience of the undertaking’s business

model and strategy in relation to risks related to

sustainability matters;

(ii) the opportunities for the undertaking related

to sustainability matters;

(iii) the plans of the undertaking, including

implementing actions and related financial and investment

plans, to ensure that its business model and strategy are

compatible with the transition to a sustainable economy

and with the limiting of global warming to one point five

degrees Celsius (1,5°C) in line with the Paris Agreement

to the United Nations Framework Convention on Climate

Change adopted on 12 December 2015 and the objective of

achieving climate neutrality by 2050 as established in

Regulation (EU) 2021/1119 of the European Parliament and

of the Council of 30 June 2021 establishing the framework

for achieving climate neutrality and amending Regulations

(EC) No 401/2009 and (EU) 2018/1999 (‘European Climate

Law’), and where relevant, the exposure of the undertaking

to coal-, oil-, and gas-related activities;

(iv) how the undertaking’s business model and

strategy take account of the interests of the undertaking’s

stakeholders and of the impacts of the undertaking on

sustainability matters;

(v) how the undertaking’s strategy has been

implemented with regard to sustainability matters;

(b) a description of the time-bound targets related to

sustainability matters set by the undertaking, including where

appropriate, absolute greenhouse gas emission reduction targets

at least for 2030 and 2050, a description of the progress the

undertaking has made towards achieving those targets, and a

statement of whether the undertaking’s targets related to

environmental factors are based on conclusive scientific

evidence;

(c) a description of the role of the directors with regard to

sustainability matters, and of their expertise and skills in relation

to fulfilling that role or the access these directors have to such

expertise and skills;

(d) a description of the undertaking’s policies in relation

to sustainability matters;

(e) information about the existence of incentive

schemes linked to sustainability matters which are offered to the

directors;

(f)

a description of

(i) the due diligence process implemented by the

undertaking with regard to sustainability matters, and

where applicable, in line with Union requirements on

undertakings to conduct a due diligence process;

(ii) the principal actual or potential adverse

impacts connected with the undertaking’s own operations

and with its value chain, including its products and

services, its business relationships and its supply chain,

actions taken to identify and monitor those impacts, and

other adverse impacts which the undertaking is required to

identify pursuant to other Union requirements on

undertakings to conduct a due diligence process; and

(iii) any actions taken by the undertaking to prevent,

mitigate, re-mediate or bring an end to actual or potential

adverse impacts, and the result of such actions;

(g) a description of the principal risks to the

undertaking related to sustainability matters, including a

description of the undertaking’s principal dependencies on those

matters, and how the undertaking manages those risks;

(h) indicators relevant to the disclosures referred to in

paragraphs (a) to (g).

(2) Undertakings shall report the process carried out to identify

the information that they have included in the directors’ report in

accordance with regulation 6. The information listed in sub-regulation

(1) shall include information related to short-, medium- and long-

term time horizons, as applicable.

(3) Undertakings shall also include the disclosures required in

terms of Article 8 of Regulation (EU) 2020/852 as regards

information on how and to what extent the undertaking’s activities are

associated with economic activities that qualify as environmentally

sustainable.

(1) Where applicable, the information referred to in Information

regulations 6 and 7 shall contain information about the undertaking’s about

undertaking’s

own operations and about its value chain, including its products and own operations.

services, its business relationships and its supply chain.

(2) For the first three (3) years of the application of the

measures in accordance with regulation 6, and in the event that not all

the necessary information regarding its value chain is available, the

undertaking shall explain the efforts made to obtain the necessary

information about its value chain, the reasons on the basis of which

not all of the necessary information could be obtained, and its plans to

obtain the necessary information in the future.

(3) Where applicable, the information referred to in regulations

6 and 7 shall also contain references to, and additional explanations of,

the other information included in the directors’ report in accordance

with article 177 of the Act, and the amounts reported in the annual

accounts.

(4) Information relating to impending developments or matters

in the course of negotiation may be omitted in exceptional cases

where, in the duly justified opinion of the directors, acting within the

competences assigned to them by national law and having collective

responsibility for that opinion, the disclosure of such information

would be seriously prejudicial to the commercial position of the

undertaking, provided that such omission does not prevent a fair and

balanced understanding of the undertaking’s development,

performance, position and impact of its activity.

Undertakings shall report information referred to in

regulations 6 to 8 in accordance with the sustainability reporting

standards adopted pursuant to regulation 23.

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.

