Regolamenti dwar Corporate Sustainability Reporting Għadu mhux fis-seħħ

CORPORATE SUSTAINABILITY REPORTING

LEĠISLAZZJONI SUSSIDJARJA 386.31

REGOLAMENTI DWAR CORPORATE

SUSTAINABILITY REPORTING

*

L-AVVIŻ LEGALI 39 tal-2026.

Dawn ir-regolamenti ġew pubblikati bl-ilsien Ingliż biss.

*Għadu mhux fis-seħħ.

(1)

The title of these regulations is the Corporate

Sustainability Reporting Regulations.

(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

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

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

meaning assigned to them in the Companies Act, the Accountancy

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;

*Not yet in force.

CORPORATE SUSTAINABILITY REPORTING

"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

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

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

CORPORATE SUSTAINABILITY REPORTING

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 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

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

CORPORATE SUSTAINABILITY REPORTING

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

(a)

for financial years starting on or after 1

January 2026

(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 2027

(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 f ive

hun dred ( 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

(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 d irect or ’ rep ort sh all be delivered to

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

Act.

(1)

The information referred to in regulation 6

shall contain

(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;

CORPORATE SUSTAINABILITY REPORTING

(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

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

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

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 of derogation from regulation 6, small undertakings and medium-

sized 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

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

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-

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

undertaking shall be exempted from the obligations set out in

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

undertaking", if such undertaking and its subsidiary undertakings are

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

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 the consolidated directors’ report information necessary to

understand 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

contain

(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

CORPORATE SUSTAINABILITY REPORTING

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

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

operations and about its value chain, including its products and

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.

17.

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

information that undertakings are to report in accordance with

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

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

electronic reporting format specified in Article 3 of Commission

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 ultimate parent undertaking is governed by 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) of

regulation 16(1) at the group 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 25 to 28 shall, upon publication, be accompanied by an

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

ability, that their sustainability report is drawn up in accordance with

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

accessible in accordance with regulation 32.

(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 in regulations 25 to 28 shall publish their sustainability

report, 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

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 8A of the Accountancy Profession Regulations, as regards

the statutory audit of financial statements, shall apply, mutatis

mutandis, to the assurance of sustainability reporting.

The provisions of article 151 of the Act shall apply to

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

assurance of sustainability reporting.

Shareholders of large undertakings subject to regulations

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

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

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

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.