CSRD ‘Stop-the-Clock’ Directive is transposed into Irish law

The enactment by the Minister for Enterprise, Tourism and Employment completes the legislative cycle begun by the European Commission on 26 February 2025. This also completes a full year cycle of the CSRD in Ireland, first transposed on 5 July 2024, also under statutory instrument (SI 336 of 2024) but containing anomalies in regards to the EU Directive itself. This latest update brings much needed clarity to companies in scope of the regulations.

The key changes contained in the CSRD are:

1. Extension provided for waves 2 & 3 reporting deadlines

Companies falling in scope for CSRD as part of the waves 2 and 3 now have extra time before they need to start reporting sustainability information in line with the CSRD requirements:

• Wave 2: Large Irish companies are required to report for financial years beginning on or after1 January 2027 (so their first report will come out in 2028).
• Wave 3: SMEs with securities listed on an EU regulated market, small and non-complex institutions, captive insurance and reinsurance undertakings must start reporting for periods beginning on or after1 January 2028 (so their first report will come out in 2029).

2. A clearer definition of turnover

The rules now define “net turnover” more precisely fpr the purposes of determining which entities are in scope and whether they are considered large or SME companies. The changes align the definition more closely with the EU Accounting Directive and remove the reference to revenue from “the making or holding of investments” for entities with such primary activities.

Before, the Irish definition was broader, and was unclear on how turnover should be assessed, especially in the context of these entities holding investments. This is particularly relevant to the asset management and capital markets sectors.

3. Treatment for ineligible entities (scope clarified)

Before, the ineligible entities under Schedule 5 of the Companies Act 2014 were automatically considered “large companies” and therefore expected to report as wave 2 companies, even if they were not actually meeting the size criteria. These companies will now only be included if they meet the standard size tests (in terms of revenue, assets and employee numbers, noting that these thresholds are currently under review at EU level and expected to be amended in a near future).

This change means that many Schedule 5 Irish entities won’t have to report unless they are large enough. This is particularly relevant, amongst others, to Undertakings for Collective Investment in Transferable Securities, entities regulated by the Central Bank of Ireland and Unit Trusts.

4. Subsidiaries can use the parent company’s report

A company that is part of a larger EU group can avail of the subsidiary exemption under newly transposed rules and may not have to prepare its own sustainability report – if its parent company already includes it in a group-level EU sustainability report prepared in line with CSRD requirements.

What’s coming next?

Sustainability reporting requirements continue to develop at the EU level. Here’s what’s on the horizon:

• The European Sustainability Reporting Standards (ESRS) quick fix: the European Commission has adopted a ‘quick fix’ for companies already presenting sustainability information in accordance with the CSRD by was of a delegated act published on 11^th July 2025. Targeted changes to the existing ESRS are proposed and would further delay some of the phased-in disclosure requirements for wave 1 companies, allowing them to continue to omit certain disclosures.
  The delegated act is currently going through a scrutiny period before it can be published in the Official Journal of the EU (expected in quarter 3 of 2025).
• The European Financial Reporting Advisory Group (EFRAG) revision of the sector-agnostic standards: EFRAG’s Sustainability Reporting Board (SRB) has approved its work plan for the revision of the sector-agnostic ESRS. The first step in the workplan includes EFRAG setting out its initial vision for potential areas for reporting simplification, followed by consideration of stakeholder feedback. It is expected that an exposure draft will be released subsequently.
• Ongoing discussions related to the Content Directive: in addition to the Stop-the-Clock Directive, EU lawmakers are discussing a plan to simplify reporting rules and reduce the number of companies affected which will form part of what is referred to as the Content Directive, the second directive part of the Omnibus package. These changes are still being negotiated and will take time to come into force.

The details of the instrument can be found here: S.I. No. 309/2025 - European Union (Corporate Sustainability Reporting) Regulations 2025

Please contact our CSRD experts, Laura Angelin and Johnny Meehan, to learn more about the evolution of the regulations and how they impact your organisation.