Introduction
On 17 April 2025, the EU’s “Stop-the-Clock” Directive officially entered into force, granting a two-year delay in the application of the Corporate Sustainability Reporting Directive (CSRD) for large companies and listed SMEs. This development has direct and indirect consequences for Hungarian businesses that were preparing for the original CSRD deadlines.
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What Is the “Stop-the-Clock” Directive?
The “Stop-the-Clock” Directive was published in the Official Journal of the European Union on 16 April 2025 and became effective the following day. It postpones the CSRD sustainability reporting obligations for certain companies:
Companies in the second wave (those originally expected to report for the 2025 financial year) must now report for the 2027 financial year.
Companies in the third wave (previously reporting from the 2026 financial year) will begin reporting from 2028.
This delay was initiated through the Commission’s Omnibus I package and adopted via an urgent legislative procedure to ensure legal certainty.
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Impact on Hungarian Companies
The directive affects Hungarian businesses differently depending on their current CSRD status:
1. First-Wave Companies
Hungarian companies that were already subject to the NFRD (Non-Financial Reporting Directive), such as certain large listed firms and financial institutions, must continue reporting as originally planned. These firms are already covered under Hungarian transposition laws and remain obligated under the CSRD from 2024 onwards.
2. Second and Third-Wave Companies
For companies that were preparing for the second or third wave of CSRD applicability, the two-year delay provides significant relief:
They now have more time to prepare internal reporting systems and governance structures.
Companies that may fall outside the CSRD’s revised scope (once the Omnibus adjustments are finalised) will avoid unnecessary reporting obligations.
However, Hungary, like all Member States, must transpose this amendment into national law by 31 December 2025. Until then, the delay provides only partial clarity.
—
Legal and Strategic Considerations
Although the directive offers planning security, the long-term implications are still evolving. Key considerations include:
Whether Hungary will enact the necessary amendments in time.
Whether further changes to the scope or substance of the CSRD will follow.
How companies should adjust their ESG strategies and stakeholder communications in light of the delay.
Businesses should not interpret the delay as an invitation to pause sustainability efforts. Instead, it presents an opportunity to develop robust and compliant ESG frameworks without the pressure of imminent deadlines.
—
Conclusion: A Welcome Breather, Not a Full Stop
For Hungarian companies, the “Stop-the-Clock” Directive is a welcome development that offers breathing room. Nevertheless, the CSRD remains a cornerstone of the EU’s ESG strategy. Firms are well advised to use this time proactively to assess their data collection, stakeholder engagement, and reporting readiness. The delay is temporary—sustainability disclosure obligations are not going away.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57
How the “Stop-the-Clock” Directive Affects Hungarian Companies Under the CSRD
Introduction
On 17 April 2025, the EU’s “Stop-the-Clock” Directive officially entered into force, granting a two-year delay in the application of the Corporate Sustainability Reporting Directive (CSRD) for large companies and listed SMEs. This development has direct and indirect consequences for Hungarian businesses that were preparing for the original CSRD deadlines.
—
What Is the “Stop-the-Clock” Directive?
The “Stop-the-Clock” Directive was published in the Official Journal of the European Union on 16 April 2025 and became effective the following day. It postpones the CSRD sustainability reporting obligations for certain companies:
Companies in the second wave (those originally expected to report for the 2025 financial year) must now report for the 2027 financial year.
Companies in the third wave (previously reporting from the 2026 financial year) will begin reporting from 2028.
This delay was initiated through the Commission’s Omnibus I package and adopted via an urgent legislative procedure to ensure legal certainty.
—
Impact on Hungarian Companies
The directive affects Hungarian businesses differently depending on their current CSRD status:
1. First-Wave Companies
Hungarian companies that were already subject to the NFRD (Non-Financial Reporting Directive), such as certain large listed firms and financial institutions, must continue reporting as originally planned. These firms are already covered under Hungarian transposition laws and remain obligated under the CSRD from 2024 onwards.
2. Second and Third-Wave Companies
For companies that were preparing for the second or third wave of CSRD applicability, the two-year delay provides significant relief:
They now have more time to prepare internal reporting systems and governance structures.
Companies that may fall outside the CSRD’s revised scope (once the Omnibus adjustments are finalised) will avoid unnecessary reporting obligations.
However, Hungary, like all Member States, must transpose this amendment into national law by 31 December 2025. Until then, the delay provides only partial clarity.
—
Legal and Strategic Considerations
Although the directive offers planning security, the long-term implications are still evolving. Key considerations include:
Whether Hungary will enact the necessary amendments in time.
Whether further changes to the scope or substance of the CSRD will follow.
How companies should adjust their ESG strategies and stakeholder communications in light of the delay.
Businesses should not interpret the delay as an invitation to pause sustainability efforts. Instead, it presents an opportunity to develop robust and compliant ESG frameworks without the pressure of imminent deadlines.
—
Conclusion: A Welcome Breather, Not a Full Stop
For Hungarian companies, the “Stop-the-Clock” Directive is a welcome development that offers breathing room. Nevertheless, the CSRD remains a cornerstone of the EU’s ESG strategy. Firms are well advised to use this time proactively to assess their data collection, stakeholder engagement, and reporting readiness. The delay is temporary—sustainability disclosure obligations are not going away.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57