On 15 July, the European Parliament's Committee on Economic and Monetary Affairs will vote on its own position on the revision of the Sustainable Finance Disclosure Regulation. The vote matters for one central reason: the Parliament's position will define its mandate going into trilogue negotiations with the EU Council and the Commission, which are expected to begin in the autumn. Whatever ECON decides becomes the Parliament's negotiating floor.
Three outcomes will determine the significance of the vote for sustainable fund labelling. First and most critical: does the Parliament reinstate the Commission's proposed exclusion of fossil fuel expansion from the transition category? If it does, there is a genuine tension with the Council's position to resolve in trilogue — one that could go either way. If the Parliament adopts a position closer to the Council's, the fossil fuel exclusion is effectively gone. Second: does the Parliament tighten or loosen the eligibility criteria for the transition label beyond the capex and Scope 1–2 conditions the Council has set? A tighter Parliament position on Scope 3 would be a significant counterweight. Third: does the Parliament introduce any additional safeguards for ESG basics, the third and lowest-tier category, to prevent it from becoming a catch-all label with minimal requirements?
For sustainable fund managers, the summer following the ECON vote is the window in which to stress-test fund labelling assumptions against both the Council and Parliament positions. Final text will not arrive before the end of 2026 at the earliest — but the direction will be clear by mid-July.
Sources: EU Council SFDR 2.0 position — Forbes Council press release