The European Parliament is poised to approve a major delay in the EU’s sustainability reporting mandates on April 3, following the Council of the EU’s endorsement on March 26. The proposed “stop-the-clock” directive—part of the European Commission’s Omnibus Simplification Package—will postpone the application of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) until 2028. This move is part of broader efforts to ease compliance burdens on businesses and recalibrate Europe’s approach to ESG regulation and its carbon neutral strategy. 

The reforms come after mounting pressure from business groups and a rightward political shift in the 2024 European Parliament elections. The initial wave of sustainability legislation—rooted in the European Green Deal—had introduced far-reaching obligations for companies to report on greenhouse gas emissions, ESG actions, and supply chain due diligence. However, concerns about the financial strain on companies triggered a reevaluation of these policies. 

The proposal includes two key components: a delay of CSRD and CSDDD implementation to fiscal year 2027, and a narrowing of CSRD’s scope to only cover companies with over 1,000 employees and €450 million in turnover. The enforcement scope of the CSDDD would also be reduced, limiting who can bring civil claims and capping financial penalties. 

With the Council’s approval already secured, the European Parliament is now set to fast-track the vote through its Legal Affairs Committee using Rule 170. If passed on April 3, the directive will move swiftly into the final “trialogue” negotiations with the Commission and Council. 

While climate advocates warn of backsliding on ESG progress, businesses welcome the delay as a chance to align sustainability commitments with economic reality. EU member states will have until the end of 2025 to implement the directive into national law. 

Sources: 

https://www.forbes.com/sites/jonmcgowan/2025/03/28/eu-parliament-likely-to-approve-sustainability-reporting-delay-on-april-3/ 

https://natlawreview.com/article/european-council-greenlights-first-step-omnibus-stop-clock-proposal#google_vignette