Last Updated on April 23, 2025
On 16 April 2025, Directive 2025/794 (the so-called ‘Stop the Clock’ Directive) was published, postponing the application dates of certain corporate sustainability reporting requirements in Directive 2022/2464 (so-called ‘CSRD’) as well as the deadline for transposition of the due diligence provisions in Directive 2024/1760 (the so-called ‘CS3D’).
The measure introduces a more gradual and realistic implementation of EU-derived regulatory obligations on environmental and social sustainability, taking into account the operational needs and timeframes businesses require for implementation.
Member States will have to transpose the Directive by 31 December 2025.
CSRD Directive
Corporate Sustainability Reporting Directive 2022/2464, transposed in Italy by Legislative Decree 125/2024 (see our newsflash of 19 September 2024: ‘ESG: transparency and responsibility for Italian companies’), introduces the obligation for companies to prepare a sustainability report in accordance with European Sustainability Reporting Standards (so-called ESRS) which must provide all the information, including financial, regarding the impact of the company’s operations on sustainability issues, as well as the ways in which these issues influence the company’s development and performance (so-called principle of double materiality or double relevance). These data must also cover personnel (e.g. working conditions, equality of treatment and other labour-related rights), not limited only to the company’s own workforce, but also extended to include that of their respective business partners in the so-called value chain.
In the light of entry into force of the new Directive, the measures imposed by the CSRD will apply from the financial year beginning:
- 1 January 2027 instead of 2025 (or a later date), for all large companies and parent companies of large groups;
- 1 January 2028 instead of 2026 (or a later date), for small and medium-sized listed companies, small and non-complex credit institutions and captive insurance and reinsurance companies;
The date of the financial year beginning 1 January 2028 (or a later date) for non-EU companies remains unchanged.
Please note that the new reporting requirements are, however, already applicable, as of the financial year beginning 1 January 2024, for public interest entities (e.g. listed companies, banks, insurance and reinsurance companies) with more than 500 employees.
CS3D Directive
Corporate Sustainability Due Diligence Directive 2024/1760 aims to further strengthen companies’ due diligence for sustainability purposes by requiring them to ensure compliance with obligations regarding environmental and human rights (including workers’ rights) throughout the value chain.
The ‘Stop the clock’ Directive means that Italy will now have to transpose the CS3D Directive by 26 July 2027 instead of 26 July 2026, with the main obligations applying from:
- 26 July 2028 for European companies with more than 3,000 employees and a worldwide net turnover of more than EUR 900 million as well as non-EU companies with the same turnover;
- 26 July 2029 for all the other cases.
Toffoletto De Luca Tamajo is at your disposal for any clarification you may need.
