‘Stop the Clock’ proposal of Omnibus 1: Approval at the level of the EU Member States

On 26 March 2025, the Committee of Permanent Representatives (COREPER), a sub-body of the Council of the European Union that prepares decisions, approved a text on the so-called ‘Stop the Clock’ proposal. The next step will be for the European Parliament to vote on its position on the proposals on 1 April 2025. Both EU institutions will then negotiate the proposals and vote on the outcome of the negotiations. The Council is in favour of the final vote being taken by June 2025 at the latest.

Background:

On 26 February 2025, the European Commission issued the first set of proposals for reducing the administrative burden on companies. The main focus of these proposals is the so-called ‘Omnibus 1’, which includes two amending directives. The amending directive COM(2025) 81 final (amending directive 81) primarily addresses substantive amendments to the Accounting Directive (Directive 2013/34/EU), the Corporate Sustainability Reporting Directive (CSRD, Directive (EU) 2022/2464) and the Corporate Sustainability Due Diligence Directive (CSDDD, Directive (EU) 2024/1760) as well as the Audit Directive (Directive 2006/43/EC). Separately from this, proposals were made to postpone the effective date of the CSRD and the CSDDD in the amending directive COM(2025) 80 final (amending directive 80, also referred to as the ‘stop-the-clock’ proposal).

The proposed amending directive 80 exclusively addresses a two-year postponement of the initial application dates for sustainability reporting for those companies that are required to report on sustainability under EU law that is currently still in force for financial years beginning after 1 January 2025 or 1 January 2026 (i.e. companies in the second and third wave). To avoid a situation in which companies are required to report on sustainability for the first time under current EU law and are then subsequently excluded from the scope of application (amending directive 81) by a subsequent amendment to EU law, the European Commission has explicitly called on the Council and the European Parliament to reach an agreement on the proposals of the amending directive 80 (‘stop-the-clock’ proposal) as quickly as possible. In order to ensure that the second and third wave are also subject to a postponement in the EU Member States, Article 3 of the amending directive 80 requires the EU Member States to transpose the directive by 31 December 2025 at the latest.