A Transatlantic Comparison and the Case for a Global Framework

This thesis explores the regulatory frameworks governing green bonds in the European Union (EU) and the United States (US), with a focus on their approaches to mitigate greenwashing. As sustainable finance continues to grow, green bonds have become key instruments for channeling investments into green projects. However, the absence of clear legal definitions and applicable standards in both jurisdictions raises concerns about the veracity and substantiation of environmental claims made by issuers of these bonds, as well as making it difficult to hold issuers legally accountable in cases of greenwashing. In this context, another significant issue emerges: the lack of specific legal frameworks, which compromises the application of targeted sanctions, undermines contractual certainty, and reduces the likelihood of compensation for misled or harmed investors. This legal mismatch creates regulatory blind spots and weakens market discipline, as greenwashing often involves complex and technical misrepresentations that are not easily addressed under general anti-fraud provisions. The study analyzes European voluntary standards for green bonds and US reliance on general securities law and voluntary principles, as well as the broader legal context of sustainable finance regulation, identifying gaps in coordination, challenges in enforcement and the limited effectiveness of reputational mechanisms. In addition, the thesis addresses the feasibility and benefits of a unified global regulatory model for green bonds. The ultimate goal is to reflect on what an ideal model would entail. The study concludes that only a balanced combination of legal clarity, enforceable mechanisms and international coordination can effectively deal with greenwashing in this evolving market. Although there is still a long way to go, significant progress, especially in EU, lies a solid foundation for future advances. Regarding the possibility of an international regulatory model, its implementation remains complex and requires a careful balance between diverse legal and economic systems.