EU Postpones Sustainability Compliance Deadlines: Implications for Businesses

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On 14 April 2025, the Council of the European Union officially adopted the “Stop-the-Clock” Directive, delaying the application dates of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). 

Key Changes:

CSRD Reporting Delay: The directive postpones CSRD reporting requirements by two years for companies in “wave 2” (due to report in 2026 for financial years starting on or after January 1, 2025) and “wave 3” (due to report in 2027 for financial years starting on or after January 1, 2026). These companies now have until 2028 and 2029, respectively, to comply. Reporting for “wave 1” companies and non-EU companies (due in 2029) remains unchanged. 
CSDDD Implementation Delay: The transposition deadline and application of due diligence obligations have been postponed by one year, providing businesses with more time to align their operations with the new requirements. 

Omnibus I Simplifications:

The Omnibus I initiative introduces several measures to reduce the regulatory burden:

Scope Reduction: The number of companies required to report under the CSRD will decrease by approximately 80%, focusing on firms with more than 1,000 employees. 
Due Diligence Adjustments: The CSDDD will now primarily apply to direct suppliers, and the frequency of assessments has been extended, easing compliance for businesses. 

These developments aim to balance the EU’s sustainability goals with the need to enhance the competitiveness of European businesses.

Next Steps:

Companies should use this additional time to strengthen their sustainability strategies and ensure readiness for the revised compliance timelines. Staying informed about further regulatory updates will be crucial in navigating the evolving landscape of EU sustainability requirements.