• Corporate Sustainability Reporting Directive (CSRD) application delayed by two years for large companies and listed SMEs.
• Corporate Sustainability Due Diligence Directive (CSDDD) transposition and application delayed by one year.
• Enhanced legal certainty and reduced regulatory burdens expected to boost EU competitiveness.

EU member states have approved the Council’s position on the “Stop-the-clock” mechanism aimed at simplifying EU sustainability regulations and enhancing business competitiveness.

“Simplification is one of the priorities of the Polish presidency. Today’s agreement is a first step on our decisive path to cut red tape and make the EU more competitive.”

— Adam Szłapka, Minister for the European Union of Poland

Under the proposal:

• The application date for Corporate Sustainability Reporting Directive (CSRD) requirements is postponed by two years for large companies yet to commence reporting, as well as listed SMEs.
• The transposition deadline and initial phase of the Corporate Sustainability Due Diligence Directive (CSDDD), affecting the largest companies, is delayed by one year.

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The initiative is part of the EU’s broader “Omnibus I” legislative package, which aims to simplify sustainability laws and clarify reporting obligations for businesses.

EU member states have broadly supported the urgency expressed by the Polish presidency, viewing the measure as essential to provide businesses with clear and manageable compliance timelines.

Swift agreement between EU institutions on the directive could allow further substantial revisions to CSRD and CSDDD regulations.

Next Steps:

• Following today’s agreement, the Polish presidency will start negotiations with the European Parliament to finalize a provisional agreement.
• The European Parliament will vote on an urgent procedure request regarding this proposal on April 1.

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