Council reaches negotiating position on “Stop-the-clock” directive

Update

On 03 April 2025, the European Parliament voted in favour of the Commission’s proposed text. The amending Directive will now be formally approved by the Council.

Member States will have until 31 December 2025 to transpose its provisions into their national law.

What's New

On 26 March 2025, the Council of the EU (the Council) reached its negotiation position on the proposed "Stop-the-clock" directive (the Directive). The Directive forms part of the Commission's Omnibus I package intended to simplify EU sustainability-related legislation.

For more information on the omnibus proposal, see our client note here.

The Directive delays both the implementation dates of certain corporate sustainability reporting and due diligence (DD) requirements as well as the deadline for Member States to transpose the DD provisions.

Specifically, the Council supported the Commission's proposal to implement:

• A two-year postponement to 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; and

• A one-year postponement to the transposition deadline for the Corporate Sustainability Due Diligence Directive (CSDDD) until 26 July 2027, and to the deadline for the first wave of its application (covering the largest companies) until 26 July 2028.

Next Steps

The European Parliament (EP) is expected to hold a final vote on the Directive on 03 April 2025, with members of the EP having until 1pm on 02 April 2025 to put forward amendments.

Once it has agreed its negotiating position, trialogue discussions can begin as part of the EU's ordinary legislative procedure.