This week’s EU Omnibus developments

The ‘stop-the-clock’ proposal cleared its final major hurdle this week, when it was approved by European Parliament.

Hot on the heels of Council’s wholesale support for the European Commission proposal last week, MEPs voted 531-69 in its favour on Thursday.

That means it can move ahead with no political negotiations.

The changes give companies in the second and third phases of the Corporate Sustainability Reporting Directive (CSRD) an extra two years to start disclosing.

Large, non-listed firms with more than 250 employees, €50m turnover and/or €25m in assets will therefore have until 2028 to comply, and listed SMEs will have until 2029.

For now, it doesn’t impact the first wave of companies – those already covered under the EU’s Non-Financial Reporting Directive – although it’s possible legislators will introduce carve-outs for them as part of the second proposal, which is still being negotiated.

The approval of the ‘stop-the-clock’ proposal also means the first group of companies due to comply with the Corporate Sustainability Due Diligence Directive will get an extra year. So those with more than 5,000 employees have the same 2028 deadline as those with 3,000.

Business groups including EuroChambres, the American Chamber of Commerce and European Brand Association will be pleased with the outcome of Parliament’s vote, having urged lawmakers this week to introduce the delays quickly.

“In this challenging economic and regulatory landscape, legal certainty is paramount,” they said in a statement signed by nearly 20 trade bodies, including representatives for the food, drink, technology and semiconductors industries.

“Moreover, reporting obligations under these laws are considerably resource intensive, often requiring additional headcount and a substantial financial investment.”

“By swiftly postponing requirements set in the CSRD and the CS3D, policymakers can avoid squandering vital business resources on systems that may soon become redundant or require drastic overhauls.”

A timeline circulating this week from JURI, European Parliament’s legal affairs committee, suggests MEPs won’t finalise their position on the second omnibus proposal until Q4.