Summary
The Maltese Parliament passed an Act in 2016 to introduce amendments to the Companies Act and other laws, in order to implement Directive 2014/95/EU. The aim of the Act is to improve transparency and disclosure by requiring certain large companies to disclose non-financial information related to environmental, social and governance (ESG) factors in their management report. The Act applies to companies with more than 500 employees or those that meet certain turnover and balance sheet thresholds. The ESG information that companies are required to disclose includes information on their business model, policies and outcomes, risks and key performance indicators relating to environmental, social and employee matters, human rights, anti-corruption and bribery issues, and diversity on the company's board. The Act also requires companies to describe their due diligence processes in relation to these issues. Companies that fail to comply with the Act's requirements may face fines and other penalties.