In a world facing environmental transformation, mobilising the capital, skills, and knowledge required for decarbonisation and wider sustainability remains a formidable challenge. We argue that Green Global Value Chains (GGVCs)-and the Green Foreign Direct Investment (GFDI) that helps to build and reconfigure them-are central to this shift and can support sustainable development across a fragmented spatial economy. We advance the concept of environmental upgrading, showing how participation in GGVCs can move firms, regions, and countries towards cleaner production and higher-value activities while reshaping natural capital. This work has three aims. First, it offers a unified conceptual perspective on how GVCs shape environmental and development outcomes, introducing the Green Smile Curve and a typology of green, brown, and ordinary value chains. Second, it provides new empirical evidence on the geography of GFDI. Third, it proposes a GGVCs-sensitive policy framework-centred on building, embedding, and reshaping value chains-to help governments leverage GGVCs. This title is also available as Open Access on Cambridge Core.