EU “Stop-the-clock” directive enters into force under Omnibus I

What's New

On 16 April 2025, the "Stop-the-clock" directive (the Directive) was published in the Official Journal of the European Union (the OJ) and entered into force the following day.

We recently reported that the Council of the EU had reached its negotiation position on the Directive.

The agreed text was formally approved by the European Parliament on 03 April and adopted by the Council on 14 April 2025.

This means that the implementation timelines under the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) have changed as follows:

CSRD

• Wave 2 (large EU companies): will now report in 2028 in respect of the 2027 financial year (i.e. a 2 year delay).

• Wave 3 (SMEs): will now report in 2029 in respect of the 2028 financial year (i.e. a 2 year delay).

• No change for Wave 1 (NFRD companies) and Wave 4 (non-EU companies) due to report in 2025 and 2029 respectively.

CSDDD

• Deadline for transposition postponed by a year until 26 July 2027.

• Wave 1 (companies with more than 5,000 employees and €1.5 billion in turnover): will have to comply from 26 July 2028 (i.e. a 1 year delay).

• No change for wave 2 (companies with more than 3,000 employees and €900 million in turnover) and wave 3 (companies more than 1,000 employee and €450 million in turnover), required to comply from 26 July 2028 and 26 July 2029 respectively.

Next Steps

Member states are required to transpose the Directive into their national legislation by 31 December 2025.

With the Directive now published in the OJ, the focus moves to the other Directive proposed in the first Omnibus Package, which sets out more substantive changes to the reporting and due diligence obligations under the CSRD and CSDDD.