The ‘Stop-the-Clock’ directive is part of the Omnibus I package proposed by the European Council in February. The Parliament’s approval means that the European Parliament, Council, and Commission are aligned on the proposed delays.
The delays give member states extra time—until July 2027—to transpose the EU CSDDD into national laws. Companies also get more time, until 2028, to fully implement the due diligence expectations. Additionally, deadlines for CSRD reporting have shifted: the second group of companies now need to report in 2028, and the third group in 2029.
These new timelines are designed to give regulators sufficient time to discuss and finalise the proposed changes to the sustainability regulations – with discussions starting immediately in the Parliament’s Legal Affairs Committee.
However, the extra time does not mean companies should slow down their preparations, as companies will still need to comply. Many businesses are continuing their work on sustainability due diligence, and delaying action would mean lagging behind.
Key takeaways:
Background on the Stop-the-Clock proposal. The ‘Stop-the-Clock’ directive, which is part of the Omnibus I package that the European Commission presented on 26 February 2025, proposes to postpone the application dates of certain requirements in the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) for companies in scope, as well as the transposition deadline for the CSDDD. When it comes to the CSRD, the Stop-the-Clock directive also proposed to delay the application of reporting requirements by two years for the second and third waves of companies within its remit. The delays aims to give the co-legislators time to discuss and vote on the proposed substantial changes in the Omnibus I package.
The parliament’s decision. On 3 April, the Stop-the-Clock directive was approved by the European Parliament, with wide support: 531 votes in favour, 69 against and 17 abstentions. The group of MEPs that supported the Stop-the-Clock proposal included representatives from the centre left, which shows that, at least on this point, there is a broad alliance. It is also worth noting that, to be able to vote on Thursday, the European Parliament had to first vote to approve the use of the urgent legislative procedure on 1 April. This decision passed with 427 votes for, 221 against and 14 abstentions. This represents an exceptional use of the urgent procedure which has previously been used for matters of war or emergencies, like Covid-19.
What this means for companies and the CSDDD. The approval of the proposal means that EU member states will have an extra year – until 26 July 2027 – to transpose the EU CSDDD into national legislation. For companies, it means that the date of application of the due diligence requirements applicable to EU companies with over 5,000 employees and net turnover higher than €1.5 billion as well as non-EU companies with a turnover above this threshold in the EU, will now be 2028. This will be the same date of application for the second wave of companies, that is, those in the EU with over 3,000 employees and net turnover higher than €900 million, and non-EU companies with turnover above that threshold in the EU. The application of the CSRD reporting requirements will also be delayed by two years when it comes to the second and third waves of companies covered by the legislation (as the first are already expected to report on it). This means the second wave of companies will be required to report for the first time in 2028, while listed small and medium-sized enterprises will have to report in 2029.
Next steps. Since Member States’ representatives to the European Council (Coreper) had already announced their endorsement of the Commission’s ‘Stop the Clock’ proposal, the directive now only needs formal approval by the Council to enter into force. Once the proposal is formally approved by the Council, the Stop-the-Clock directive will have immediate consequences for large companies preparing to report under the CSRD and implement the CSDDD, as well as those states preparing to transpose the CSDDD. Since the Stop-the-Clock directive now provides co-legislators time to discuss the substantial changes proposed in the Omnibus I package, the European Parliament has shared that work on that second directive will now start in Parliament’s Legal Affairs Committee.
