Simplification: Council gives final green light on the ‘Stop-the-clock’ mechanism to boost EU competitiveness and provide legal certainty to businesses

Temps de lecture: 3 min |April 15, 2025 à 7:00 AM

The Council gave its final green light today on one of the Commission’s proposals to simplify EU rules and thus boost EU competitiveness. This proposal (the so-called ‘Stop-the-clock’ directive) postpones the dates of application of certain corporate sustainability reporting and due diligence requirements, as well as the transposition deadline of the due diligence provisions.

Adam Szłapka, Minister for the European Union of Poland"
Today we delivered on our promise regarding simplification of EU laws. The fast adoption of this directive is an important first step towards cutting red tape, providing legal certainty to our companies and making the EU more competitive.

The proposal forms part of the ‘Omnibus I’ package adopted by the Commission at the end of February 2025 to simplify EU legislation in the field of sustainability. In view of significant implications for the business community, the Council and the European Parliament have treated this proposal with utmost priority aiming to provide EU companies with the necessary legal certainty as regards their reporting and due diligence obligations. The EU’s co-legislators therefore supported the Commission’s proposal to postpone:

by two years the entry into application of the Corporate Sustainability Reporting Directive (CSRD) requirements for large companies that have not yet started reporting, as well as listed SMEs, and
by one year the transposition deadline and the first phase of the application (covering the largest companies) of the Corporate Sustainability Due Diligence Directive (CSDDD).

This swift agreement will provide the co-legislators with time to agree on substantive changes to the CSRD and CSDDD, also proposed by the Commission as part of the ‘Omnibus I’ package on sustainability.

Next steps

Following today’s adoption, the legislative act will be published in the EU’s Official Journal and enter into force on the day following that of this publication. Member states must transpose this directive into their national legislation by 31 December 2025.

Background

In October 2024, the European Council called on all EU institutions, member states and stakeholders, as a matter of priority, to take work forward, notably in response to the challenges identified in the reports by Enrico Letta (‘Much more than a market’) and Mario Draghi (‘The future of European competitiveness’). The Budapest declaration of 8 November 2024 subsequently called for ‘launching a simplification revolution’, by ensuring a clear, simple and smart regulatory framework for businesses and drastically reducing administrative, regulatory and reporting burdens, in particular for SMEs.

On 26 February 2025, as a follow-up to EU leaders’ call, the Commission put forward two ‘Omnibus’ packages, aiming to simplify existing legislation in the fields of sustainability and investment, respectively. On 20 March 2025, leaders urged the co-legislators to take work forward on these Omnibus simplification packages as a matter of priority and with a high level of ambition, with a view to finalising them as soon as possible in 2025. On this occasion, the European Council specifically called on co-legislators to adopt the ‘Stop-the-clock’ mechanism without delay and at the latest by June 2025.