On April 3, 2025, the European Parliament delivered a significant decision regarding sustainability reporting and due diligence requirements, voting in favor of the “stop-the-clock” proposal without amendments. This approval signifies a delay in the application of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), aimed at providing businesses with more time to adapt.

The approved proposal introduces a two-year delay for the application of CSRD for wave 2 and 3 companies. Additionally, the implementation of CSDDD is postponed by one year. This decision follows the European Council’s endorsement of the proposal on March 26, 2025, setting the stage for its formal adoption.

The move is intended to enhance EU competitiveness and provide legal certainty to businesses navigating the complexities of theses new directives. “Simplification is one of the priorities of the Polish presidency,” said Adam Szłapka, Minister for the European Union of Poland. “Today’s agreement is a first step on our decisive path to cut red tape and make the EU more competitive.”

The next crucial step involves the formal approval by the European Council. Following this, the amending Directive will be published in the Official Journal of the European Union and will enter into force the day after publication. Member States will then have until December 31, 2025, to transpose the directive into their national laws.

While the “stop-the-clock” proposal addresses the timeline, the substantive details of the directives will require further negotiation (see on GRIP An in-depth look at the leaked Draft Directive on corporate sustainability). The European Council has emphasized the need for these negotiations to be treated as priority, aiming for a swift resolution in 2025. This focus on rapid finalization is crucial for providing clarity and certainty to businesses and the investment community.