(1) By way of derogation from regulations 7 to 9, and

without prejudice to regulation 14, small undertakings and medium-

sized undertakings which are listed public-interest entities, small and

non-complex institutions, captive insurance undertakings and captive

reinsurance undertakings may limit their sustainability reporting to

the following information

(a) a brief description of the undertaking’s business

model and strategy;

(b) a description of the undertaking’s policies in relation

to sustainability matters;

(c) the principal actual or potential adverse impacts of

the undertaking on sustainability matters, and any actions taken

to identify, monitor, prevent, mitigate or remediate such actual

or potential adverse impacts;

(d) the principal risks to the undertaking related to

sustainability matters and how the undertaking manages those

risks; and

(e) key indicators necessary

for

the

disclosures

referred to in paragraphs (a) to (d).

(2) Small undertakings and medium-sized undertakings, small

and non-complex institutions and captive insurance and reinsurance

undertakings that rely on the derogation referred to in the sub-

regulation (1) shall report in accordance with the sustainability

reporting standards for small undertakings and medium-sized

undertakings referred to in Article 29c of the Accounting Directive.

For financial years starting before 1 January 2028, by way Information

of derogation from regulation 6, small undertakings and medium-sized referred

regulation 6.

undertakings which are listed public-interest entities may decide not to

include in their directors’ report the information referred to in

regulation 6. In such cases, the undertaking shall nevertheless, briefly

state in its directors’ report the basis on which the sustainability

reporting was not provided.

Undertakings that comply with the requirements Compliance

established in regulations 6 to 9 and undertakings that rely on the with

of the Act.

derogation stipulated in regulation 11 shall be deemed to have

complied with the requirement established in article 177(2a) of the

Act.

(1)

On condition that the requisites set out in sub- Reporting

regulation (3) are met, an undertaking which is a subsidiary exemptions

subsidiary

undertaking shall be exempted from the obligations set out in undertakings

included in

regulations 6 to 9, hereinafter referred to as the "exempted subsidiary consolidated

undertaking", if such undertaking and its subsidiary undertakings are directors’

report.

included in the consolidated directors’ report of a parent undertaking,

drawn up in accordance with requirements equivalent to those set

out in article 177 of the Act and regulations 15 to 22.

(2) An undertaking which is a subsidiary undertaking of a

parent undertaking that is established in a third country shall also be

exempted from the obligations set out in regulations 6 to 9 where

such undertaking and its subsidiary undertakings are included in the

consolidated sustainability reporting of that parent undertaking that is

established in a third country and where that consolidated

sustainability reporting is carried out in accordance with the

sustainability reporting standards or in a manner equivalent to those

sustainability reporting standards, as determined in accordance with

an implementing act on the equivalence of sustainability reporting

standards adopted pursuant to the third sub-paragraph of Article 23(4)

of the Transparency Directive.

(3) The exemption referred to in sub-regulations (1) and (2)

shall be subject to the following conditions

(a) the directors’ report of the exempted subsidiary

undertaking shall contain all of the following information

(i)

the name and registered office of the parent

undertaking that reports information at group level in

accordance with this regulation or in a manner equivalent

to the sustainability reporting standards adopted pursuant

to regulation 23, as determined in accordance with an

implementing act on the equivalence of sustainability

reporting standards adopted pursuant to the third sub-

paragraph of Article 23(4) of the Transparency Directive;

(ii) the weblinks to the consolidated directors’

report of the parent undertaking or, where applicable, to

the consolidated sustainability reporting of the parent

undertaking, as referred to in sub-regulation (1), and to the

assurance report referred to in article 179C(2) of the Act or

to the assurance report referred to in paragraph (b);

(iii) the information that the undertaking is exempt

from the obligations prescribed in regulations 6 to 9;

(b) if the parent undertaking is established in a third

country, its consolidated sustainability reporting and the

assurance report on the consolidated sustainability reporting,

expressed by one (1) or more persons or firms authorised to

prepare a report on the assurance of sustainability reporting

under the law governing that parent undertaking, are published

in accordance with article 183 of the Act, and in accordance

with the applicable law regulating the exempted subsidiary

undertaking;

(c) if the parent undertaking is established in a third

country, the disclosures stipulated in Article 8 of Regulation

(EU) 2020/852, covering the activities carried out by the

exempted subsidiary undertaking established in the Union and

its subsidiary undertakings, are included in the directors’ report

of the exempted subsidiary undertaking, or in the consolidated

sustainability reporting carried out by the parent undertaking

established in a third country.

(4) The consolidated directors’ report or, where applicable, the

consolidated sustainability report of the parent undertaking shall be

published in either the Maltese or English language.

(5) Any necessary translation into the Maltese or English

language shall be provided and any translation that has not been

certified shall include a statement to this effect.

