The EU "Stop the Clock" Directive (April 2025) postpones by two years the sustainability reporting obligations for "Wave 2" and "Wave 3" companies under the Corporate Sustainability Reporting Directive (CSRD). It delays the first reports for many firms to 2028 (covering 2027 data) and pushes the CSDDD transposition deadline to July 2027. This reduces administrative burdens and aligns with proposed cuts to the scope of affected companies. 

Key Impacts of the 'Stop the Clock' Directive:

• Delayed Reporting Timelines: Wave 2 companies (originally due to report in 2026 for 2025 data) are deferred by two years.
• Reduced Scope: The directive, alongside the related Sustainability Omnibus proposals, aims to significantly reduce the number of companies subject to CSRD.
• Increased Thresholds: Future, more permanent changes are expected to raise the threshold for large companies to those with 1,000 employees, potentially exempting roughly 80% of firms currently expected to come into scope.
• Irish Implementation: In Ireland, the directive helps address previous anomalies, ensuring that many smaller or specifically regulated entities are not disproportionately impacted.
• Subsidiary Exemptions: The regulation reinforces exemptions for subsidiaries if their parent company provides a consolidated report.
• Business Relief: The move is designed to ease the administrative burden on businesses, providing more time to prepare for reporting and reducing the immediate impact on supply chain entities. 

Note: The "Stop the Clock" directive primarily impacts the timeline for compliance, but the core requirements of CSRD remain in place for in-scope entities.