Insights for sustainable business practices: Comparative impact of independent and corporate venture capital funding on financial and environmental performance

Fatima Shuwaikh, Agathe Tanguy, Emmanuelle Dubocage and Othman Alolah

Research in International Business and Finance, 2025, vol. 73, issue PA

Abstract: This study aims to analyze the effects of venture capital (VC) financing schemes on the financial and environmental performance of their VC-backed companies. This research leverages a dataset including 325 U.S. firms between 2002 and 2022 and examines two issues of interest: independent venture capital (IVC) and corporate venture capital (CVC) funding. The results show that IVC-backed companies have significantly better environmental, social, and governance (ESG) ratings and emit fewer greenhouse gases (GHG) emissions when compared to companies backed by CVC. This highlights that the function of IVC is to improve the environmental sustainability of businesses. Together this helps provide a valuable perspective about which VC models (CVC, IVC) does have an impact on how businesses pursue sustainability practices alongside financial performance. This paper contributes to the sustainable entrepreneurship literature by focusing on the importance of funding types with performing sustainable practices.

Keywords: Corporate Venture Capital; Independent Venture Capital; Environmental Performance; Greenhouse Gas Emissions; ESG; Financial Performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:73:y:2025:i:pa:s0275531924004252

DOI: 10.1016/j.ribaf.2024.102632

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