(6) Undertakings which are exempted from preparing a

directors’ report in accordance with Article 37 of the Accounting

Directive shall not be obliged to provide the information referred to in

sub-regulation (3)(a)(i) to (iii), provided that such undertakings

publish the consolidated directors’ report prepared by the relevant

parent undertaking in accordance with Article 37 of the Accounting

Directive.

(7) For the purposes of sub-regulations (1) and (2), and where

Article 10 of Regulation (EU) No. 575/2013 applies, credit

institutions that are permanently affiliated to a central body which

supervises them under the conditions stipulated in Article 10 of

Regulation (EU) No. 575/2013 shall be treated as subsidiary

undertakings of such central body.

(8) For the purposes of sub-regulations (1) and (2), insurance

undertakings that are part of a group, on the basis of financial

relationships as referred to in paragraph (b) of the definition "group"

in article 2(1) of the Insurance Business Act, and which are subject to Cap. 403.

group supervision in accordance with article 32A of the said Act,

shall be treated as subsidiary undertakings of the parent undertaking

of such group.

(9) The exemption stipulated in sub-regulations (1) to (8) shall

also apply to public-interest entities subject to the satisfaction of the

relevant requirements of this regulation, with the exception of large

undertakings which are listed public-interest entities.

(1) Parent undertakings of a large group shall include in Consolidated

the consolidated directors’ report information necessary to understand sustainability

reporting.

the group’s impacts on sustainability matters, information on the key

intangible resources and information necessary to understand how

sustainability matters affect the group’s development, performance and

position.

(2) The information referred to in sub-regulation (1) shall be

clearly identifiable within the consolidated directors’ report, through

a dedicated section of the said report.

(1)

The information referred to in regulation 15 shall Information

referred to in

contain

regulation 15.

(a) a brief description of the group’s business model and

strategy, including

(i) the resilience of the group’s business model

and strategy in relation to risks related to sustainability

matters;

(ii)

the opportunities for the group related to

sustainability matters;

(iii) the

plans

of

the

group,

including

implementing actions and related financial and investment

plans, to ensure that its business model and strategy are

compatible with the transition to a sustainable economy

and with the limiting of global warming to one point five

degrees Celsius (1,5°C) in line with the Paris Agreement

and the objective of achieving climate neutrality by 2050

as established in Regulation (EU) 2021/1119 of the

European Parliament and of the Council of 30 June 2021

establishing the framework for achieving climate neutrality

and amending Regulations (EC) No 401/2009 and (EU)

2018/1999 (‘European Climate Law’) and, where relevant,

the exposure of the group to coal-, oil- and gas-related

activities;

(iv) how the group’s business model and strategy

take account of the interests of the group’s stakeholders

and of the impacts of the group on sustainability matters;

(v) how the group’s strategy has been implemented

with regard to sustainability matters;

(b) a description of the time-bound targets related to

sustainability matters set by the group, including where

appropriate, absolute greenhouse gas emission reduction targets

at least for 2030 and 2050, a description of the progress the

group has made towards achieving those targets, and a

statement of whether the group’s targets related to environmental

factors are based on conclusive scientific evidence;

(c) a description of the role of the directors with regard to

sustainability matters, and of their expertise and skills in relation

to fulfilling that role or the access these directors have to such

expertise and skills;

(d) a description of the group’s policies in relation to

sustainability matters;

(e) information about the existence of incentive

schemes linked to sustainability matters which are offered to the

directors;

(f)

a description of

(i)

the due diligence process implemented by the

group with regard to sustainability matters, and where

applicable, in line with Union requirements on

undertakings to conduct a due diligence process;

(ii) the principal actual or potential adverse

impacts connected with the group’s own operations and

with its value chain, including its products and services, its

business relationships and its supply chain, actions taken

to identify and monitor those impacts, and other adverse

impacts which the parent undertaking is required to identify

pursuant to other Union requirements to conduct a due

diligence process;

(iii) any actions taken by the group to prevent,

mitigate, remediate or bring an end to actual or potential

adverse impacts, and the result of such actions;

(g) a description of the principal risks to the group

related to sustainability matters, including the group’s principal

dependencies on those matters, and how the group manages

those risks; and

(h) indicators relevant to the disclosures referred to in

paragraphs (a) to (g).

(2) Parent undertakings shall report the process carried out to

identify the information that they have included in the consolidated

directors’ report in accordance with regulation 15. The information

listed in regulation 16(1) shall include information related to short-,

medium- and long-term time horizons, as applicable.

