EU Parliament approves fast-track vote on sustainability reporting delay

The European Parliament today voted to fast-track the legislative process on its ‘stop-the-clock’ proposal, which, if passed, would postpone sustainability reporting and due diligence obligations for companies by two years.

Members of the European Parliament (MEPs) will now vote on the measure, which has already been approved by the EU Council, on Thursday, April 3. The fast-track approach was overwhelmingly approved with 427 votes in favour, 221 against and 14 abstentions.

The stop-the-clock proposal is part of the EU Omnibus legislation seeking to simplify sustainability compliance for European companies. If approved this week, it would postpone the application of the Corporate Sustainability Reporting Directive (CSRD) by two years for large companies that were meant to start reporting in 2026, as well as listed SMEs. It would also delay the first phase of implementation of the Corporate Sustainability Due Diligence Directive (CSDDD) by one year, from 2027 to 2028.

The EU Omnibus has been widely criticised as “a reckless retreat from sustainability”, with many observers expressing concern about the rush to amend laws that took years of consultations to be created in the first place. But Thursday’s vote will at least provide clarity for companies on when they can expect to have to comply with sustainability reporting and due diligence requirements – something they have been asking for since the launch of the omnibus directive.

Next steps for EU Omnibus

Thursday’s vote is only the first step in approving the measures of the EU Omnibus. Once the delay is approved or rejected, lawmakers will turn their attention to a directive to change the scope and content of both CSRD and CSDDD.

This is where most of the disagreement lies: the first parliamentary debate on the EU Omnibus, which took place in early March, revealed deep divisions between MEPs, with those on the right stating that the simplification doesn’t go far enough and asking for more deregulation, and those on the left condemning what they see as the European Commission’s attempt to dismantle the EU’s sustainability leadership.

On the corporate side, large European companies including Nestlé, Primark, Mars and Unilever have taken a stand against reopening negotiations for sustainability reporting and due diligence laws. They argue not only that these are necessary to make business more resilient, but also that they have already invested significant amounts into compliance, meaning that any amendment would create unforeseen costs.