Transposing a moving target: Malta’s new CSRD Regulations against the backdrop of the EU’s Omnibus re‑think

Malta has just recently (and finally!) transposed the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) (the “CSRD”) into domestic law by virtue of Legal Notice 39 of 2026, titled the Corporate Sustainability Reporting Regulations, 2026 (the “Regulations”). The Regulations were published in the Supplement to the Government Gazette on 13 February 2026.

The Regulations are notable for two reasons. Firstly, they constitute a substantive and, in certain respects, expansive transposition of the CSRD as originally adopted back in 2022, and secondly, they were enacted against the backdrop of significant developments at EU level, most notably the so called Omnibus package, which has since recalibrated the scope and timing of sustainability reporting obligations across the European Union.

Sustainability Reporting under the CSRD: A Brief Overview

The CSRD is the spiritual successor of the Non Financial Reporting Directive (Directive 2014/95/EU), and has replaced limited, ‘non financial’ reporting obligations with a comprehensive ‘sustainability’ reporting regime; which reporting must form part of corporates’ management reports, and (theoretically) ought to enjoy the same weight as one’s ‘financial’ reporting.

In very broad terms, the CSRD requires in scope undertakings to disclose information necessary to understand:

• the undertaking’s impacts on sustainability matters (i.e., environmental, social, human rights and governance), the ‘inside-out’ approach, or impact materiality; and
• how sustainability matters affect the undertaking’s development, performance and position, the ‘outside-in’ approach, or financial materiality.

Reporting must be carried out in accordance with European Sustainability Reporting Standards (ESRS) adopted by the European Commission (to which there happen to have been significant changes and simplifications since the inception of the CSRD back in 2022).

As originally conceived, the CSRD applied to a wide range of entities, including all large undertakings, listed SMEs, certain financial institutions and qualifying third country groups. Pursuant to the Omnibus shift (more on that later on) applicability has been significantly watered down, such that it is anticipated that approximately 90% of the companies previously subject to CSRD will fall outside of its scope once the relevant Omnibus changes are formally promulgated into law.

The Maltese Regulations and the CSRD: Alignment and Divergences

At a structural level, the Regulations track the CSRD closely. They replicate the phased application timetable set out in the CSRD, transpose (often verbatim) the substantive disclosure requirements now reflected in articles 19a and 29a of the Accounting Directive (Directive 2013/34/EU), and generally mirror the CSRD’s approach to group reporting, subsidiary exemptions and third country undertakings.

That said, certain features merit closer attention. These include:

1. Specific scope exclusions – the Regulations expressly exclude certain entities from their scope, including the Central Bank of Malta, the Malta Development Bank and (quite interestingly) alternative investment funds and UCITS. These represent national policy choices which narrow, rather than expand, the CSRD’s reach. A further exclusion applies with respect to undertakings which, on their balance sheet dates, do no exceed the limits of at least two of the following criteria: (1) balance sheet total of €450,000, (2) net turnover of €900,000 and (3) average number of ten employees during the financial year; and
2. Shareholder driven assurance mechanisms – of particular interest is the right granted to certain shareholders (holding at least 5% of voting rights or capital) of large undertakings (except for listed public interest entities) to require that an auditor who is independent to the one carrying out the statutory audit prepares a report “on certain elements of the sustainability reporting”, and that such report be made available to the shareholders during general meeting.

The Omnibus Package: Re drawing the CSRD Landscape

As already alluded to, in 2025 the relevant European institutions agreed upon a wide ranging Omnibus package aimed at simplifying sustainability reporting requirement and reducing regulatory burden. The Omnibus reform has had two principal effects on the applicability of the CSRD:

1. Postponement of application – a “stop the clock” directive (Directive 2025/794) postponed the application of CSRD reporting for so called ‘Wave 2’ and ‘Wave 3’ reporting entities by two years; and
2. Narrowing of scope – following a political agreement brokered in December 2025 (which agreement, however, is yet to be promulgated into law) mandatory CSRD reporting is to be limited to undertakings (or groups) with more than 1,000 employees and net turnover exceeding €450 million.

The Regulations do not fully reflect the Omnibus reforms, particularly the ‘scope’ amendments referred to in (b.) immediately above. As a result, based on the current iteration of the Regulations, a significant number of Maltese undertakings who are expected to fall outside of the CSRD regime once Omnibus is fully in force, currently fall within scope of the Regulations’ reporting obligations.

It is therefore expected that in the short to medium term, Malta will be required to revisit and amend the Regulations to give effect to the full extent of the Omnibus reform. For this reason, the current framework leaves many in a state of limbo, and one would do well to continue monitoring the seesaw that is the sustainable finance space for further updates.