(3) Undertakings shall also include the disclosures required in

terms of Article 8 of Regulation (EU) 2020/852 as regards information

on how and to what extent the undertaking’s activities are associated

with economic activities that qualify as environmentally sustainable.

(1) Where applicable, the information referred to in Information

regulations 15 and 16 shall contain information about the group’s own about

group’s own

operations and about its value chain, including its products and operations.

services, its business relationships and its supply chain.

(2) For the first three (3) years of the application of the

measures referred to in regulation 15, and in the event that not all the

necessary information regarding its value chain is available, the parent

undertaking shall explain the efforts made to obtain the necessary

information about its value chain, the reasons on the basis of which

not all of the necessary information could be obtained, and its plans to

obtain the necessary information in the future.

(3) Where applicable, the information referred to in regulations

15 and 16 shall also include references to, and additional explanations

of, the other information included in the consolidated directors’ report

in accordance with article 177 of the Act, and the amounts reported in

the consolidated annual accounts.

(4) Information relating to impending developments or matters

in the course of negotiation may be omitted in exceptional cases

where, in the duly justified opinion of the directors, acting within the

competences assigned to them by national law and having collective

responsibility for that opinion, the disclosure of such information

would be seriously prejudicial to the commercial position of the

undertaking, provided that such omission does not prevent a fair and

balanced understanding of the undertaking’s development,

performance, position and impact of its activity.

(1) Where the reporting undertaking identifies

significant differences between the risks for, or impacts of, the group

and the risks for, or impacts of, one (1) or more of its subsidiary

undertakings, the undertaking shall provide an adequate understanding

of, as appropriate, the risks for, and impacts of, the subsidiary

undertaking or subsidiary undertakings concerned.

(2) Undertakings shall indicate which subsidiary undertakings

included in the consolidation are exempt from annual or consolidated

sustainability reporting pursuant to regulation 14(1) to (8) or

regulation 22(1) to (8), respectively.

Parent undertakings shall report the information referred to

in regulations 15 to 17 in accordance with the sustainability reporting

standards adopted pursuant to regulation 23.

The board of directors of the parent 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.

A parent undertaking that complies with the requirements

prescribed in regulations 15 to 19 shall be deemed to have complied

with the sustainability requirements prescribed in article 177 of the

Act and regulations 6 to 14.

(1) On condition that the requisites prescribed in sub-

regulation (3) are met, a parent undertaking which is a subsidiary

undertaking shall be exempt from the obligations prescribed in

regulations 15 to 19 (the "exempt parent undertaking") if such parent

undertaking and its subsidiary undertakings are included in the

consolidated directors’ report of another undertaking, drawn up in

accordance with article 177 of the Act and regulations 15 to 22.

(2) A parent undertaking which is a subsidiary undertaking of

a parent undertaking that is established in a third country shall also be

exempt from the obligations prescribed in regulations 15 to 19 where

such parent undertaking and its subsidiary undertakings are included

in the consolidated sustainability reporting of such parent undertaking

that is established in a third country and where that consolidated

sustainability reporting is carried out in accordance with the

sustainability reporting standards or in a manner equivalent to those

sustainability reporting standards, as determined in accordance with

an implementing act on the equivalence of sustainability reporting

standards adopted pursuant to the third sub-paragraph of Article 23(4)

of the Transparency Directive.

(3) The exemption referred to in sub-regulations (1) and (2)

shall be subject to the following conditions

(a) the directors’ report of the exempt parent

undertaking shall contain all of the following information

(i) the name and registered office of the parent

undertaking that reports information at group level in

accordance with this regulation or in a manner equivalent

to the sustainability reporting standards, as determined in

accordance with an implementing act on the equivalence of

sustainability reporting standards adopted pursuant to the

third sub-paragraph of Article 23(4) of the Transparency

Directive;

(ii) the weblinks to the consolidated directors’

report of the parent undertaking or, where applicable, to

the consolidated sustainability reporting of the parent

undertaking, as referred to in sub-regulation (1) and (2),

and to the assurance report referred to in Article 179C(2)

of the Act or to the assurance report referred to in

paragraph (b); and

(iii) the information that the parent undertaking is

exempt from the obligations prescribed in regulations 15

to 19;

(b) if the parent undertaking is established in a third

country, its consolidated sustainability reporting and the

assurance report, expressed by one (1) or more persons or firms

authorised to prepare a report on the assurance of sustainability

reporting under Maltese law, shall be published in accordance

with article 183 of the Act, and in accordance with the applicable

law regulating the exempted parent undertaking;

(c) if the parent undertaking is established in a third

country, the disclosures stipulated in Article 8 of Regulation

(EU) 2020/852, covering the activities carried out by the

subsidiary undertaking established in the Union and exempted

from sustainability reporting on the basis of regulation 14(1) to

(8), shall be included in the directors’ report of the exempt

parent undertaking, or in the consolidated sustainability

reporting carried out by the parent undertaking established in a

third country.

