CSRD and CS3D “Stop the Clock” Directive Published in Official Journal
On 16 April, the “Stop the Clock” Directive, agreed as part of the “Omnibus” package negotiations, was published in the Official Journal of the EU. The Directive entered into force on the 17 April and now must be transposed by member states by 31 December 2025.
The Stop the Clock Directive:
- postpones the application of sustainability reporting requirements under the Corporate Sustainability Reporting Directive (“CSRD”) for two years for in-scope companies that have not already started reporting;
- delays the transposition deadline for the Corporate Sustainability Due Diligence Directive (“CS3D”) to 26 July 2027; and
- pushes back the initial application of CS3D by a year to 26 July 2028.
Whilst the Stop the Clock Directive provides additional time for compliance for firms originally in-scope of CSRD and CS3D, a high degree of uncertainty remains, as the substantive Omnibus proposal, as detailed in our earlier article, requires further negotiation. The Council has urged that this should be treated as a matter of priority, with a view to finalising them as soon as possible in 2025. Nevertheless, it is expected that negotiations on the substantive proposal could be protracted.
In-scope businesses should keep abreast of developments to be in the best position to adapt to the changing requirements. For further information please contact the authors or your usual CMS contact.
