Impact Investing and Sustainable Global Value Chains: Enabling Small and Medium Enterprises Sustainability Strategies

Abstract

Improving the sustainability of SMEs in developing and emerging economies, which represent the vast majority of the population of MNCs’ supplier networks, is fundamental to achieving the Sustainable Development Goals. However, SMEs often lack viable financing options to invest in their sustainability. Emergent impact investing seeking social, environmental, and financial returns aims to address this financing gap. How does impact investing influence sustainability in the global value chains of MNCs? Studying the nexus between impact investing and the strategies of SMEs in Latin America’s coffee and forestry sectors, I provide new insights into how the modes of financing suppliers’ production activities improve GVC sustainability.