(4) The consolidated directors’ report or, where applicable, the

consolidated sustainability report of the parent undertaking shall be

published in either the Maltese or English language.

(5) Any necessary translation into the Maltese or English

language shall be provided and any translation that has not been

certified shall include a statement to this effect.

(6) Parent undertakings which are exempt from preparing a

directors’ report pursuant to article 174 of the Act shall not be obliged

to provide the information referred to in sub-regulation (3)(a)(i) to

(iii), provided that such undertakings publish the consolidated

directors’ report in accordance with article 174 of the Act.

(7) For the purposes of sub-regulations (1) and (2), and where

Article 10 of Regulation (EU) No 575/2013 applies, credit institutions

that are permanently affiliated to a central body which supervises

them under the conditions stipulated in Article 10 of Regulation (EU)

No 575/2013 shall be treated as subsidiary undertakings of such

central body.

(8) For the purposes of sub-regulations (1) and (2), insurance

undertakings that are part of a group, on the basis of financial

relationships as referred to in paragraph (b) of the definition of "group"

in article 2(1) of the Insurance Business Act, and which are subject

to group supervision in accordance with article 32A of the said Act,

shall be treated as subsidiary undertakings of the parent undertaking

of such group.

(9) The exemption stipulated in sub-regulations (1) to (8) shall

also apply to public-interest entities subject to the satisfaction of the

requirements of this regulation, with the exception of large

undertakings which are listed public-interest entities.

Sustainability reporting standards shall specify the Sustainability

information that undertakings are to report in accordance with reporting

standards.

regulations 6 to 22 and, where relevant, shall specify the structure to be

used to submit such information.

(1) Undertakings subject to the requirements of Single

regulations 6 to 14, shall prepare their directors’ report in the electronic

reporting

electronic reporting format specified in Article 3 of Commission format.

Delegated Regulation (EU) 2019/815 of 17 December 2018

supplementing Directive 2004/109/EC of the European Parliament and

of the Council with regard to regulatory technical standards on the

specification of a single electronic reporting format and shall mark up

their sustainability reporting, including the disclosures provided for in

Article 8 of Regulation (EU) 2020/852, in accordance with the

electronic reporting format specified in that Delegated Regulation.

(2) Parent undertakings subject to the requirements of

regulations 15 to 22 shall prepare their consolidated directors’ report

in the electronic reporting format specified in Article 3 of Delegated

Regulation (EU) 2019/815 of 17 December 2018 supplementing

Directive 2004/109/EC of the European Parliament and of the Council

with regard to regulatory technical standards on the specification of a

single electronic reporting format and shall mark up their sustainability

reporting, including the disclosures provided for in Article 8 of

Regulation (EU) 2020/852, in accordance with the electronic

reporting format specified in the said Delegated Regulation.

(1) A subsidiary undertaking established in Malta whose Sustainability

ultimate parent undertaking is governed by the law of a third country reports

concerning

shall publish and make accessible a sustainability report covering the Maltese

subsidiaries and

information specified in paragraph (a)(iii) to (v), paragraphs (b) to (f) branches of

and, where appropriate, paragraph (h) of regulation 16(1) at the group third-country

undertakings.

level of such ultimate third-country parent undertaking.

(2) The provisions of sub-regulation (1) shall only apply to

large subsidiary undertakings and to small undertakings and medium-

sized subsidiary undertakings which are listed public-interest entities.

(1) A branch located in Malta, being a branch of an

undertaking governed by the law of a third country, which is either

not part of a group or is ultimately held by an undertaking that is

formed in accordance with the law of a third country, shall publish

and make accessible a sustainability report covering the information

specified in paragraph (a)(iii) to (v), paragraphs (b) to (f) and, where

appropriate, paragraph (h) at the group level of regulation 16(1) or, if

not applicable, a t the individual level, of the third-country

undertaking.

(2) The rule referred to in sub-regulation (1) shall only apply

to a branch where the third-country undertaking does not have a

subsidiary undertaking as referred to in regulation 25(1), and where the

branch generated a net turnover of more than forty million euro

(€40,000,000) in the preceding financial year.

The provisions of regulations 25(1) and 26(1) shall only

apply to the subsidiary undertakings or branches referred to in those

sub-regulations where the third-country undertaking, at its group level,

or, if not applicable, at the individual level, generated a net turnover of

more than one hundred and fifty million euro (€150,000,000) in the

Union for each of the last two (2) consecutive financial years.

