EU Parliament votes to approve the Commission's "stop-the-clock" proposal for the CSRD and CSDDD

Once formally approved and published in the Official Journal, Member States will have until December 2025 to change national laws to give this effect. The Minister for Enterprise, Tourism and Employment, Peter Burke issued a press release on Monday, 31 March 2025 , stating that “focussed on quickly implementing the EU’s ‘Stop the Clock’ proposal together with the changes proposed by the wider Omnibus, once these are adopted at EU level”.

CSRD: New deadlines 
The obligation on large EU companies to prepare reports on financial years starting in 2025 will be delayed by two years, with the first reports required in 2028 on FY2027. 

The obligation on listed small and medium-sized enterprises has been delayed by one year so that reporting will commence in 2029 on FY2028.

However, the obligation for Public Interest Entities to report this year on FY2024 will not change. 

CSDDD: New deadlines
The transposition deadline and the application of the CSDDD to the largest companies will be delayed by one year:  

•    The transposition deadline for the CSDDD has been moved from July 2026 to July 2027.  
•    The obligations on the largest companies (i.e. EU-headed groups with over 5,000 employees and €1.5 billion net turnover worldwide, or non-EU-headed groups with over €1.5 billion turnover in the EU) are delayed for one year, meaning:

• Substantive obligations will apply from July 2028 instead of July 2027; and
• Reporting will begin to apply for FY2029 instead of FY2028.  

•    "Large companies", i.e. EU groups with over 3,000 employees and €900 million net turnover worldwide, or non-EU-headed groups with over €900 million turnover in the EU, will still be subject to the same obligations – starting in July 2028 with a view to reporting in FY2029.  
•    EU companies with over 1,000 employees and €450 million net turnover worldwide, or non-EU-headed groups with over €450 million turnover in the EU will also be subject to the same obligations – starting in July 2029, with reporting will be delayed by one year from FY2029 to FY2030.
 

Separate negotiations on contents 
The requirements for scope in their current form will be negotiated pursuant to a separate proposal on the substantive contents of the directives. 

Background to the Omnibus Package 
On 26 February, the European Commission announced its long-awaited Omnibus Simplification Package. The new proposal aimed to simplify the EU's corporate sustainability reporting and due diligence rules, significantly amending the CSRD, CSDDD and Carbon Border Adjustment Mechanism ("CBAM") with the following proposed key changes. 

CSRD 

•    New scope: Around 80% of companies will be taken out of the scope of the CSRD with thresholds for compliance proposed to be raised to capture companies with 1,000 employees and either a turnover of above €50 million or a balance sheet total above €25 million. The threshold for non-EU parent companies has also been raised to those that have both an EU net group turnover in the EU of over €450 million and have at least one large EU subsidiary. 
•    Higher scope for EU Taxonomy reporting: Only in scope EU companies or groups with a net turnover of €450 million will be required to disclose taxonomy information. Companies below this threshold will only have to make disclosures on specific data points related to certain claims made about the sustainability of their activities.
•    Postponement: 2-year delay on reporting requirements for large companies that have yet to start reporting under the CSRD and for listed SME's (Wave II and III). 
•    ESRS changes and sector specific standards: The Commission proposes to amend the European Sustainability Reporting Standards (ESRS) developed by EFRAG with the aim of substantially reducing the number of data points, clarifying provisions that have been deemed to be unclear and improving consistency with other pieces of legislation. This is a commitment by the Commission announced alongside the Omnibus and does not form part of the formal proposal. However, sector-specific standards which were due to be adopted in June 2026 will also be removed as part of the proposal.
•    Assurance requirements: The Commission will no longer be required to adopt reasonable assurance requirements as currently envisaged after 1 October 2028.
•    Voluntary standards and value chain reporting: Companies will no longer be required to report on information of those companies in their value chain that are not covered under the scope of the CSRD. Further, in reporting on the activities of these companies they will not be able to seek information beyond what is specified in new "voluntary" standards to be developed by EFRAG. These will be based on the VSME standards (Voluntary Sustainable Reporting Standard for non-listed SMEs).

CSDDD

Unlike the CSRD, the CSDDD has not yet been implemented into the national law of EU Member States and was due to start applying for the first wave of companies from 2027.
•    Postponement: Date for compliance delayed by one year until 26 July 2028. 
•    Monitoring of due diligence processes: The frequency of assessments by companies of their internal due diligence processes will be reduced from every year to "at least every five years".
•    Civil liability regimes and penalties for non-compliance: Penalties for non-compliance disconnected from the global turnover of companies deferring instead to national law on liability. 
•    Removal of due diligence on indirect suppliers: Companies will no longer be required to map the adverse impacts of indirect suppliers in their supply chain. Due diligence obligations would be limited to a company’s own operations, those of their subsidiaries, and direct business partners only.
•    Ending contracts: The obligation to terminate contracts with non-compliant suppliers will be removed. 

CBAM

•    New cumulative annual threshold of 50 metric tons of mass goods per importer per year, thereby excluding close to 90% of companies currently in scope, providing for a de minimis exemption for smaller importers.

Conclusion
It is important to note that, in so far as scope or substance is concerned, these are legislative proposals only and are subject to a lengthy legislative process. The vote on 3 April only dealt with timelines for application. Therefore, where relevant, any existing national transposing legislation in these areas continue to apply for the time being. 
 

Written by: Jonathan Moore and Adam Winston