Preparing for the ESG data surge

The MFSA has continued to enforce the integration of climate and environmental risk across all banking functions, from the risk management framework to business strategy and even in remuneration policies. A major aspect includes the incorporation of environmental and climate considerations into the credit assessments, which is enforced by the EBA Guidelines on the management of ESG risks effective from January 2026. Therefore, this isn't optional, it's a regulatory requirement.

Significant Banks such as Bank of Valletta, HSBC Malta and MeDirect, supervised by the European Central Bank and having more stringent requirements, have already integrated climate criteria into their business and credit processes which include measures such as the development of ESG scorecards (requiring customer data to be effectively utilised) and offering green financing products for SMEs. 

Many local businesses are already receiving ESG questionnaires from international partners, customers, or brands they represent, seeking detailed sustainability information across a range of topics. This is largely driven by the Corporate Sustainability Reporting Directive (CSRD), which requires large European companies to report on the sustainability of their value chains, including Maltese suppliers. The Malta ESG Alliance highlights these supply chain ESG expectations as a significant challenge, with larger companies increasingly formalising their sustainability data requests from suppliers.