With a final vote of 531 in favor and 69 opposed, the EU Parliament has voted in favor of the “stop-the-clock” proposal to delay reporting and due diligence requirements for the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The proposal means the EU Council will move forward with the following delays:

• CSRD requirements for large companies that have not started reporting, as well as listed small and medium enterprises, are delayed by two years.
• CSDDD transposition deadline and the first phase of the application covering the largest companies are delayed by one year.

The parliament voted in favor of a request for urgent procedure on the “stop-the-clock” proposal on 1 April 2025, giving members of parliament (MEPs) only until 2 April to submit proposed amendments before today’s vote.

The proposal is part of the general pushback against EU sustainability regulations that culminated in the Omnibus proposal on 26 February 2025, which proposes, among other things, slashing reporting requirements for the CSRD and removing 80% of companies from its scope while drastically reducing due diligence obligations for companies in scope of the CSDDD.

“Now that the reporting requirements of the CSRD and CSDDD have been delayed until 2028, companies can take a step back from their preparations,” said Jon McGowan, a Florida-based attorney working on business and sustainability. “Now the focus shifts to the proposed simplifications. It is unclear how long that will take. The commission has indicated that they expect it as early as this summer, but I suspect that it will take much longer.”

Fractured Coalitions and Tense Negotiations

Several coalitions pushed their interests before the proposal was passed. The center-left Socialists and Democrats (S&D) and the center-right European People’s Party (EPP) tried to find common ground to pass the proposal and provide much-needed certainty for businesses desperate to understand what their reporting obligations will be and when they will apply. However, with the S&D favoring preserving the spirit of the Green Deal and the EPP looking for significant cuts, those negotiations broke down. In this week’s vote on the request for urgent procedure, the S&D rejected the motion, while the EPP joined forces with other parties further to the right to ensure its success.

All proposed amendments were rejected, but some of them are notable as a measure of the prevailing mood in some parts of the EU Parliament. A group of MEPs calling themselves Patriots for Europe tabled a proposal that contained significant changes to EU sustainability regulations, including postponing the implementation of the CSRD until 2030 and CSDDD until 2040 and reducing the European Sustainability Reporting Standards (ESRS) data points by 90%. While these proposed amendments failed, they provide insight into the extreme positions among EU members that could spell difficult negotiations ahead for the Omnibus.

“Today’s voting result is double-edged,” said Professor Andreas Rasche from the Copenhagen Business School in a statement to 3E. “On the one hand, it provides certainty for businesses and investors as to when the CSRD and CSDDD will apply. It will also help to avoid a situation where some firms would come into scope of the CSRD in 2026 and then fall out again two years later because of the new scope criteria that the Omnibus proposes. However, on the other hand, this vote does not send a good political signal.”

Rasche pointed out that the EPP reached a majority only with the help of right-wing and far right groups in the parliament. “This undermines hope that parties in the center can find a consensus once the full Omnibus proposal is being negotiated,” he said.

EU member states have until 31 December 2025 to transpose the “stop-the-clock” directive into national law. Attention will now turn to the negotiations on the broader Omnibus proposal, which is expected to produce even more rigorous debate than did the process for the “stop-the-clock” proposal.

“Supporters of strong reporting requirements are not going to go away quietly,” said McGowan. “Expect a vigorous debate in the Parliament and an aggressive use of procedures to try to save as much of the CSRD and CSDDD as possible.”

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