The European Parliament's Economic and Monetary Affairs Committee (ECON) voted on September 10, 2026 to adopt its negotiating position on the Sustainable Finance Disclosure Regulation review, opening interinstitutional trilogue negotiations on procedure 2025/0361(COD). The position, drawn from the report of rapporteur Gerben-Jan Gerbrandy (Renew), amends Regulation (EU) 2019/2088 and the PRIIPs key information document rules, and moves the EU fund disclosure regime from the binary Article 8 and Article 9 split to three named categories: Sustainable, Transition, and ESG Basics.
For asset managers and distributors across the bloc, the vote fixes Parliament's opening bid before talks with the Council, which agreed its own general approach on June 24, 2026. Final adoption is still expected in the first quarter of 2027, but the substantive decisions, the category thresholds, the naming rules, and the fossil-fuel gate for the Transition label, now sit on the trilogue table.
What replaces Article 8 and Article 9 funds?
The Commission's November 2025 proposal, COM(2025) 841, replaces the Article 8 and Article 9 dichotomy that fund managers have used since March 2021 with three product categories. Sustainable funds must allocate a high share of investments to environmentally sustainable activities under the EU Taxonomy. Transition covers products that finance the shift but do not yet meet the Sustainable bar. ESG Basics applies to funds that consider sustainability factors without making a sustainability claim, replacing the former loose Article 8 light-green bucket that the European Supervisory Authorities and the Platform on Sustainable Finance had flagged as a greenwashing magnet.
Each category carries its own naming and disclosure rules. A fund using ESG or sustainability-related terms in its name will still need to meet the ESMA 80 percent minimum sustainable investments threshold. The category a fund lands in determines the level of pre-contractual, periodic, and website disclosure, replacing the current layered regulatory technical standards templates with category-specific obligations.
What is the Transition category fossil-fuel test?
Parliament's most consequential addition is a fossil-fuel test for the Transition category that goes beyond the Council's June mandate. To use the Transition label, a fund must direct more capital into sustainable activities than into new fossil-fuel projects, and at least 20 percent of its capital expenditure must be Taxonomy-aligned. The ECON position keeps the test stricter than the Council's, which industry groups had lobbied to soften.
The mechanism matters because Transition is the category most existing Article 8 funds will migrate into. Managers with diversified portfolios that still hold oil, gas, and utility incumbents must now show that their green capital deployment exceeds new fossil allocation, a quantitative test rather than a narrative disclosure. Funds that cannot meet it fall to ESG Basics and lose the ability to market themselves as transition-oriented.
Who must act, and what is the timeline?
The change reaches every EU financial market participant: asset managers (Amundi, BNP Paribas Asset Management, DWS, Allianz Global Investors, Axa Investment Managers, Generali, Intesa Sanpaolo), insurers, and investment firms, plus non-EU managers such as BlackRock, Vanguard, Fidelity, and Schroders that distribute funds into the EU. Product, legal, and ESG disclosure teams must remap Article 8 and Article 9 books onto the three new categories, retest fund names against the naming rules, and align pre-contractual and periodic disclosure templates.
With both Parliament and Council positions on the table, trilogue talks can conclude before year-end, though the first quarter of 2027 remains the realistic adoption window. Once adopted, the regulation applies directly in every Member State, with no national transposition step, because it is a regulation under Article 288 TFEU. The PRIIPs key information document regime is amended in parallel, so PRIIPs KID templates will change alongside SFDR disclosures.
| Current SFDR classification | Proposed SFDR 2.0 category | What it requires |
|---|---|---|
| Article 9 (dark green) | Sustainable | High share of Taxonomy-aligned sustainable investments |
| Article 8 (light green, transition claim) | Transition | 20% Taxonomy-aligned capex and green-over-fossil test |
| Article 8 (light green, no claim) | ESG Basics | Considers sustainability factors, no sustainability claim |
A per-jurisdiction real-time monitoring job surfaces the moment a trilogue compromise amendment or final text publishes, so a disclosure team is never caught remapping funds after the deadline.
Subscribe to the free newsletter
What to do next: verify which of your funds sit in Article 8 versus Article 9 today and pre-map them to Sustainable, Transition, or ESG Basics. Model the Transition fossil-fuel test against current capital expenditure allocations before the trilogue compromise locks the final threshold. Brief product, legal, and marketing teams on the naming and PRIIPs KID changes, and track the trilogue schedule so the final text does not arrive unprepared. Obsidian tracks this procedure through every remaining stage, from trilogue compromise to Official Journal publication.
