Do venture capital investments contribute to the achievement of the sustainable development goals?

Achieving the goals of the 2030 agenda for sustainable development requires substantial investment and depends on the ability to attract private capital to complement public resources. Venture Capital (VC) investments have traditionally focused on sectors such as technology, healthcare, and clean energy, which align closely with the enhancement of sustainable development, and VC investors can accelerate progress toward sustainability by providing expertise and mentorship to startups working on sustainable solutions. This study aims to contribute to the literature on the intersection between finance and sustainability by investigating whether higher VC investments are associated with a higher level of achievement of the Sustainable Development Goals (SDGs). Using a panel data fixed effect model on a sample covering more than 100 countries, we find that a higher level of VC activity is associated with stronger SDGs' performances, with this effect being primarily driven by economic factors. We document heterogeneous effects related to the round of investments as well as the organizational form of VC investors and the industry and country of the VC-backed companies.