Legal regulation of green and sustainable bonds (SUKUK) A case study of the Saudi capital market authority

This paper deals with a very sensitive topic with several legal, economic, and other consequences, which is the legal regulation of green bonds (Sukuk) in Saudi Arabia.The paper analyzes the legal instructions for issuing green, social, and sustainable bonds.The guide issuing these bonds, which was prepared under the supervision of the Saudi Capital Market Authority to regulate the issuance of these bonds, consider as the legal basis for their issuance.However, the guide is not mandatory, as it is described as an advisory guide.Issuers are required to specify the areas of non-compliance if they fail to adhere to any of its provisions, without specifying a particular penalty for non-compliance.The flexibility adopted by the guide in issuing these bonds likely stems from their recent introduction and the desire to encourage companies to issue green, social, and sustainable bonds.This also supports the private sector in achieving Saudi Arabia's "Zero Carbon" Initiative, one of the initiatives of " Saudi Vision 2030", which aims to achieve netzero carbon emissions by 2060.The paper recommends several measures, including a gradual transition to making the guide's provisions mandatory, as well as the issuance of regulations.The guide includes penalties for violating the provisions governing the issuance of green, social, and sustainable bonds.