The European Stop-the-Clock Directive entered into force on 17 April 2025. This directive is part of a broader Omnibus package aimed at amending European sustainability legislation, including the CSRD and CSDDD, to ensure that regulatory requirements do not hinder the EU's competitiveness. See our February 2025 article for more on the Omnibus package.

The publication of the Stop-the-Clock Directive took place on 16 April 2025, after a formal vote by the European Council on 14 April 2025 and a positive vote by the European Parliament on 3 April 2025. Both parties adopted the European Commission’s original proposal.

What will change?

The Stop-the-Clock Directive includes amendments that postpone the application of certain reporting requirements under the CSRD, as well as the transposition deadline and application of the CSDDD.

CSRD amendments

The Stop-the-Clock Directive postpones by two years the start date of current CSRD requirements for the "second wave" of companies (large companies and the parent companies of large groups that did not fall under the scope of the first wave of reporting as of financial year 2024), from financial year 2025 to financial year 2027. Similarly, the start date for the "third wave" (listed SMEs, small and non-complex credit institutions, and captive insurance and reinsurance companies) is postponed from financial year 2026 to financial year 2028.

This flowchart shows the delays. These postponements aim to avoid situations where companies are required to report for the 2025 (second wave) or 2026 (third wave) financial year, only to be relieved of this obligation once the Omnibus Proposal enters into force.

Some "first wave" companies currently in scope for financial year 2024, but not for the CSRD under the Omnibus Proposal ("first wave" companies with 501 to 1000 employees) cannot make use of this Stop-the-Clock. In the lead-up to the Stop-the-Clock Directive, the Dutch government unsuccessfully pushed to postpone the CSRD for "first wave" companies as well. Note that the CSRD should already have taken effect for Dutch "first wave" companies as of financial year 2024, so such a "postponement" would only have qualified as such because the Netherlands failed to timely implement the CSRD.

CSDDD amendments

The Stop-the-Clock Directive delays the implementation deadline of the CSDDD for member states by one year, from 26 July 2026 to 26 July 2027. It also postpones the application of the CSDDD requirements for the largest companies in scope ("CSDDD first wave") by one year, from 26 July 2027 to 26 July 2028, the same date as already applied to "CSDDD second wave" companies. This flowchart shows the delay in the application of the CSDDD.

These Stop-the-Clock amendments are separate from the substantive changes proposed by the Omnibus Proposal, which is currently under review by both the European Parliament and the European Council. The European Parliament is expected to adopt its negotiating position on this Omnibus Proposal in Q4 2025, while the Council aims to conclude its negotiations as soon as it can in 2025. As a result, trilogue negotiations between the European Commission, the Council, and the European Parliament are expected to begin as early as 2026.

Next steps

Member states will be required to transpose the directive into national law by 31 December 2025. The Dutch government prefers to incorporate the Omnibus developments into the ongoing CSRD implementation process. This means that the necessary Stop-the-Clock amendments are expected to be included in the current Dutch CSRD implementation drafts. The government will, during the negotiations on the Omnibus Proposal, determine when to actively resume the CSDDD implementation process.