EU Parliament Votes for “Stop-the-Clock” on Sustainability Reporting: What it means for Businesses

Delays approved under the Omnibus proposal

This vote confirms that the Corporate Sustainability Reporting Directive (CSRD) will be delayed by two years for waves 2 and 3, while the Corporate Sustainability Due Diligence Directive (CSDDD) will be postponed by one year (previously set for July 2026). The final legislation will be published in the EU Official Journal once agreed upon by the EU Parliament, Council and Commission.

In Ireland, the Minister for Enterprise, Tourism and Employment, Peter Burke, has welcomed the Omnibus and will prioritise implementing the changes as soon as possible. The CSRD was moved into Irish law in July 2024 by statutory instrument.

Impact on Businesses

The vote provides some clarity for businesses and investors who will have to report in the coming years, with more time to undertake value chain assessments and stakeholder engagements, as the double materiality approach and limited assurance requirements are still in place for undertakings remaining in scope.

The Omnibus tackles a well-known problem of complexity for companies struggling with the number of disclosure requirements and data points, where there were, in many cases, no previous data and having to incorporate a robust sustainability impact approach into their risks and opportunities for the first time.

The “Stop the Clock” timelines allow the EU Commission time to start working on a second phase, a “Content” directive that seeks to amend the CSRD to make it more manageable for businesses and improve usability.

Why “Stop-the-Clock” Doesn’t mean a stop on Sustainability

While regulatory deadlines have shifted, the EU Green Deal remains intact, with Net Zero targets for 2050 and an interim goal of a 55% reduction by 2030 still in place. Ireland’s Climate Action Plan – which is backed by law – faces a €26 billion compliance cost exposure if sustainability milestones are not met. The poly-crisis of climate risk, biodiversity loss, and pollution is increasingly a high-stakes risk for businesses and communities.

Businesses must use this time wisely. The focus should shift from reporting for compliance to actionable sustainability projects that will drive measurable climate impact, biodiversity protection and pollution reduction.

Key Insights from Our recent Omnibus update Webinar

On the 26 of March, Forvis Mazars hosted a live webinar with industry experts discussing the impacts of the Omnibus proposals, sustainability reporting challenges and next steps for businesses. You can watch the full webinar via this link: Forvis Mazars Omnibus Webinar.

The expert panel was facilitated by our Head of Sustainability, Johnny Meehan, and comprised of Dr Maximilian Schormair, Assistant Professor, Trinity Business School; Mark McKenzie, Principal, Mark McKenzie Online; Aoife Gillen, Principal Sustainability Consultant, Enviroguide/DNV; and Forvis Mazars Consulting Partner, Liam McKenna.

The top 5 takeaways include:

1. Develop a compliance roadmap for your business

Compliance extends beyond the Omnibus. Sustainability regulation is expanding across multiple areas, including nature restoration laws, green claims and product labelling regulations, forced labour and supply chain due diligence, circular economy and waste reduction policies.

The EU’s “polluter pays” principle means businesses must proactively comply. In Ireland, companies need a compliance roadmap, given the legally binding Climate Action Plan and the potential for legal actions against the Government and corporations

2. Integrate sustainability into business strategy

The CSRD and EU Green Deal are designed to integrate sustainability into corporate strategy. The Omnibus seeks to reduce complexity, but the reporting framework is here to stay. Businesses should align their strategy now rather than trying to retrofit sustainability compliance later.

3. Double Materiality Assessments (DMAs) are a competitive advantage

DMAs help businesses identify high-impact sustainability risks and opportunities (IROs), prioritise strategic sustainability investments, and focus on three core ESG areas: climate, biodiversity, and pollution. By using DMAs, companies can pivot towards sustainability projects that generate impact-driven data – essential for future compliance and competitive positioning.

4. Embrace Voluntary reporting standards

Leverage the Voluntary SME standard produced by EFRAG as a guideline on minimum requirements and disclosures. To access sustainable Finance, businesses must demonstrate climate‑related efforts. A recent report from the European Commission on Streamlining sustainable finance for SMEs offers guidance for companies not in scope for EU Taxonomy.

5. Consider the cost of inaction

Businesses are recognising there is a risk to inaction on Climate. A recent Kearney report, Staying the Course: CFOs and the Green Transition, revealed:

• 93% of CFOs see a clear business case for investing in sustainability.
• 69% expect a higher return on investment (ROI) from sustainability initiatives than from traditional investments.

In Ireland, the Climate Action Plan faces a potential €26 billion compliance cost if it fails to meet EU climate targets.

How Forvis Mazars can help

Our sustainability experts go beyond assessing basic reporting requirements. We provide tangible recommendations on how to embed a sustainability strategy which supports your organisation's objectives and values. Our team works with you to create a bespoke sustainability roadmap and implement the changes that help you gain a competitive edge in the evolving ESG landscape by building the foundations for a strong, thriving and sustainable future for the business.