The directive postpones key obligations under the CSRD and CSDDD to enhance legal certainty and competitiveness for EU businesses.
Τhe Council of the European Union gave its final approval to the Stop-the-clock directive, a legislative measure aimed at simplifying EU sustainability rules. This directive postpones the application dates of certain corporate sustainability reporting and due diligence requirements, providing businesses with additional time to comply.
Key Provisions of the Stop-the-clock Directive
The Stop-the-clock directive includes the following postponements:
- Corporate Sustainability Reporting Directive (CSRD): The entry into application is delayed by two years for large companies that have not yet started reporting, as well as for listed small and medium-sized enterprises (SMEs).
- Corporate Sustainability Due Diligence Directive (CSDDD): The transposition deadline and the first phase of application, covering the largest companies, are postponed by one year.
These changes are part of the Commission’s ‘Omnibus I’ package, introduced in February 2025, which aims to simplify EU legislation in the field of sustainability.
Legislative Context and Next Steps
The directive will enter into force the day following its publication in the EU’s Official Journal. Member states are required to transpose the directive into their national legislation by 31 December 2025.
This measure responds to calls from EU leaders, including the European Council’s October 2024 conclusions and the Budapest Declaration of November 2024, which emphasized the need to reduce administrative burdens and enhance competitiveness, particularly for SMEs.
Background on the Stop-the-clock Initiative
The Stop-the-clock directive is a response to the challenges identified in reports by Enrico Letta (Much more than a market) and Mario Draghi (The future of European competitiveness), which highlighted the need for a clear, simple, and smart regulatory framework for businesses. The directive aims to provide legal certainty to companies regarding their reporting and due diligence obligations.
The Stop-the-clock directive, postpones the application dates of certain sustainability reporting and due diligence requirements under the CSRD and CSDDD. This measure is intended to provide legal certainty to businesses and enhance EU competitiveness by allowing additional time for compliance. Member states must transpose the directive into national law by 31 December 2025.
🔗 Access the full press release here: Council of the EU Press Release
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