“Stop-the-clock” proposal: EU Parliament approves postponement of sustainability reporting and due diligence rules

published on 3 April 2025 | reading time approx. 2 minutes

On April 3, 2025, the European Parliament approved the postponement of EU regulations on sustainability reporting and corporate due diligence. The aim of the postponement is to give companies in the user group of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) more time to prepare and to strengthen the EU's competitiveness. The postponement is part of the “Omnibus I” package presented by the European Commission on February 26, 2025.

What will change for companies in the user group of the CSRD?

Companies in so-called “wave 2” and “wave 3” will each receive a two-year delay until a CSRD-compliant sustainability report must be submitted for the first time. For the current user group, the postponement means the following:

Companies subject to the NFRD: The CSRD reporting obligation remains in place (depending on the status of national implementation), as these companies form “wave 1” and are not covered by the “stop-the-clock” proposal. As the CSRD has not yet been transposed into national law in Germany, the NFRD applies in this country until further notice.
All other large companies: The CSRD reporting obligation will be postponed by two years and will now begin in the 2027 financial year instead of the 2025 financial year as previously planned.
Listed SMEs: The CSRD reporting obligation will be postponed by two years and will now begin in the 2028 financial year instead of the 2026 financial year as previously planned.

The increase in the thresholds above which a company is obliged to prepare a CSRD report planned by the EU as part of the first omnibus package is being negotiated independently of the “stop-the-clock” proposal and is likely to result in a restriction of the group of users. According to the current proposal, the reporting obligation would no longer apply to companies with fewer than 1,000 employees. This proposal to change the content and scope of sustainability reporting and due diligence obligations is currently being discussed by the EU Parliament's Legal Affairs Committee. It is not yet clear when a decision will be made on this.

What will change for companies in the user group of the CSDDD?

Large companies with more than 5,000 employees and a turnover of more than €1.5 billion will now only have to implement the new regulations on due diligence obligations from 2028 instead of 2027 as originally planned. Member states have been given until July 26, 2027 to transpose the directive into national law.

What will happen next?

In order to enter into force, the draft law still needs to be approved by the EU Council. Having already approved the draft on March 26, 2025, this step is considered a mere formality. The law must then be transposed into national law, for which a deadline of December 31, 2025 has been set.