2025, Vol. 6, Special Issue 2

Green bonds have emerged as a key financial instrument to drive investment in environmentally sustainable projects worldwide. These bonds provide a mechanism for raising capital specifically for projects that contribute to climate change mitigation, renewable energy, sustainable agriculture, and other environmentally beneficial activities. However, the development of green bond markets is heavily influenced by the legal frameworks that govern them. A robust legal framework is essential to ensure transparency, prevent green washing, and foster investor confidence.

Globally, green bond issuance is shaped by varying regulatory approaches. In Europe, the European Union’s Green Bond Standard and the EU Taxonomy Regulation are instrumental in providing clear guidelines on what constitutes a "green" project. In the United States, the Securities and Exchange Commission (SEC) plays a pivotal role in ensuring the proper disclosure and certification of green bonds. Additionally, international initiatives, such as the Green Bond Principles (GBP) established by the International Capital Market Association (ICMA), provide voluntary guidelines to ensure the integrity of green bond issuance.

Despite these efforts, discrepancies in national regulations and the lack of a unified international standard pose challenges to the green bond market. As countries develop their own legal frameworks, differences in tax incentives, reporting requirements, and verification procedures can lead to inefficiencies and reduce the attractiveness of green bonds for global investors.

This paper explores the diverse legal frameworks supporting green bond issuance in global markets, examining their strengths, weaknesses, and the potential for harmonization. By identifying key regulatory trends, it aims to provide insights into how legal frameworks can enhance the credibility and growth of the green bond market, ultimately contributing to global environmental goals.