European Parliament lawmakers announced today that they have unanimously adopted stop-the-clock instruction proposed by the European Commission, thereby Postpone the implementation of some important regulations relating to sustainability reporting and assessment, including CSRD (Directive on corporate sustainability reporting) and CSDDD (Directive on appraisal of sustainable development of enterprises).
This agreement is The majority of MEPs supported the measure by 531 votes in favour – 69 votes against., although a series of amendments have been submitted by far-left and far-right parties – including proposals to reject the directive altogether or extend the suspension period to up to 15 years.
The statement was made after the “stop-the-clock” directive was representatives of EU member states at the European Council adopted last week, marking an important step in Omnibus I Reform Package of the Commission, with the aim of Significantly reduce the burden of sustainability reporting and legal compliance for businesses, especially small and medium enterprises (SMEs).
The Omnibus Package, published in February 2, proposes a series of changes to regulations including:
CSRD Directive,
CSDDD Directive,
EU Taxonomy Regulation,
Carbon Border Adjustment Mechanism (CBAM).
Among the proposals in this package are:
Postpone CSRD application for another 2 years for businesses that have not started reporting,
One more year extension for the process of internalizing and implementing the CSDDD.
Together with the Omnibus package, the Commission proposed stop-the-clock directive to expedite the deferral of requests from CSRD and CSDDD, in order to provide regulatory certainty for businesses in the current period.
The proposed changes in the Omnibus package aim to dramatically reduce reporting and compliance burdens for businesses, including:
Reduce the number of data metrics to report,
Narrowing the Scope of ESG Due Diligence, focus on direct business partners,
Reduce the scale of CSRD application, with estimates 80% of businesses could be exempted from reporting obligations according to this regulation.
The European Commission says it is planning speed up the process of updating regulations. Recently, they have been assigned to EFRAG (European Financial Reporting Advisory Group) development tasks Technical guidance for the ESRS standards suite (European sustainability reporting standards) according to CSRD, with term only 7 monthsThe aim is for businesses to be able to apply the new standard for the fiscal year. 2027, and Early adoption option from 2026 if you want
With the agreements approved, The European Parliament and the Council will move to formally approve the suspension of the regulation in the coming weeks., while continuing to develop a position on proposed changes to the law.