Under the top-down promotion of the public sector, China has been able to issue carbon neutral bonds, and its market is rapidly developing. A regulatory system covering the scope of carbon neutral bond types, fund uses, market transactions, and benefit management has also been formed around the market. However, due to the lag and one sidedness of institutional construction in aligning with international institutional standards, the existing carbon neutral bond regulatory system faces a series of practical obstacles such as scattered regulatory content, high entry thresholds, insufficient mandatory requirements, lack of quantitative standards, and inadequate environmental risk control. The ESG investment rating system that has emerged in recent years is guided by the unity of environmental and economic benefits, quantifiable environmental and social indicators, and the construction of a compliance framework by multiple entities. It is highly compatible with the legal regulation of carbon neutral bonds, and can effectively address the challenges faced by the legal regulation of carbon neutral bonds through the implementation of an ESG compliance framework for social responsibility, quantitative ESG evaluation standards, and a diversified governance pattern. In the future, the legal regulation of carbon neutral bonds in China should adhere to the path of integrating into the ESG system, and follow the idea of balancing environmental and economic risks, achieving unified quantification of carbon emission benefits, and creating a diversified governance pattern. A new legal regulation system for carbon neutral bonds should be formed, including a standardized use of raised funds based on climate coefficient, project evaluation and screening rules based on issuer compliance, a quantitative information disclosure and rating mechanism adopting mandatory disclosure mode, and a project fund supervision framework of diversified subject governance, to support the further development of carbon neutral bonds in China.