Subsidiary undertakings or branches referred to in

regulations 25(1) and 26(1) shall submit to the relevant competent

authorities, information about the net turnover generated in Malta and

in the Union by the third-country undertakings concerned.

(1)

The sustainability report communicated by the

subsidiary undertaking or branch of a third country ultimate parent

referred to in regulations 25 to 28 shall be drawn up in accordance with

the sustainability reporting standards applicable to third country

undertakings as may be adopted by the Commission from time to

time.

(2) By way of derogation from sub-regulation (1), the

sustainability report of a third country ultimate parent referred to in

regulations 25 to 28 may be drawn up in accordance with the

sustainability reporting standards adopted pursuant to regulation 23

or in a manner equivalent to those sustainability reporting standards, as

determined in accordance with an implementing act adopted by the

Commission, on the equivalence of sustainability reporting standards.

(3) Where the information required to draw up the

sustainability report referred to in sub-regulation (1) is not available,

the subsidiary undertaking or branch referred to in regulations 25 to

28 shall request the third-country undertaking to provide them with

all information necessary to enable them to meet their obligations.

(4) In the event that not all the required information is

provided, the subsidiary undertaking or branch referred to regulations

25 to 28 shall draw up, publish and make accessible the sustainability

report referred to in regulations 25 to 28, containing all information in

its possession, obtained or acquired, and issue a statement indicating

that the third-country undertaking did not make the necessary

information available.

(1) The sustainability report referred to in regulations Publication of

25 to 28 shall, upon publication, be accompanied by an assurance sustainability

report.

report expressed by one (1) or more persons or firms authorised to

provide assurance of sustainability reporting under the national law of

the third-country undertaking or of a Member State.

(2) In the event that the third-country undertaking does not

provide the assurance report in accordance with sub-regulation (1),

the subsidiary undertaking or branch shall issue a statement

indicating that the third-country undertaking did not make the

necessary assurance report available.

(1)

The branches of third-country undertakings shall Responsibility

be responsible for ensuring, to the best of their knowledge and ability, for

publishing and

that their sustainability report is drawn up in accordance with making

accessible

regulations 25 to 30, and that such report is published and made sustainability

reports

accessible in accordance with regulation 32.

concerning

third-country

undertakings.

(2) The directors of the subsidiary undertakings referred to in

regulations 25 to 30 shall have collective responsibility for ensuring, to

the best of their knowledge and ability, that their sustainability report

shall be drawn up in accordance with regulations 25 to 30, and that

such report shall be published and made accessible in accordance with

regulation 32.

(1) The subsidiary undertakings and branches referred to Subsidiary

in regulations 25 to 28 shall publish their sustainability report, undertakings

and branches.

together with the assurance report and, where applicable, the statement

mentioned in regulation 29(4) within twelve (12) months of the

balance sheet date of the financial year for which the report is drawn

up, in accordance with the relevant provisions of the Act.

(2) The sustainability report together with the assurance report

and, where applicable, with the statement published in accordance

with sub-regulation (1), shall be made accessible to the public upon

request, on the website of the Malta Business Registry at a price not

exceeding its administrative cost, and the said documents shall be

made accessible to the public in the Maltese or English language, not

later than twelve (12) months after the balance sheet date of the

financial year for which the report is drawn up. In the case that the

report is published in a language which is not English or Maltese but

is at least one (1) of the official languages of the Union, there shall be

annexed to the copy of such document a translation of it in English or

Maltese, certified to be a correct translation in such a manner as may

be prescribed.

(3) The said sustainability report may also be published on the

website of the subsidiary undertaking or the branch as referred to in

regulations 25 to 28, not later than twelve (12) months after the

balance sheet date of the financial year for which the report is drawn

up in English or Maltese, or a copy of which is translated in English

or Maltese, certified to be a correct translation in such a manner as

may be prescribed.

(1) Auditors and audit firms shall carry out the assurance

of sustainability reporting in compliance with the assurance standards

adopted by the Commission providing initially for limited assurance

standards setting out the procedures that the auditors and the audit

firms shall perform in order to draw their conclusions on the assurance

of sustainability reporting, including engagement planning, risk

consideration and response to risks and type of conclusions to be

included in the assurance report on sustainability reporting or, where

relevant, in the audit report

Provided that as long as the Commission has not adopted

such assurance standards, auditors and audit firms shall carry out the

assurance of sustainability reporting in compliance with standards as

adopted in terms of the Accountancy Profession Act and any

regulations issued thereunder.

