On 26 February 2025, the European Commission published two Omnibus simplification packages, consisting of legislative proposals to simplify the EU’s sustainability reporting rules. The first Omnibus package includes the so-called ‘stop the clock’ proposal to postpone by two years the entry into application of the CSRD requirements for large undertakings that have not yet started reporting, and by one year the transposition deadline and the first phase of the application of the CSDDD (read our Omnibus blog here for the full breakdown of the proposals).

To provide legal certainty, the EU co-legislators (the European Parliament and EU Member States in the Council of the EU) have been asked by both the EU Commission and EU leaders to adopt the ‘stop the clock’ proposal by June 2025. As both co-legislators have endorsed the initial proposal without any changes, it will now need to only be formally adopted by the Council of the EU before it can enter into force.

Next steps

The purpose of the swift adoption of the ‘stop the clock’ proposal is also to provide the co-legislators with sufficient time to consider and agree on the other proposals in the Omnibus package, namely those introducing substantive changes to the CSRD and CSDDD, as well as the Carbon Border Adjustment Mechanism (CBAM). Both the Parliament and the Council of the EU are still in the initial stages of assessing the proposals and preparing their respective positions. Initial policy debates suggest that potential points of contention in the forthcoming legislative debates will be the reduction of scope of reporting companies and the removal of the EU-wide civil liability regime. Work on the simplification packages is expected to be treated as a matter of priority by both institutions, and agreement on the final legal text is likely to be reached by the end of 2025.

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