What’s next for EU businesses following the delay to CSRD and CSDDD?

The European Parliament has voted to delay the implementation of two key sustainability directives: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D).

The delays were proposed by the European Commission as a part of the ‘Stop the Clock’ package that was urgently tabled, with a final vote approving the delay on 3 April 2025.

Understanding the delay

The decision grants businesses up to two extra years to align with the CSRD, meaning that companies previously required to report in 2026 or 2027 will now have until 2028. Similarly, EU member states now have until July 2027 to incorporate the CSDDD into their national laws, extending the timeline for corporate due diligence obligations.

The rationale behind the delay is to reduce the administrative burden on businesses during a challenging economic period. The European Commission has also signalled an ambition to simplify reporting requirements, aiming to cut obligations by 25% for large companies and 35% for SMEs.

What does this mean for businesses?

The postponement offers companies more time to prepare for compliance, but it does not remove the requirement to act. Businesses should use this time strategically to develop robust sustainability reporting and due diligence processes.

Key areas of focus include:

• Double materiality assessments: CSRD requires companies to evaluate both their impact on people and the environment (impact materiality) and the financial relevance of sustainability issues (financial materiality). Understanding and integrating these assessments into reporting frameworks remains crucial. Find out more on double materiality here.
• Due diligence readiness: Despite the delay, companies must still prepare for CSDDD obligations, which will require them to identify, prevent, and mitigate human rights and environmental risks in their operations and supply chains.
• Investment and transparency considerations: Investors and stakeholders increasingly expect businesses to demonstrate sustainability commitments, regardless of regulatory timelines. Companies that continue to build strong ESG (environmental, social, and governance) strategies will likely maintain a competitive edge.

Addressing concerns

While the delay provides breathing room, critics argue that it creates uncertainty and could slow down progress on corporate sustainability efforts. Some businesses may choose to move ahead with reporting and due diligence as planned to maintain momentum and investor confidence.

Looking ahead

For businesses, the message is clear: while deadlines have shifted, sustainability obligations are not going away. Rather than seeing this as a reason to pause, companies should use this time to strengthen their sustainability strategies, engage with stakeholders, and ensure they are fully prepared for the eventual implementation of these directives.

By taking proactive steps now, businesses can turn this delay into an opportunity to refine their approach and stay ahead of evolving sustainability expectations in the EU market.