Criterion 4: Democratic governance

5.4.1. Current state of business models and most important gaps

The average score of criterion two was 1.53, one firm (LOKI) achieved the maximum score of four points (see Table 11). The reason why LOKI scored high is due to the fact that they consciously have chosen a local supplier and from the beginning partnered up with a service that monitored their data, benchmarked it and transparently shared this with stakeholders. The reason why otherwise sustainable driven firms scored low on transparency is due to the fact that they see monitoring and sharing sustainability data as secondary: first they want to grow their product. Even Hells Angels, started in 1977, released only this year their first ESG report, indicating that transparency in the fashion industry is underdeveloped.

The second criteria was not spoken a lot naturally during the interview, thus leading to a lack of significant empirical results. The assumption could be made that the more

sustainable brands would promote and motivate work that shares the company values, but this data could not be confirmed through other, publicly available sources. Yet it is interesting that this was not a ‘naturally’ subject often spoken about. A preliminary reason for this might be the growth paradigm and the fact that managers do not have a clear focus on ‘motivating employees’ to contribute to the ‘happiness’ that is so central to the theory of degrowth, since it is not the way internal business success is measured. In total, seven firms scored ‘not enough data’. Flower did not have any employees, therefore the score ‘not relevant’ was given. The other six firms scored 1.8 on average, which is still low, indicating that this is not a heavily adapted operationalization. Most mentioned being stimulated to take the train or cycle. Most memorable, Forecasted Fashion stated that they actively involve employees in AI, science, environmental projects and in recycling projects, like using coffee grounds to grow mushrooms.

Criterion 4:

Democratic governance

Momu Golden origin

Hells Angels

Bali Acces soires

Flowe r

MAL ORY

Bam boo

LO KI

Min t

Life cycle Assessme nt Institute

Tick Foreca sted Fashio n

Aratr am

1) Transparency of financial and sustainable performance;

No No A little No Yes A little Yes Yes No Not

relevant

Yes No Yes

2) Promoting work that motivates employees to share the company's values.

Yes Not

enough data

Not enough data

A little Not relevant

Not enough data

Not enoug h data

Yes Yes Not

enough data

Not enoug h data

Yes Not

enough data

Total points 2p 0p 1p 1p 1p 1p 2p 4p 2p 0p 2p 2p 2p

Table 11. Analytical table for evaluation of the fourth criterion.

5.4.2. Analyzed challenges in relations to the fourth criterion Three challenges were analyzed in relation to the fourth criterion (see Table 12). First, the biggest challenge analyzed in relation to creating transparency was globalization.

Globalization was named as the biggest blockade for generating transparency. The Life Cycle Assessment Institute explained this issue by the following quotation; “It can even take us two years to get a certification, because it takes so long to get that information. You can't even get a lot of data. Many firms also sign a non-disclosure agreement, so then it should also be confidential [...] they want to share very little”. In combination with the fact that: “most fashion firms have a lot of collections and products, so [...] you are really talking about hundreds to thousands of suppliers”. This makes it very hard to create complete transparency throughout the supply chain when producing globally. MALORY, IRON, Flower and Golden Roots produce locally in Europe and have not mentioned any of these issues. All are without shareholders, so it might be the case that due to this they can choose to have higher costs and lower profits, since there is no need to sustain shareholder interests.

Interestingly, Aratram argued that firms 'hide behind the argument of globalization that makes transparency challenging: “It is absolutely true, because of globalization it is very difficult to dive into that chain [...] but there are quite a lot of data points accessible. If you

know if you have normal cotton or organic cotton, then the range of a t-shirt is not that big. I always think [...] start somewhere, make it transparent, see what the heatmap is and start with the greatest impact. Go back to work from there. then you can get that data more accurately over the years. There is data available, a very different quality of data than financial data because it's all electronic, but there is data available”. The true extent of this challenge is therefore unclear due to contradictory statements. Next to this, the quality of data seems important, but creating transparency on general data is, from the degrowth paradigm, always better than not generating transparency. Lastly, a tendency analyzed is that start-ups choose to only start measuring impact once they have grown. The reason for this seems to be financial investment. Yet other start-ups have implemented this from the beginning, without the presence of shareholders or investors. This raises the question as this is the only reason, or combined with the tendency to see sustainability policies still as secondary to profits.

Challenges Definition Exemplary quotations

Globalization Due to the implementation of a global supply chain, transparency has become a huge challenge.

“It is absolutely true, because of globalization it is very difficult to dive into that chain and everyone is taking their hands off the responsibility.”

Quality of data The quality of data is often low due to globalization and complex supply chains to keep costs down.

“But I can imagine how messy it is [...] and you had to play with all this information, it could be so much, too much data.”

Profit before transparency

The tendency to see sustainability transparency as a secondary to (financial) growth, partly due to financial investment.

“Now the money is spent to make more products […] So that's the focus now […] But sustainability policies will eventually happen as we grow.” “We will invest in these things after we have grown more”

Table 12. Analytical table for challenges to the fourth criterion.

5.4.3. Possible solutions for challenges in relation to the fourth criterion Based on the interviews, two solutions were mentioned that could contribute to overcoming the above stated challenges. The first solution is to produce locally, which is also in line with the degrowth paradigm. Secondly, the data showed that even though globalization is a challenge, it cannot be a justification of a lack of transparency in this day and age, due to technological innovations. In the interviews multiple partners were referred to, for example

Eco Chain, Tex.tracer, showing that working together with platforms can lead to growing transparency. Yet huge firms such as Hells Angels still seemingly use excel sheets globally, which might explain why they struggle to provide accurate data and will only release their first ESG report this year. In conclusion, technological partners can solve transparency issues enormously, but the most simple solution is clearly producing locally with trusted partners.

5.5. Criterion 5: Corporate leaders’ commitment to company values in