EU CSRD: Commission adopts “quick-fix” Delegated Act postponing phased-in reporting requirements for “wave one” companies

On 11 July 2025, the European Commission adopted a so-called “quick-fix” Delegated Act to postpone additional phased-in reporting requirements set out in the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). The Delegated Act and its Annex were published together with the summary of modifications and a press release. 

Background - Omnibus I and phased application

The Stop-the-Clock Directive, which forms part of the Omnibus I package, delays the entry into application of the CSRD requirements for “wave two” and “wave three” companies by two years. The Directive entered into force on 17 April 2025. Importantly, the Stop-the-Clock Directive does not postpone reporting requirements for companies that started reporting for the 2024 financial year (“wave one” companies).

The Commission also proposed in the “Requirements proposal” to increase the application threshold for both EU undertakings and non-EU issuers (whether individually or on a consolidated basis) to 1,000 employees. The Requirements proposal is currently undergoing the ordinary legislative procedure.

Certain reporting requirements listed in Appendix C of ESRS 1 apply only from the second or third year after a company first applies the standards. Some of these phase-in provisions apply to all companies within scope of the CSRD, while others apply only to in-scope companies with up to 750 employees. Meanwhile, the Commission is reviewing the ESRS with the stated aim of substantially reducing the number of data requirements. According to the press release, the Commission expects to complete this review “by the 2027 financial year”.

Without the “quick-fix” Delegated Act, wave one companies that, according to the Requirements proposal, would no longer fall within the scope of the CSRD, would nevertheless be required to report additional information for the 2025 and 2026 financial years. Similarly, wave one companies would have had to comply with extra reporting requirements for 2025 and 2026, even though the revised and simplified ESRS might subsequently alter these obligations. The Commission also noted in the Explanatory Memorandum to the Delegated Act that it is inconsistent with the burden reduction imperative for wave one companies with more than 750 employees to be excluded from phase-in provisions available to other wave one companies.

Quick-fix changes

The quick-fix Delegated Act:

• defers by two years the additional reporting requirements that wave one companies would otherwise have had to meet for the 2025 and 2026 financial years;
• extends to all wave one companies the phase-in provisions for ESRS E4 (biodiversity and ecosystems), ESRS S2 (workers in the value chain), ESRS S3 (affected communities) and ESRS S4 (consumers and end-users), which previously applied only to those with up to 750 employees;
• extends to all wave one companies the safeguard provision which requires, where an undertaking uses temporary exemptions for a complete topical standard, that it must still report certain summarised information on the relevant topic if the undertaking has determined the topic is material.

Next steps

Once the Delegated Act is sent to the co-legislators, the European Parliament and the Council will have two months (extendable by a further two months) to formally object. If no objections are raised, the Delegated Act will be published in the Official Journal of the EU (OJEU) and will enter into force on the third day following publication.

The Delegated Act may also enter into force before expiry of that period if both the Parliament and the Council confirm to the Commission that they will not object. Neither the European Parliament nor the Council has the power to amend the text of the Delegated Act - they may only veto it (and can request the Commission to amend it in whole or in part).

The Delegated Act will apply for financial years beginning on or after 1 January 2025.

For further details of the first Omnibus package and ESRS, see our CSRD demystified materials.