Business Model Innovation for Strong Sustainability: Conceptualizing Degrowth Value Creation in the Dutch Fashion Industry

What the paper says

Purpose: Overconsumption and overproduction in the fashion industry have detrimental impacts on the environment and society. A radical transition of the industry is required to eliminate the impact generated by years of exploiting the Earth’s finite resources while ignoring planetary boundaries. A degrowth transition entails an equitable downscaling of production and consumption in the Global North to increase human well-being and enhance environmental conditions. This article aims to generate an empirical understanding of conceptualizing degrowth in business models, with an emphasis on how value is created in the examined companies and to bridge the gap between two research fields: degrowth and business model innovation for strong sustainability. Design/Methodology/Approach: Our qualitative study investigates how 12 selected companies in the Dutch fashion industry conceptualize degrowth in their business models to create value. Findings: Our results reveal that profit distribution is de-emphasized and that prioritizing social, ecological, and economic value while promoting growth in size and revenue allows these companies to outperform unsustainable competition. Consequently, we found that the examined companies create degrowth value through quality growth. Value maintaining is achieved by reducing resource use and output within production, combined with designing for durability, repairability, and longevity in clothing. The examined companies also share value by collaborating in the exchange of physical resources, knowledge, and skills to facilitate a sustainability transition in the industry. In terms of value unlocking, the companies operationalize degrowth while operating as sustainability influencers and demonstrating transparency regarding the sustainability of their operations and products. Originality/Value: Our study contributes to a practical understanding of sustainable business models that support degrowth-oriented value creation in for-profit fashion companies. Conceptually, the findings highlight key degrowth principles employed by these businesses—such as leveraging sustainability influencers, maintaining transparency about the sustainability of operations and products, assuming responsibility for post-consumer product management, and ensuring fair value distribution. These principles are then linked to value functions that drive sustainable value creation. Finally, this study enriches the existing literature by offering empirical insights into how degrowth principles are implemented at the organizational level.