The EU Member states’ representatives (Coreper) have approved the EU Council’s position (“negotiating mandate”) on one of the Commission’s proposals to simplify EU rules and thus boost EU competitiveness on 26 March 2025. This proposal (the “Stop-the-clock” directive) postpones the dates of application of certain corporate sustainability reporting and due diligence requirements, as well as the transposition deadline of the due diligence provisions.
“Simplification is one of the priorities of the Polish presidency. Today’s agreement is a first step on our decisive path to cut red tape and make the EU more competitive,” said Adam Szłapka, Minister for the European Union of Poland.
The proposal forms part of the “Omnibus I” package adopted by the Commission at the end of February 2025 to simplify EU legislation in the field of sustainability. In view of significant implications for the business community, the Polish presidency has treated this proposal with utmost priority with the aim of providing EU companies with the necessary legal certainty as regards their reporting and due diligence obligations. Member states have broadly shared the presidency’s sense of urgency and, in that view, supported the Commission’s proposal to postpone:
- by two years the entry into application of the Corporate Sustainability Reporting Directive (CSRD) requirements for large companies that have not yet started reporting, as well as listed SMEs, and
- by one year the transposition deadline and the first phase of the application (covering the largest companies) of the Corporate Sustainability Due Diligence Directive (CSDDD).
A possible swift agreement between the co-legislators will provide them with time to agree on substantive changes to the CSRD and CSDDD, also proposed by the Commission as part of the “Omnibus I” package on sustainability.
Next steps
Following this approval of the Council’s negotiating mandate by Coreper, the presidency is enabled to enter interinstitutional negotiations with a view to reaching a provisional agreement with the European Parliament on this proposal. For its part, the European Parliament has scheduled on 1 April a vote on request for urgent procedure on this proposal.
Background
In October 2024, the European Council called on all EU institutions, member states and stakeholders, as a matter of priority, to take work forward, notably in response to the challenges identified in the reports by Enrico Letta (“Much more than a market”) and Mario Draghi (“The future of European competitiveness”). The Budapest declaration of 8 November 2024 subsequently called for “launching a simplification revolution”, by ensuring a clear, simple and smart regulatory framework for businesses and drastically reducing administrative, regulatory and reporting burdens, in particular for SMEs.
On 26 February 2025, as a follow-up to EU leaders’ call, the Commission put forward two “Omnibus” packages, aiming to simplify existing legislation in the fields of sustainability and investment, respectively. On 20 March 2025, leaders urged the co-legislators to take work forward on these Omnibus simplification packages as a matter of priority and with a high level of ambition, with a view to finalising them as soon as possible in 2025.
On this occasion, the European Council specifically called on co-legislators to adopt the “Stop-the-clock” mechanism without delay and at the latest by June 2025. The “Economic and Financial Affairs” and “Competitiveness” Council held policy debates on the omnibus package on 11 and 12 March 2025, with ministers strongly welcoming the Commission’s simplification efforts and supporting the presidency’s intention to ensure fast progress.