(2) Auditors and audit firms shall, from time to time, carry

out the assurance of sustainability reporting in compliance with

reasonable assurance standards to be adopted by the European

Commission.

(1) In the case of assurance engagements concerning the

consolidated sustainability reporting of a group of undertakings, the

documentation retained by the group auditor shall be such as to enable

the Board to review the work of the group auditor to ensure that

(a) in relation to the consolidated sustainability

reporting, the group auditor bears the full responsibility for the

assurance report on sustainability reporting referred to in

regulation 35;

(b) the group auditor evaluates the assurance work

performed by the third-country auditors, statutory auditors, third-

country audit entities or audit firms for the purpose of the

assurance of consolidated sustainability reporting and documents

the nature, timing and extent of the work performed by those

auditors, including, where applicable, the group auditor’s review

of relevant parts of those auditors’ assurance documentation;

and

(c) the group auditor reviews the assurance work

performed by third-country auditors, statutory auditors, third-

country audit entities or audit firms for the purpose of the

assurance of consolidated sustainability reporting and documents

it.

(2) For the purposes of sub-article (1)(c), the group auditor

shall request the agreement of the third-country auditors, statutory

auditors, third-country audit entities or audit firms concerned to

transfer relevant documentation during the conduct of the assurance

of consolidated sustainability reporting, as a condition of the reliance

by the group auditor on the work of those third-country auditors,

statutory auditors, third-country audit entities or audit firms.

(3) Where the group auditor is unable to comply with the

provisions of sub-regulation (1)(c), the group auditor shall take

appropriate measures and inform the Board. Such measures shall,

where appropriate, include carrying out additional assurance work,

either directly or by outsourcing such tasks, in the relevant subsidiary.

(4) Where the group auditor is subject to a quality assurance

review or an investigation concerning the assurance of consolidated

sustainability reporting of a group of undertakings, the group auditor

shall when requested, make available to the Board the relevant

documentation, which is retained concerning the assurance work

performed by the respective, third-country auditors, statutory auditors,

third-country audit entities or audit firms for the purpose of the

assurance of consolidated sustainability reporting, including any

working papers relevant to the assurance of consolidated

sustainability reporting.

(5) The Board may request additional documentation on the

assurance work performed by any statutory auditors or audit firms for

the purpose of the assurance of consolidated sustainability reporting

from the relevant competent authorities pursuant to regulation 8 of the

Accountancy Profession Regulations.

(6) Where the assurance of sustainability reporting of a parent

undertaking or a subsidiary undertaking of a group of undertakings is

carried out by any auditors or audit entities from a third country, the

Board may request additional documentation on the assurance work

performed by any third-country auditors or third-country audit entities

from the relevant competent authorities from third countries through

working arrangements.

(7) By way of derogation from sub-regulation (6), where any

third-country auditors or audit entities that have no working

arrangements carried out the assurance of sustainability reporting of a

parent undertaking or a subsidiary undertaking of a group of

undertakings, the group auditor shall when requested, also be

responsible for ensuring proper delivery of the additional

documentation on the assurance work performed by such third-country

auditors or audit entities, including the working papers relevant to the

assurance of consolidated sustainability reporting. In order to ensure

such delivery, the group auditor shall retain a copy of such

documentation, or alternatively agree with the third-country auditors

or audit entities that he is to be given unrestricted access to such

documentation upon request, or take any other appropriate action.

(8) Where assurance working papers cannot, for legal or other

reasons, be passed from a third country to the group auditor, the

documentation retained by the group auditor shall include evidence

that the group auditor has undertaken the appropriate procedures in

order to gain access to the assurance documentation, and in the case

of impediments other than legal ones arising from the legislation of

the third country concerned, evidence supporting the existence of

such impediments.

(1)

The statutory auditor or audit firm shall submit the

results of the assurance of sustainability reporting in an assurance

report on sustainability reporting. That report shall be prepared in

compliance with standards adopted in terms of the Accountancy

Profession Act or any regulations issued thereunder. The assurance

report on sustainability reporting shall be in writing and shall

(a) identify the entity whose annual or consolidated

sustainability reporting is the subject of the assurance

engagement; specify the annual or consolidated sustainability

reporting and the date and period it covers; and identify the

sustainability reporting framework that has been applied in its

preparation; and

(b) include a description of the scope of the assurance of

sustainability reporting which shall as a minimum, identify the

assurance standards in accordance with which the assurance of

sustainability reporting was conducted.

