EU sustainability rules: Clarity emerging through omnibus reforms

The second quarter of 2025 has seen significant developments in the European Union’s sustainability reporting and due diligence landscape, which have direct implications for the construction industry. These changes are driven by the EU’s Omnibus Simplification Package (OSP), aimed at rebalancing the ambition of the Green Deal with the practical realities of business compliance.

‘Stop-the-Clock’ directive brings breathing space

A key milestone was the EU’s adoption of the “Stop-the-Clock” Directive in April 2025. This measure postpones the reporting deadlines for many companies under the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Formally in force since 17 April, the directive must be transposed into Irish law by 31 December 2025.

The delay provides immediate relief for businesses, particularly those in “Wave 2” and “Wave 3” of the CSRD rollout, allowing additional time to adapt to complex and resource-intensive reporting obligations. However, this does not signal a pause in preparations—legislative reform is ongoing, and future reporting will continue to be demanding.

Irish response: Legislative amendments underway

Ireland’s current CSRD regulations, adopted in 2024, have faced widespread criticism for exceeding EU requirements—broadening the scope, hastening deadlines, and restricting exemptions. In response, the Department of Enterprise, Trade and Employment (DETE) has confirmed its intention to amend this legislation.

Minister Peter Burke has committed to:

• Swiftly transposing the Stop-the-Clock directive, and

• Clarifying and potentially narrowing the scope of Ireland’s CSRD implementation.

This national adjustment aims to align Irish law more closely with updated EU expectations, addressing concerns from Irish legal experts and alleviating unnecessary regulatory burdens on businesses.

Outlook: Reform still evolving

While the Stop-the-Clock directive offers short-term clarity, more substantial reforms are still being negotiated at the EU level. These include proposals to:

• Narrow the scope of CSRD (e.g., companies with ≥1,000 employees and high turnover only),

• Simplify value chain reporting and CSDDD obligations,

• Revise the European Sustainability Reporting Standards (ESRS).

The EU has tasked EFRAG with delivering simplified ESRS by 31 October 2025, with implementation expected in 2027. Irish businesses should use this time to enhance internal ESG systems and prepare for upcoming compliance.

Key takeaways for CIF members

• CSRD and CSDDD deadlines have been officially delayed via the Stop-the-Clock Directive.

• Ireland will amend its CSRD legislation to align it with the revised EU rules.

• Broader simplifications under the Omnibus package are still being negotiated.

• Companies should continue ESG preparations and monitor national developments.

CIF will continue to monitor these regulatory changes and update members as further guidance becomes available.