New EU Directive Delays ESG Reporting Obligations for Companies

On April 14, 2025, the European Parliament and the Council adopted Directive (EU) 2025/794, which amends Directives (EU) 2022/2464 (Corporate Sustainability Reporting Directive – CSRD) and (EU) 2024/1760 (Corporate Sustainability Due Diligence Directive – CSDDD) as regards the dates from which Member States must apply certain sustainability reporting and due diligence requirements for companies (Stop the Clock Directive).

This is good news for companies that have not yet implemented their sustainability governance systems in line with EU sustainability requirements.

The Stop the Clock Directive postpones the application dates of certain corporate sustainability reporting and due diligence requirements, as well as the deadline for transposing the due diligence provisions into national law. Specifically:

The sustainability reporting requirements for large companies and parent undertakings of large groups, as established by Directive (EU) 2022/2464, will be postponed by two years. The obligation to report on sustainability will apply for financial years starting on or after January 1, 2027, instead of January 1, 2025.

The sustainability reporting requirements for small and medium-sized enterprises (SMEs) with securities listed on regulated markets, as defined in Directive (EU) 2022/2464, will also be postponed by two years. These requirements will apply for financial years starting on or after January 1, 2028, instead of January 1, 2026.

This Directive also postpones the application of Directive (EU) 2024/1760 on corporate sustainability due diligence.

The Stop the Clock Directive entered into force on April 15, 2025. Member States must transpose the Directive into national law by December 31, 2025.

The new Directive will impact the timelines established in Lithuanian legislation, including the Law on Corporate and Group Reporting, the Law on Financial Statements Audit and Other Assurance Services, as well as the Law on Securities.​​​​