Act No. I of 2026, assented to on 26 February 2026, amends multiple pieces of legislation to transpose the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) into Maltese law. It makes coordinated amendments to the Accountancy Profession Act (Cap. 281), the Companies Act (Cap. 386), the Accountancy Profession Regulations (S.L. 281.01), the Accountancy Profession (Accounting and Auditing Standards) Regulations (S.L. 281.02), and the Companies (Amendment) Act, 2025 (Act No. XVIII of 2025). The Act also references the Corporate Sustainability Reporting Regulations (S.L. 386.31) as the primary implementing subsidiary legislation for the detailed rules.

Part I (articles 2–13) amends the Accountancy Profession Act (Cap. 281). Article 3 updates definitions in article 2(1) of that Act, introducing or revising terms such as 'audit firm' (now expressly covering assurance of sustainability reporting), 'auditor'/'statutory auditor', 'assurance of sustainability reporting', 'group auditor', 'independent assurance services provider', 'key sustainability partner', 'practising certificate in auditing' (PCA), 'practising certificate in sustainability assurance' (PCSA), 'sustainability reporting', and 'sustainability reporting standards'. Articles 4–5 amend articles 3 and 4 of the principal Act to introduce a new approval pathway (article 3(3a)) for statutory auditors wishing to carry out assurance of sustainability reporting, with transitional provisions: auditors approved before 1 January 2024 are not subject to article 3(3a); persons in the approval process on 1 January 2024 are exempt provided they complete it by 1 January 2026; and auditors approved before 1 January 2026 who wish to carry out sustainability assurance must acquire the necessary knowledge as specified in regulations or Board directives. Article 6 amends article 6(1) of the principal Act to require that Accountancy Board members be knowledgeable also in assurance of sustainability reporting. Articles 7–11 extend supervisory, investigatory, and sanctioning powers of the Board to cover assurance of sustainability reporting alongside statutory audit, including new sanctions: a temporary prohibition of up to three years banning a statutory auditor, audit firm, or key sustainability partner from carrying out assurance of sustainability reporting (article 14(2)(ca)), and a declaration that an assurance report does not meet regulatory requirements (article 14(2)(da)). A new article 10B is added allowing audit firms holding an article 10 authorisation to also hold a Board authorisation to practise assurance of sustainability reporting. Article 12 amends article 18A to extend independence and non-audit service prohibition rules to sustainability assurance engagements of public-interest entities, including restrictions on prohibited non-audit services during the assurance period. A new article 18B is added requiring statutory auditors and audit firms carrying out audits or sustainability assurance of public-interest entities to report suspected irregularities, including fraud, to the audited entity and, if uninvestigated, to the Board.

Part II (articles 14–31) amends the Companies Act (Cap. 386). Article 15 adds definitions of 'consolidated sustainability reporting', 'independent assurance services provider', and 'sustainability reporting' to article 2(1). Article 16 adds the Corporate Sustainability Reporting Directive (EU) 2022/2464 to the list of EU instruments in article 3A. Articles 17 and 27 and 31 delete redundant references to 'certified public accountant and auditor' from articles 122(7), 305(1), and the Tenth Schedule respectively. Article 18 extends the auditor appointment provisions of article 151 to the appointment of auditors for sustainability assurance. Article 19 amends article 157 to extend the protection against dismissal to disagreements over sustainability reporting or assurance procedures, and extends the notification obligation to sustainability assurance. Article 20 substitutes article 172 to place collective responsibility on directors for drawing up and publishing sustainability reporting (including consolidated sustainability reporting) as part of the directors' report. Articles 21–22 amend articles 174 and 177 so that exemptions from consolidated accounts preparation do not apply to sustainability reporting requirements under regulations 15–22 of S.L. 386.31, and to require directors' reports and consolidated directors' reports to comply with S.L. 386.31 as to sustainability information, format, and non-financial key performance indicators. Article 24 inserts a new article 179C requiring auditors to make an assurance report on sustainability reporting based on a limited assurance engagement covering compliance with the Accounting Directive, S.L. 386.31, sustainability reporting standards adopted by the Commission, the single electronic reporting format, and Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation); undertakings may appoint a different auditor for sustainability assurance than for the statutory audit. Article 25 amends article 183 to require delivery of the assurance report to the Registrar alongside annual accounts and the directors' report (including sustainability reporting), and introduces new sub-articles 183(4a) and (4b) allowing undertakings subject to regulations 6–22 of S.L. 386.31 to publish the directors' report on their website free of charge. Article 28 adds a new article 425(14) allowing the Minister to make regulations for large undertakings to ensure compliance with corporate sustainability reporting. Article 29 updates the Third Schedule definitions of 'large groups', 'large undertakings', 'medium-sized groups', and 'medium-sized undertakings' with revised financial thresholds: large undertakings exceed two of (i) balance sheet total €25 million, (ii) net turnover €50 million, (iii) 250 employees; large groups exceed two of (i) €25 million net/€30 million gross balance sheet, (ii) €50 million net/€60 million gross turnover, (iii) 250 employees. Article 30 amends the Sixth Schedule so that item 5 exempts medium-sized undertakings outside S.L. 386.31's scope from sustainability-related disclosure obligations, item 8 now requires additional disclosures by undertakings as defined in S.L. 386.31, and items 9–13 are deleted.

Parts III and IV (articles 32–40) amend S.L. 281.01 and S.L. 281.02. The Accountancy Profession Regulations are amended to align definitions with the Act, to add 'issuing of reports with respect to sustainability matters' as a warrant-holder service, to update register entries to indicate whether auditors and firms are approved for sustainability assurance, and to specify the theoretical knowledge subjects for the sustainability assurance examination (legal requirements, sustainability analysis, due diligence, and assurance standards under S.L. 386.31). The Accountancy Profession (Accounting and Auditing Standards) Regulations are amended to update the definition of 'international auditing standards' to cover sustainability assurance, and a new regulation 6 requires auditors and audit firms to carry out sustainability assurance in compliance with international auditing standards, with EU-adopted assurance standards prevailing over conflicting international standards.

Part V (articles 41–42) substitutes article 61 of the Companies (Amendment) Act, 2025 (Act No. XVIII of 2025) to replace the Eleventh Schedule to that Act with a comprehensive updated schedule of administrative penalties under the Companies Act, including a new entry for article 179C(4) (officers failing to state auditors' names in the assurance report, penalty €465, no daily penalty) and an updated entry for article 183(6) (directors failing to deliver or delivering defective annual accounts or defective sustainability reporting information, penalty €2,329, daily penalty €46).

Commencement: Article 1(2) provides that 'This Act 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 this Act.' There is no automatic commencement on publication; commencement depends entirely on Ministerial Gazette notices, which may be staged.

Corporate Sustainability Reporting (Act I of 2026)