First of all, work will continue throughout the year on materials whose drafts were submitted for public consultation in December and January. During the summer and autumn, changes will be made to the drafts LSME and VSME standards for small and medium-sized enterprises. Their final versions will be submitted to the European Commission in November 2024 (LSME) and January 2025 (VSME). Three sets of guidelines (on materiality testing, the value chain and the list of data points) will be modified and finally published as early as May 2024. However, the changes will be minor, although I hope that the guidelines on materiality testing will directly and unequivocally address the need to use the TCFD-recommended LEAP approach to determine material environmental issues.
The next four months will also be devoted to work on drafts of the first sector standards. Three standards (SEC1 containing the classification of all sectors and standards for the oil & gas industry and for mining, quarrying and coal mining) will be drafted as exposure drafts at the end of July 2024. Similar drafts for the road transport and textile sectors will be created by January 2025. These two sets containing a total of five drafts will be submitted for public consultation in two rounds or in one. The goal is to refine them into their final form by November 2025 and submit them to the European Commission. At the same time, work will also be carried out on a draft standard for financial institutions, but its exposure draft is not expected to be ready until December 2025.
EFRAG will also work on further implementation guidelines. Seven such documents are currently planned (in addition to the three I mentioned earlier). This number will consist of three larger implementation guidance documents: on transformational plans, on the approach to the issue of employee training and education, and on the mapping of individual disclosure requirements to the sustainability issues included in AR16 in ESRS 1. These three documents will be issued in July (AR16), October (training and education) and December 2024 (transformational plans), respectively. The remaining four implementation guidance documents will be very short documents, addressing the following issues: the approach to GHG emissions reporting by pension funds, guarantees of origin and other certificates for purchased energy, water storage and raw material use issues. All four documents are expected to be issued at the end of July 2024.
As early as April 2024, we can expect EFRAG to issue mappings of indicators from the ESRS standards to the ISSB-issued S1 and S2 standards and to the GRI standards. In May, we should receive mappings to the TNFD Recommendations, and in June to EMAS requirements.
Once the XBRL taxonomy has been consulted, changes will be made to it, and the final version will be published by EFRAG in July 2024. This, however, will not yet be the binding version. The custodian of the ESEF standard, the format for tagged annual reports, is ESMA, which has to carry out its work and then submit a draft to the European Commission. Looking at the work calendar, I expect that all EU institutions involved in the process will not make it before the end of 2024, and the obligation to tag reports itself will only apply to subsequent reporting cycles.
Meanwhile, work will also continue on a reporting standard for companies based outside the European Union. Sustainability Reporting TEG and the Sustainability Reporting Board will also work on answering the Q&A mechanism, where companies, auditors and other interested parties are already asking hundreds of questions about the application of the standards. It's all a lot of work, but slowly our EU sustainability reporting system is solidifying and becoming more complete.
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