Publication in the OJEU of the ‘Stop the clock’ Directive

As a reminder, the ‘Stop the clock’ Directive is part of the so-called ‘Omnibus I’ package of proposals presented by the European Commission on 26 February 2025, aimed at significantly reducing the reporting burden on companies. In line with the European Commission’s desire to move forward quickly on this text, the co-legislators have reached rapid agreement.  

In practice, this Directive results in a two-year delay in the entry into force for (i) ‘wave 2’ companies, i.e. large undertakings that are not public-interest entities with more than 500 employees, and (ii) ‘wave 3’ companies, i.e. listed SMEs, small and non-complex credit institutions, and captive insurance and reinsurance companies.  

Wave 2 entities are therefore now required to prepare their first sustainability statements under the ESRS (European Sustainability Reporting Standards) for financial years starting from 1 January 2027 (1 January 2028 for Wave 3). This timetable does not, however, take account of changes to the scope of the CSRD that are currently under discussion as part of the draft ‘Content’ Directive (see the Note in this issue) and which may result in some wave 2 companies and wave 3 companies never having to apply the CSRD in practice. The implementation schedule of the CSRD remains unchanged for companies in ‘wave 1’ (i.e., large public-interest entities with more than 500 employees).  

The CSDDD is also affected by the ‘Stop the Clock’ Directive, with a one-year postponement of the deadline for transposing the Directive into national law (now 26 July 2027 at the latest) and a one-year delay in its effective date (26 July 2028 for the largest entities within the scope of the CSDDD, i.e. those with an average of more than 3,000 employees and which generated global net turnover of more than EUR 900 million in the last financial year preceding 26 July 2028, with a phased application planned).  

The ‘Stop the Clock’ Directive came into force on 17 April 2025 and shall now be transposed into national law no later than 31 December 2025. In France, the DDADUE 2025 draft law has already provided for a two-year postponement of sustainability reporting requirements for waves 2 and 3, thereby aligning with the timeline set out in the ‘Stop the Clock’ Directive. 

Directive (EU) 2025/794 of the European Parliament and of the Council