‘Stop the clock’ - what's changing and who benefits?
In response to increasing regulatory burdens and concern among businesses, the European Commission has proposed changes known as “Stop the clock”. This is an important part of the Omnibus package to simplify and make more realistic the implementation of the Corporate Sustainability Reporting Directive (CSRD), the EU's sustainability reporting regime. The “Stop the clock” mechanism was formally adopted by the EU institutions in April 2025. The European Parliament approved it on 3 April 2025 and the Council of the European Union adopted the Directive on 14 April 2025. The Directive was published in the Official Journal of the EU on 16 April and entered into force one day later, on 17 April 2025. Member States have until 31 December 2025 to transpose the directive into national law.
What does “Stop the clock” mean?
In essence, it refers to the freezing or postponement of reporting obligations for selected groups of companies. Practically speaking, it means that some entities will gain additional time to prepare for implementing comprehensive ESG reporting standards.
What exactly is changing?
Postponement of reporting obligations for certain companies:
Small and medium-sized listed enterprises (SMEs) receive an additional two years, moving the reporting deadline from 2027 to 2029.
Large companies that were due to start reporting in 2026 also benefit from a delay in implementing some detailed requirements.
Delay or cancellation of sector-specific ESRS (European Sustainability Reporting Standards): These standards, intended to tailor reporting to industry-specific needs, are now postponed or dropped entirely.
Reduction in the scope of required disclosures: Particularly those concerning value chains and business partners, meaning fewer immediate reporting burdens.
Who benefits?
Small and medium-sized listed companies (SMEs) – the main beneficiaries of "Stop the clock", gaining extra time to build ESG capacity, select reporting tools, and reduce compliance risks.
Companies in less ESG-mature markets – especially in Central and Eastern Europe, where awareness and preparedness for ESG reporting are still developing.
ESG consultants and advisory firms – will be able to support implementation over a more extended timeline, easing delivery pressure.
For whom are the changes neutral?
Large companies already subject to non-financial reporting (e.g. under NFRD) – for them, “Stop the clock” brings no significant changes. Many already embed ESG practices into operations and investor communications.
Companies in the first CSRD wave (reporting for FY 2024) – these organizations will not benefit from the delay, as their obligations have already taken effect.
Who might be disadvantaged?
Investors and financial institutions – delays mean a longer period without comprehensive ESG data from parts of the market, complicating risk assessments, sustainable investment strategies, and compliance with the SFDR and EU Taxonomy.
Environmental and social organizations – view the move as a weakening of the EU’s climate commitment, warning that “Stop the clock” may set a precedent for further regulatory backtracking.
Conclusion
“Stop the clock” is a pragmatic response to regulatory fatigue and the varying readiness of markets for full ESG disclosure. While the deadline extension provides much-needed breathing room, it also raises concerns about transparency, comparability, and the pace of sustainable transition.
In short: more time now, but higher expectations later. Companies that use this time wisely to prepare will have the advantage. Those who delay may find themselves caught off guard when the clock starts ticking again.