Brussels is hitting the pause button. But is it a moment of relief – or just the calm before the storm?
Since our last article unpacking the European Commission’s Omnibus Simplification Package, the conversation around ESG reporting has taken a pivotal turn. In this second part of our series, we break down what’s changed, what it means for businesses, and what lies ahead.
A quick refresher…
The Omnibus Package, unveiled earlier this year, is a set of proposals designed to simplify and streamline sustainability reporting across the EU. At its core, it aims to reduce red tape, ease administrative burdens on companies, and boost European competitiveness – all without rolling back the EU’s long-term sustainability ambitions.
Now, things are moving from proposal to negotiation.
What just happened?
Last week, representatives of EU Member States (Coreper) gave the green light to the Council’s negotiating position on one of the key components of the Omnibus Package: the “Stop-the-clock” Directive.
This directive proposes to delay some of the most pressing corporate sustainability reporting and due diligence deadlines. Specifically:
- CSRD (Corporate Sustainability Reporting Directive): Companies that were due to begin reporting in 2026 and 2027 – namely large non-reporting companies and listed SMEs – now have two more years.
- CSDDD (Corporate Sustainability Due Diligence Directive): The first phase, which affects the largest companies, is pushed one year forward, with the same extension granted to the transposition deadline.
This is a significant development, and one that shows just how much political weight the Omnibus Package carries. The Polish Presidency, currently steering the Council, prioritized the directive to give companies what they called “legal certainty” during a period of regulatory flux.
Why the delay?
It’s not just about buying time. The delays serve a bigger strategic purpose.
By postponing these deadlines, EU lawmakers are opening a window for more substantive changes to be negotiated – potentially tweaking the CSRD and CSDDD frameworks in response to industry feedback, implementation challenges, and broader economic concerns. Think of it as pressing pause, not stop.
The move is also an acknowledgment that many businesses simply aren’t ready. The regulatory landscape has been evolving rapidly, and implementing high-stakes reporting and due diligence processes is no small feat – especially for smaller listed companies.
What’s next?
With the Council’s mandate in place, interinstitutional negotiations between the EU Council and the European Parliament can now begin. The Parliament, for its part, has scheduled a vote on the urgent procedure for April 1, 2025. If approved, this could fast-track the legislative process and bring clarity sooner rather than later.
A provisional agreement is within reach. But even with this breathing room, companies shouldn’t treat this as a reason to slow down their ESG preparations.
The bigger picture
At a time when sustainability is both a business imperative and a regulatory challenge, the Omnibus Package reflects the EU’s attempt to strike a balance: maintain ambition but allow space for adaptation. It’s a pragmatic pivot rather than a policy retreat.
For now, businesses can exhale – but they must stay alert. The next chapter in Europe’s ESG rulebook is still being written, and those who prepare early will be better positioned to thrive once the clock starts ticking again.
Proposed Key Regulatory Changes, Simplified for You:
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