Malta's sustainable finance ecosystem: Government policy, stock markets, banks, insurance, asset management, brokers and professionals

A functioning sustainable finance ecosystem is one which successfully steers capital towards sustainable economic activities through a connection of cooperation across financial institutions and stakeholders, which is supported through government policy to incentivise and drive the transition towards a more sustainable economy.

Locally, the Maltese Government has established its 2050 vision for the country, with sustainable economic growth prioritising quality over quantity being a key area of focus. In this respect, the government is seeking to direct investment towards blue and green economies as part of a wider strategy to ensure a resilient country, with the intention being to promote marine sustainability, renewable energy, circular waste management, and biodiversity conservation, amongst others.

To achieve such a vision, corporates will need to embrace sustainability, undertaking the necessary business transformations to embed sustainability-related concepts into their business models. Such business transformation requires access to capital to finance the necessary transition.

Locally, the banking sector is beginning to explore its role in supporting the transition to a more sustainable economy. Encouragingly, some banks have already introduced green banking products, such as those promoting the adoption of electric vehicles and energy-efficient building solutions. While these offerings are still emerging, they represent a promising step forward. The pace of development may reflect the careful balance being maintained between the government’s national direction and the MFSA’s regulatory focus on long-term financial stability. This prudent approach ensures that sustainability-related risks are effectively managed within banking portfolios, while also laying the groundwork for more proactive, forward-looking strategies that can empower corporates to evolve their business models sustainably.

From a stock market perspective, Malta is at the early stages of embracing sustainable finance, presenting a valuable opportunity for growth and innovation. The adoption of Green Bonds by-laws by the MSE marks a significant step forward, laying the regulatory groundwork for future issuances. While only one green bond has been issued so far, this initial step demonstrates the market’s potential. As awareness and interest in sustainable investing continue to grow, there is a promising opportunity to further engage Maltese investors and align financial returns with long-term sustainability goals.

As Malta progresses toward a more sustainable economy, the local insurance sector is well-positioned to play a pivotal role. The transition will bring about innovation and technological advancements, creating opportunities for insurers to develop tailored products that address emerging risks faced by corporates. While the current focus remains on ensuring robust management of sustainability-related risks within underwriting portfolios—mirroring the approach of the banking sector—this risk-conscious foundation provides a strong platform for future strategic product development. Given the measured pace of Malta’s transition, the insurance sector’s cautious approach is understandable and offers a chance to align long-term resilience with evolving market needs.

As the financial services sector prepares to embrace for such a radical change, professionals will also be required to adapt to both the new challenges faced by the sector, and to even greater importance, to their role in connecting all respective parties together, to align a shared vision for 2050. 

Norbert Vella

Michael Dingli

Authors: Norbert Vella (Partner at PwC and Sustainability Leader) and Michael Dingli (Sustainability Manager)