Throughout the third quarter, Silver monitored several regulatory and market updates that could impact investment advisers and the assets in which they invest. These stories follow some familiar trends: polarization in the U.S.; ongoing rulemaking efforts in the UK and Europe; and continued disarray in the NGO space as the impact of Republican-led anti-environmental, social and governance (ESG) efforts continues to reverberate worldwide.

While there are no simple answers and resolutions to the ongoing polarization and disarray, this article reviews trending topics and government activity, while providing recommendations to help private fund managers and registered investment advisers (RIAs) navigate the waters.

U.S. Regulatory Shifts and Political Crosswinds

In Washington, D.C., and across the States, a series of regulatory and political moves signaled how sustainability priorities remain deeply contested in the U.S. Below are the key developments we think you should be watching right now:

Trump Administration Aims to Roll Back Bedrock Climate Tool

The U.S. Environmental Protection Agency (EPA) has proposed rescinding its own 2009 “endangerment finding,” which concluded that greenhouse gases (GHGs) threaten public health by increasing the likelihood of heat waves and severe weather events. This finding underpins GHG emissions regulations from vehicles, power plants and other sources. The EPA’s proposal argues the finding was “unduly pessimistic,” and highlights potential benefits of warming, such as longer growing seasons. The proposal must undergo public comment and will almost certainly face court challenges.

Silver’s Take:

This proposal illustrates the EPA’s current stance on environmental regulation and, if rescinded, will likely be used to challenge existing emissions regulations and weaken future efforts related to environmental policy.

Texas ESG Proxy Adviser Rule Halted in Court

On June 20, the Texas State Legislature passed SB 2337, a law that requires proxy advisory firms to disclose when their recommendations are influenced by ESG; diversity, equity and inclusion (DEI); or other non-financial factors, and to identify when materially different recommendations are given to different clients. The law, initially set to have taken effect on September 1, was immediately challenged on First Amendment grounds by major proxy advisors Glass Lewis and ISS. On August 29, a federal judge granted a temporary injunction blocking the law’s enforcement against Glass Lewis and ISS. Importantly, other proxy advisors not involved in the lawsuit remain subject to the law and are required to publish disclosures accordingly. A trial on the matter is scheduled for February 2026.

Silver’s Take:

Silver will continue monitoring updates on this case, as it may have significant repercussions for proxy advisory firms and their clients.

Department of Justice Issues DEI Guidance for Recipients of Federal Funding

On July 30, the U.S. Department of Justice issued guidance clarifying that Federal funding recipients must avoid unlawful discrimination, including within DEI programs. The guidance highlighted legal risks tied to race-based scholarships; geographically-targeted recruiting tied to racial composition; and contracting policies that prioritize women-owned businesses over other qualified alternatives.

Silver’s Take:

All recipients of federal funding should assess their DEI-related efforts and commitments to ensure alignment with this guidance, amidst broader Federal pushback against these programs.

Democrats Push Asset Managers to Reaffirm Commitment to Managing Climate Risks

Political polarization over fiduciary duty and sustainability further intensified during the third quarter. On August 15, a coalition of Democratic state financial officials representing $3 trillion in pension fund assets urged major managers, including Vanguard, State Street, JPMorgan, Fidelity and Goldman Sachs, to reaffirm their commitment to managing long-term risks such as climate change, governance and supply chain resilience. Organized under “Americans for Responsible Growth,” the letter directly countered a July statement from Republican officials discouraging net-zero commitments and ESG-aligned frameworks.

Silver’s Take:

Managers who are recipients of state pension fund allocations should continue to monitor investor expectations. In cases where managers are exposed to both blue and red state investors, ensuring consistent disclosure of sustainability practices is paramount.

Trump Uses Tariffs to Encourage Nations to Retreat from Climate Goals

The Trump administration is expanding efforts to promote fossil fuels abroad by using tariffs, trade deals and diplomatic pressure to encourage countries to scale back climate commitments and increase oil and gas purchases from the U.S. The administration has negotiated large-scale energy purchase deals with the EU, South Korea and Japan, which may slow progress on global emissions reductions.

