Stop-the-Clock Directive

The Stop-the-Clock Directive (Directive (EU) 2025/794) is the EU directive that postponed by two years the application of CSRD reporting requirements for Wave 2 and Wave 3 companies. It entered into force on April 17, 2025. Wave 2 companies (large EU companies not qualifying as public interest entities, previously required to report for the 2025 financial year) are now required to report for the 2027 financial year at the earliest. Wave 3 (listed SMEs, non-EU large companies) were also delayed. Wave 1 companies (large public interest entities reporting from 2024 FY) were not affected. The directive also delayed the first phase of CSDDD requirements by one year.

Stop-the-Clock Directive (Directive (EU) 2025/794), OJ L, April 16, 2025; entered into force April 17, 2025.

For Wave 2 companies: no CSRD sustainability statement is required for the 2025 or 2026 financial years. The first reporting obligation now falls on the 2027 financial year (published 2028). However, companies should continue internal ESG data collection and system development: the delay does not remove the obligation, and companies that invest in preparation now will be better positioned for both the regulatory requirement and the ongoing investor, customer, and supply chain pressure for ESG data.