Aligning Investment With Impact: Exploring Social Impact Bonds in Emerging Markets for Sustainable Development

Abstract

This article explores investor motivations and the contribution to sustainable development goals of social impact bonds (SIBs) in emerging markets. Through qualitative analysis of in-depth stakeholder interviews, we identified that SIB investors are primarily driven by organisational learning, social impact generation and strategic alignment with core business objectives rather than financial returns. Our findings reveal that SIBs offer a pathway for achieving corporate social responsibility (CSR) and environmental, social and governance (ESG) objectives by blending private investment with public goals. Drawing on signalling theory, we exhibit how SIBs serve as credible signals of institutional commitment to sustainable development. The study contributes to the literature by identifying the role of SIBs in fostering public–private partnerships via signalling and investors' approaches to environmental and social challenges in emerging economies. This research expands our understanding of SIBs' potential within the CSR and ESG framework and proposes practical implications for businesses seeking to enhance their sustainability impact.