Silver’s Take:

This push underscores how U.S. policy choices and negotiations can disrupt international climate cooperation, adding uncertainty to the pace of the energy transition.

Updates on California’s Climate Disclosure Bill, SB 261

California’s Climate-Related Financial Risk Act (SB 261) requires in-scope companies to publish biennial reports on climate-related financial risks. The law is being implemented by the California Air Resources Board (CARB), with first reports due by January 1, 2026. CARB also recently held its second public workshop on SB 261 implementation. The session provided important updates as CARB moves toward finalizing guidance for in-scope companies ahead of the first compliance deadline. Takeaways include:

• New proposed definitions of “revenue” and “doing business in California”
• An updated timeline for finalization of outstanding definitions and scoping guidance
• Minimum reporting requirements for SB 261 (see CARB guidance)
• Introduction of an approach to annual fees for companies in scope of SB 261
• A preliminary list of entities CARB deems to be in scope of the bill which has since been released

Silver’s Take:

The throughline here is simplicity in the face of uncertainty: firms should expect continued legal tests, shifting expectations and they should prioritize clear disclosures that can withstand political and market scrutiny.

For more information on CARB’s latest proposals, please see our recent article.

Sustainability Standards Continue Evolving in the UK and EU

Across the Atlantic, regulators and other stakeholders are moving ahead with consultations, policy frameworks and other activity, in stark contrast with the U.S. landscape. Here were the highlights from the quarter:

UK Sustainability Regulation Consultations

During London Climate Action Week, the UK Government launched three consultations on its future sustainability reporting framework, including:

• UK Sustainability Reporting Standards (UK SRS): Exposure drafts largely aligned with ISSB standards, with some UK-specific amendments.
• Assurance providers: Proposals for a registration regime overseen by the new Audit, Reporting and Governance Authority.
• Transition plans: Requirements for UK-regulated financial institutions and FTSE 100 companies.

Silver’s Take:

We expect clarity regarding scope and specific requirements to be published once feedback to the consultation has been reviewed by relevant agencies. UK-based firms should be aware of potential obligations, particularly related to transition planning.

EU and U.S. Trade Agreement Likely to Impact ESG Regulations

On August 21, the EU and U.S. announced a new trade framework that includes provisions which impact compliance with key EU regulations, including the EU Deforestation Regulation (EUDR), Carbon Border Adjustment Mechanism, Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and other forced labor rules. While details remain under negotiation, the agreement could ease certain compliance obligations for U.S. companies.

Silver’s Take:

U.S.-based managers and portfolio companies should continue to keep a close eye on future policy changes related to the new trade framework. Until formal guidance is issued otherwise, Silver recommends entities in scope of these regulations continue to work toward compliance with existing regulations.

Dutch Fund PFZW Reduces BlackRock Ties over Sustainability

Dutch pension fund PFZW has dropped BlackRock as a manager of certain equity strategies due to concerns over the firm’s voting record on sustainability. The decision reflects growing pressure in the Netherlands and throughout Europe for pension funds to avoid managers that have scaled back support for climate-related resolutions, even as U.S. firms have deprioritized sustainability during the second Trump administration. Per the firm’s disclosures, BlackRock supported 2% of environmental and social proposals in 2025, down from 4% in 2024, citing concerns that many were overly prescriptive.

Silver’s Take:

Despite political pushback on ESG, major pension funds continue to view sustainability as central to long-term value and are willing to shift assets to managers and strategies that align with this view.

All in all, the pace of regulatory change in Europe shows no signs of slowing down, underscoring the need for firms to anticipate, not just react to, evolving obligations. Therefore, plotting a path forward in these uncertain times means preparing for UK Transition Plan requirements , maintaining progress under current EU rules, and aligning voting and messaging with the sustainability expectations driving allocation.

Global Standards and Industry Alliances in Flux

Alongside U.S. and European policy changes, global industry groups and initiatives faced disruption that could reshape voluntary commitments. Highlights include:

Net-Zero Banking Alliance Suspends Activities

On August 27, the Net-Zero Banking Alliance (NZBA) suspended its activities after major U.S. banks, including JPMorgan, Citi and Morgan Stanley, along with several European peers, withdrew from the alliance. Exiting organizations cited political pressure from the Trump administration and Republican state Attorneys General as key drivers for their withdrawal. Remaining members recently voted on whether to maintain the NZBA as a membership alliance, or transition to a looser “framework initiative,” with the voting results expected soon. This move mirrors the earlier suspension of the Net Zero Asset Managers initiative and raises concerns about reduced transparency on climate risk and fossil fuel financing.

