Description
Scholarship on environmental upgrading within global value chains (GVCs) has made substantial contributions to understanding how sustainability governance reshapes supplier-buyer relations and distributes costs and benefits across supply chains. Yet a critical blindspot persists: the informal sector. Despite informal economic activity accounting for the majority of employment across the Global South and being structurally embedded within the GVCs undergoing environmental upgrading, its position within these processes remains almost entirely unexamined. This article addresses that gap through an analysis of environmental upgrading in Morocco's garment and textile industry - a sector whose competitive foundations rest on the deep structural integration of formal and informal production. Drawing on Phillips' (2011) framework of adverse incorporation and Bair and Werner's (2011) concept of disarticulation, it argues that environmental upgrading operates along three axes of formal-informal restructuring: intensifying the production of informality by redrawing formal-informal boundaries through firm expulsion and workforce casualisation; producing disarticulation for specific informal actors whose livelihoods are structured around material flows that environmental compliance reorganises; and deepening adverse incorporation for those who remain, as compliance costs travel downward through informal arrangements while governance protections do not. The findings point toward the need to place formal-informal restructuring at the centre of critical GVC scholarship on the green transition.