In brief
On 16 April 2025, Directive 2025/794 (also known as the "Stop-the-Clock Directive") was published in the Official Journal of the European Union. This directive concerns the postponement of the dates from which member states are to comply with certain corporate sustainability reporting and due diligence requirements.
This directive follows on from the Omnibus Package released by the European Commission on 26 February 2025. It amends both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D).
The Stop-the-Clock Directive postpones the dates for complying with corporate sustainability reporting and due diligence requirements, providing companies with additional time to prepare for compliance. This is to ensure smoother transitions and reduced administrative burdens.
Luxembourg's Draft Bill No. 8370, which transposes the CSRD into national law, was amended on 6 May 2025 to align with the new directive.
For more details on the EU Omnibus Simplification Package, please refer to our InsightPlus alert dated 10 March 2025.
For further information and to discuss what this development might mean for your organization, please get in touch with your usual Baker McKenzie contact.
Key takeaways
New reporting dates
The CSRD
- Large undertakings and issuers with more than 500 employees will now report in 2028 for financial years starting on or after 1 January 2027.
- Small and medium-sized undertakings, except micro-undertakings, will report in 2029 for financial years starting on or after 1 January 2028.
The CS3D
- The transposition deadline has been extended to 26 July 2027, with application dates for different sets of companies staggered between 26 July 2028 and 1 January 2030
Impact on the Luxembourg draft bill
The Luxembourgish government has introduced several key amendments to Draft Bill No. 8370 to align with the Stop-the-Clock Directive. These amendments primarily focus on postponing the reporting obligations for companies under CSRD by two years.
The European Financial Stability Facility is now explicitly excluded from the obligation to publish sustainability information, addressing a previous oversight during the CSRD negotiations.
Additionally, it is now clear that companies that were required to establish and publish sustainability information starting from the fiscal year beginning in 2024 are now exempt from this obligation for that year, although they may do so voluntarily. This amendment aims to provide legal certainty and avoid any retroactive effects on fiscal years closed before the law's enactment.
Next steps
Directive 2025/794 entered into force on 17 April 2025, and member states are required to transpose it into national law by 31 December 2025.
The Luxembourgish framework is expected to enter into force on the first day of the month following its publication in the Luxembourg official journal. The amendments to the legislation governing the audit profession shall take effect immediately upon publication, thereby enabling approved auditors and audit firms to promptly obtain the necessary accreditation for sustainability information assurance.