Silver’s Take:

We recommend undertaking an annual review of all sustainability-related affiliations to ensure membership remains relevant and aligned with the firm’s internal goals.

SBTi Introduces Financial Institutions Net-Zero Standard

On July 22, the Science Based Targets Initiative (SBTi) released the Financial Institutions Net-Zero (FINZ) Standard, providing framework for banks and investors to set net zero-aligned targets. The standard requires financial institutions to commit to net zero by 2050; end financing for new fossil fuel projects; phase out expansion support by 2030; and adopt deforestation and real estate policies. Institutions must also provide annual public reporting on emissions and sector exposures.

Silver’s Take:

Firms with preexisting net zero targets should review the new FINZ Standard to ensure continued alignment with industry best practices, as expectations for target setting continue to rise.

State Backlash against SBTi and CDP

On August 5, the Florida Attorney General announced an investigation into the Carbon Disclosure Project (CDP) and SBTi, issuing subpoenas to both organizations, referring to them as a “climate cartel,” and alleging potential consumer protection and antitrust violations. Days later, twenty-three Republican Attorneys General raised similar concerns over the FINZ Standard (discussed above), warning it could restrict financing for the energy sector and expose firms to legal risks if net zero goals prove unattainable.

Silver’s Take:

Silver will continue monitoring the investigations into SBTi and CDP and firms that report to, or align with, these standards should continue to monitor these developments.

Overall, this quarter’s global developments highlighted the importance of aligning stated commitments with internal policies and public disclosures. Firms should complete a structured assessment against the FINZ Standard, confirm fossil-fuel financing positions and timelines, and document any remediation steps to maintain clarity and credibility with investors and regulators.

Additional Policy Signals from Q3

Beyond the headline actions covered above, EU institutions and European policymakers advanced several items that could shape the next wave of sustainability rules and implementation. Below is a quick scan of what’s percolating and why it matters now:

• Building the Environmental Omnibus – the European Commission’s July 22 Call for Evidence
• EU Lawmakers Reject EUDR’s Country Risk System in New Setback to Deforestation Regulation
• EU Ombudsman Challenges Commission Over Sustainability Rollback Process
• EU Launches Consultation on Upcoming Circular Economy Regulation

Viewed together, these signals underscore a clear theme: momentum with turbulence. For private fund managers and RIAs, that makes year-end preparation all the more critical.

Responsible Investment Housekeeping for Remainder of 2025 and Beyond

As we move into the fourth quarter, Silver’s SRS team will engage with clients to ensure that annual sustainability obligations have been met and that clients are prepared for a hectic 2026 first quarter. Some key questions to consider before the New Year include:

• Has your sustainability policy been reviewed and/or updated?

• Have you conducted requisite training on responsible investment, climate or other topics?

• Have you completed obligatory reporting requirements?

• Have you reviewed commitments made to investors and ensured progress has been made to meet those commitments?

• Are you prepared for 2026 reporting obligations, including those related to SFDR, TCFD and/or EDCI?

• Have you reviewed marketing materials to ensure ongoing alignment with current practices and investor expectations?

• If you are a PRI Signatory, do you have a plan for 2026 reporting amidst PRI’s upcoming Pathways initiative?

• Are your investments prepared for upcoming regulatory obligations (e.g., CA SB 261)?

• Are you and your portfolio companies prepared to produce data in line with upcoming regulatory obligations, including CA SB 261 and CSRD?

Collectively, this quarter points to momentum amid turbulence across U.S., UK/EU and global initiatives. A brief, documented, year-end check on policies, training, disclosures, and 2026 reporting readiness will turn awareness into execution. For help on the above questions and other topics, please contact the Silver SRS Team at [email protected] to learn how we can help and for more information on our ESG services.