(2) Where the assurance of sustainability reporting was carried

out by more than one (1) auditor or audit firm, the auditors or the audit

firms shall agree on the results of the assurance of sustainability

reporting and submit a joint report and opinion. In the case of

disagreement, each auditor or audit firm shall submit their opinion in a

separate paragraph of the assurance report on sustainability reporting

and shall state the reason for the disagreement.

(3)

The assurance report on sustainability reporting shall be

signed and dated by the auditor carrying out the assurance of

sustainability reporting. Where an audit firm carries out the assurance

of sustainability reporting, the assurance report on sustainability

reporting shall bear the signature of at least the auditors carrying out

the assurance of sustainability reporting on behalf of the audit firm.

Where more than one (1) auditor or audit firm have been

simultaneously engaged, the assurance report on sustainability

reporting shall be signed by all the auditors or at least by the auditors

carrying out the assurance of sustainability reporting on behalf of

every audit firm.

(4) The copy of the assurance report on sustainability which is

delivered to the Registrar shall state the names of the auditors

involved. In exceptional circumstances, the Minister may at his

discretion, determine that such signatures may not be disclosed to the

public if such disclosure may lead to an imminent and significant

threat to the personal security of any person. In any case, the names of

the persons involved in the carrying out of the assurance of

sustainability reporting shall be known to the Registrar.

(5) Where the same auditor carries out the statutory audit of

annual financial statements and the assurance of sustainability

reporting, the assurance report on sustainability reporting may be

included as a separate section of the audit report referred to under

article 179A of the Act.

(6) The report of the auditor or the audit firm on the

consolidated sustainability reporting shall comply with the

requirements prescribed in sub-regulations (1) to (5).

The provisions of regulations 8(1) to (10) and regulation Regulatory

8A of the Accountancy Profession Regulations, as regards the arrangements

between Member

statutory audit of financial statements, shall apply, mutatis mutandis, to States

the assurance of

the assurance of sustainability reporting.

sustainability

reporting.

The provisions of article 151 of the Act shall apply to the Appointment of

appointment of the auditor or audit firm for the purpose of the auditors

firms.

assurance of sustainability reporting.

Shareholders of large undertakings subject to regulations 6 Shareholders of

to 22, except for listed public-interest entities, and which represent large

undertakings

more than five percent (5%) of the voting rights or five percent (5%) of subject

regulations 6 to

the capital of the undertaking, acting individually or collectively, shall 22.

have the right to table a draft resolution to be adopted in the general

meeting, requiring that an auditor that does not belong to the same

audit firm or network as the auditor or audit firm carrying out the

statutory audit prepare a report on certain elements of the sustainability

reporting and that such report be made available to the general

meeting.

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.

The functions assigned to the audit committee and relating

to sustainability reporting and to the assurance of sustainability

reporting may be performed by the Board of directors as a whole or

by a dedicated body established by the Board of directors.

(1) Until 6th January 2030, a Union subsidiary

undertaking which is subject to regulations 6 to 14 relating to

sustainability reporting or regulations 15 to 22 relating to

consolidated sustainability reporting, and whose parent undertaking is

not governed by the laws of a Member State may prepare

consolidated sustainability reporting, in accordance with regulations

15 to 22, that includes all Union subsidiary undertakings of such parent

undertaking that are subject to sustainability reporting in terms of

regulations 6 to 14 or consolidated sustainability reporting in terms of

regulations 15 to 22.

(2) Until 6th January 2030, the consolidated sustainability

reporting referred to in sub-regulation (1) shall include the

disclosures stipulated in Article 8 of Regulation (EU) 2020/852, on the

establishment of a framework to facilitate sustainable investment, and

sustainability-related disclosures in the financial services sector,

covering the activities carried out by all Union subsidiary

undertakings of the parent undertaking referred to in sub-regulation (1)

that are subject to sustainability reporting in terms of regulations 6 to

14 or consolidated sustainability reporting in terms of regulations 15 to

22. (3) The Union subsidiary undertaking referred to in sub-

regulation (1) shall be one (1) of the Union subsidiary undertakings of

the group that generated the greatest turnover in the Union in at least

one (1) of the preceding five (5) financial years, on a consolidated

basis, where applicable.

(4) The consolidated sustainability reporting referred to in sub-

regulation (1) shall be published in accordance with article 183 of the

Act.

(5) For the purpose of the exemption stipulated in regulation

14(1) to (8) and regulation 22(1) to (8), reporting in accordance with

regulation 41(1) shall be considered to be reporting by a parent

undertaking at group level with respect to the undertakings included

in the consolidation. Reporting in accordance with regulation 41(1)

and (2) shall be considered to fulfil the conditions referred to in

regulation 14(3)(c) and regulation 22(3)(c), respectively.

€1.35