EU Approves Delay of Sustainability Reporting Rules Until 2025

The European Council has approved the 'Stop-the-clock' proposal, delaying the implementation of key sustainability reporting and due diligence requirements outlined in the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Member States now have until the end of 2025 to transpose these directives into national legislation, with affected businesses facing a new compliance timeline that extends to at least 2028. This decision is part of the broader Omnibus package aimed at simplifying European sustainability legislation. Supporters argue that this delay will allow smaller companies to focus on innovation and develop sustainability initiatives at their own pace. However, critics warn that reduced reporting requirements could create a 'value chain gap' that limits the availability of information on environmental, social, and governance (ESG) issues. The European Commission is also working on simplifying the substantive reporting obligations under the CSRD, with technical advice expected from the EFRAG Sustainability Reporting Board soon.