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46 SMT007 MAGAZINE I MARCH 2026 published in the Official Journal of the European Union in March 2026. European Member States are required to transpose all provisions of the directive within 12 months of their entry into force, except for those related to CSDDD, which must be transposed by July 26, 2028. Read our statement on the omnibus political agreement. In addition, the related so-called "Stop-the- Clock" directive (the "timeline" proposal) post- poned the application of the existing report- ing requirements for Wave 2 and Wave 3 entities under the current CSRD, including EUT disclosures required by the CSRD, and delayed the effective date to comply with the first phase of requirements of the CSDDD by one year. The directive was published in the Official Jour- nal of the European Union on April 16, 2025. Euro- pean Member States were asked to transpose the legal text by Dec. 31, 2025, to be effective for the 2025 reporting period. An up-to-date transposition tracker by Member State is available here. Given that Wave 1 entities were not included in the Stop-the-Clock directive, on July 11, 2025, the EC adopted, through a delegated act, the so-called "quick fix" amendments to the European Sustain- ability Reporting Standards (ESRS), allowing such legal entities to maintain, and even reduce, the level of reporting applied in 2024 for 2025 and 2026 reporting by: 1. Extending certain transitional provisions applicable to the first and second year of reporting. 2. In certain cases, providing additional report- ing relief. The delegated act was published in the Official Journal and entered into force in November 2025. In a parallel process, the European Financial Reporting Advisory Group (EFRAG) was tasked by the EC with the simplification of European Sustain- ability Reporting Standards (ESRS), with an impact on Double Materiality Assessment (DMA) require- ments under CSRD (Figure 2). A DMA is critical because it requires companies to analyze how sustainability issues affect their business (financial materiality) and how their oper- ations impact people and the environment (impact materiality). This dual perspective is essential for compliance, strategic decision-making, risk man- agement, and building trust with stakeholders. The Evolve sustainability program at the Global Elec- Figure 2: The current estimate of a simplified ESRS implementation timeline.