Sustainability Reporting & ESG
“STOP THE CLOCK”
The European Parliament voted on 3 April 2025 to approve the proposed “stop the clock” directive, which will delay CSRD application for so-called "wave 2" and "wave 3" companies by 2 years. It will also delay transposition and application of the CSDDD by 1 year.
Once the Council and the Parliament have formally approved the final text, the directive will be adopted and published in the Official Journal of the European Union. The directive will enter into force one day after its publication, and Member States will be required to transpose it into national law by 31 December 2025.
A press release from the Department of Enterprise Trade and Employment confirmed that Minister Burke is “focused on quickly implementing the EU’s Stop the Clock proposal together with the changes proposed by the wider Omnibus, once these are adopted at EU level, thereby delivering certainty for business at all levels in Ireland.”
The Department also confirmed that the Irish legislation implementing the CSRD will be amended to provide further clarification and to reduce the number of companies that fall within scope. It is anticipated that this legislative update may be in response to submissions from Arthur Cox LLP, along with other law firms and professional bodies, addressing anomalies that affect both the scope and availability of subsidiary exemptions under the current Irish CSRD legislation.
For more information, see our recent Insights: European Parliament Approves “Stop the Clock” Directive Proposal.
OMNIBUS PROPOSAL ON SUBSTANTIVE AMENDMENTS
The "stop the clock" directive is intended to provide additional time for the co-legislators to reach agreement on the second proposed directive under the Omnibus package, which provides for substantive amendments to the CSRD and CSDDD, including reducing CSRD scope.
The European Commission and European Council have urged co-legislators to reach agreement on the substantive amendments proposal by December 2025. However, it is possible that negotiations may continue into 2026.
REVISION OF ESRS
EFRAG has been tasked with developing technical advice to the European Commission on simplifying the ESRS under the CSRD (481 KB) as part of the Omnibus simplification process. The Commission has asked EFRAG to confirm its internal timeline and work plan by 15 April 2025 and to deliver its technical advice on revised ESRS by 31 October 2025.
The revised ESRS are due to be adopted by the Commission, at the latest, six months after the entry into force of the substantive amendments directive (see above).
This week EFRAG launched a public call for input on the ESRS Revision, which closes on 6 May 2025.
EU TAXONOMY: FAQ GUIDANCE
On 5 March 2025, the European Commission released its final form FAQ Guidance (1,586 KB), providing technical explanations on various aspects of the EU Taxonomy Regulation. The guidance covers the application of general requirements, technical screening criteria for specific activities outlined in the Climate and Environmental Delegated Acts, and the generic "Do No Significant Harm" criteria for climate change adaptation, pollution prevention and control and protection and restoration of biodiversity and ecosystems. The FAQs were previously published in draft form in November 2024.
CBAM: AUTHORISED DECLARANTS
The European Commission published an Implementing Regulation, which came into force from 28 March 2025, outlining the conditions and procedures for obtaining the status of an authorised Carbon Border Adjustment Mechanism (CBAM) declarant. From 1 January 2026, only authorised CBAM declarants will be permitted to import in-scope goods into the customs territory of the EU.
For more information, see our recent Insights: New Rules indicate Lead-in Time to obtain Authorised CBAM Declarant Status.
SUSTAINABILITY REPORTING HUB
Our Sustainability Reporting Hub is a resource to assist companies with obligations under the CSRD, EU Taxonomy Regulation and CSDDD.