Regulatory Review: July 2026

Research evidence excerpt

Regulatory Review: July 2026

Foundation

July 28, 2026 03:30 PM GMT

Morgan Stanley & Co. International plc+MSustainability | Europe Rachel Fletcher, Ph.D.

Equity Strategist

Regulatory Review: July 2026 Rachel.Fletcher@morganstanley.comArushi Agarwal, CFA +44 20 7677-4089

Arushi.Agarwal1@morganstanley.com +44 20 7677-3944

In this monthly Regulatory Review, we highlight key Morgan Stanley & Co. LLC

developments in European environmental and social regulation Stephen C Byrd

and answer investor FAQs. In this edition: the EU AI Act, ETS EquityStephen.Byrd@morganstanley.comAnalyst +1 212 761-3865

Review, Electrification Action Plan, EU Methane Regulation, Morgan Stanley Asia Limited+

ESPR and SFDR 2.0. Ehsernta Fu

Ehsernta.Fu@morganstanley.com +852 3963-3711MThere have been a number of developments in EU sustainability regulation this Morgan Stanley & Co. International plc+

month. In this month's Regulatory Review, we provide an update on the EU AI Act, Robert Pulleyn

Equity Analyst and Commodity Strategist

outlining the new transparency requirements that will come into force from August. Robert.Pulleyn@morganstanley.com +44 20 7425-4388

We also summarise our key takeaways from the EU Emissions Trading System

(ETS) review and the Electrification Action Plan, both of which were announced on

17 July. Overall, we see the ETS review as positive for green capital allocation in

Europe and although the targets outlined in the Electrification Action Plan appear

difficult to achieve, our Utilities analysts see the ambitions as positive for European

Utilities. In addition, we note proposed changes to the EU Methane Regulation,

which would grant more leeway to importers of oil, gas and coal by postponing

penalties for non-compliance by three years, as well as progress with the Ecodesign