Previously I wrote about the proposed freeze on CSRD wave 2 and CSDDD reporting under the Omnibus “Stop the Clock” proposal. Last week, the EU Council and Parliament came to an agreement, choosing to freeze compliance while further changes to the laws are negotiated. Linklaters gives details on the delays in a recent memo:
“The ‘Stop-the-Clock’ Directive forms part of the Omnibus I proposal adopted by the Commission on 26 February 2025 to simplify EU sustainability legislation. It envisages the postponement of:
- the entry into application of the Corporate Sustainability Reporting Directive (CSRD) requirements for large companies that have not yet started reporting, as well as listed SMEs by two years; and
- the transposition deadline and the first phase of the application (covering the largest companies) of the Corporate Sustainability Due Diligence Directive (CSDDD) by one year.”
While the Stop-the-Clock Directive passed overwhelmingly, that doesn’t mean that all of the changes in the Omnibus package will pass so easily. There is broad agreement that if the CSRD and CSDDD are scaled down, companies shouldn’t be expected to comply with the more stringent version of the law – only to have compliance obligations change months later. Just what those changes look like is still an open question that will be hotly debated. The lawmaking process for Omnibus revisions will likely last until at least 4Q25. In the meantime, if your company was granted a delay under “Stop-the-Clock”, it isn’t prudent to pause work on compliance. It may be appropriate to set a more comfortable pace. If you lose your momentum now, it may be difficult to pick back up later where you left off.
Our members can learn more about EU disclosure frameworks here.
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