- with readers working within the Oil & Gas industries
Malta has just recently transposed the Corporate Sustainability Reporting Directive (CSRD) into domestic law by virtue of Legal Notice 39 of 2026, titled the Corporate Sustainability Reporting Regulations. The Regulations set out the obligations for undertakings falling within their scope to include corporate sustainability reporting in their annual management reports, together with the relevant assurance requirements.
What is the CSRD?
The CSRD was published in December 2022 and is part of the European Green Deal package of measures aimed at making the EU climate neutral by 2050. It expands the scope and depth of sustainability reporting requirements, replacing the Non-Financial Reporting Directive (NFRD) and introducing more detailed standards — the European Sustainability Reporting Standards (ESRS) — developed by EFRAG.
Who does it apply to?
The CSRD applies in a phased approach. The first wave of entities — those already subject to the NFRD — started reporting in 2025 for the financial year 2024. In 2026, all large undertakings meeting at least two of three criteria (balance sheet total exceeding €25 million; net turnover exceeding €50 million; average of more than 250 employees) are required to report. Listed SMEs will be required to report from 2027, with an opt-out available until 2028.
The EU Omnibus Re-Think
In a significant development, the European Commission published a first Omnibus Simplification Package on 26 February 2025, proposing a number of measures aimed at reducing administrative burden across multiple EU directives, including the CSRD.
The proposed changes include a two-year postponement of CSRD reporting obligations for entities in the second wave (large undertakings not previously subject to the NFRD) and the third wave (listed SMEs), as well as an increase in the size thresholds. If adopted, this would reduce the number of companies within scope by approximately 80%.
Furthermore, the Commission has proposed the introduction of a voluntary simplified reporting standard, making it easier for companies to comply. The Commission has also signalled its intent to review value chain reporting, seeking to limit the extent to which large companies can push reporting obligations onto their smaller suppliers and partners.
Implications for Malta
Given that the vast majority of Maltese companies are SMEs, the proposed changes would have a material impact on the number of entities required to report under the CSRD. Malta's transposition through LN 39 of 2026 currently reflects the original directive text, so any changes at EU level would require corresponding amendments to the local regulations.
For now, undertakings falling within the first and second waves should continue to prepare for compliance in line with the current legal framework. Those in subsequent waves should monitor the legislative developments closely, given that the Omnibus proposals are still being negotiated and may undergo further changes.
Looking ahead
The tension between the EU's sustainability ambitions and the drive to reduce regulatory burden is expected to define much of the policy debate in the coming months. What is clear is that sustainability reporting is here to stay — the question is whether the framework will become more proportionate and workable, particularly for smaller companies.
Companies in Malta should use this period to invest in their sustainability reporting infrastructure, build internal capacity, and engage with their auditors and advisors to ensure readiness regardless of how the final framework evolves.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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