Abstract:

Business students increasingly need to understand how law can assist business leaders in making better business decisions. Real life case studies are an excellent way to help students think critically about how businesses use legal strategies in their operations. A growing body of research shows that the use of proactive law approaches focused on long-term sustainability creates value and sustained competitive advantages for companies.

An important proactive legal strategy for many companies involves the use of trademarks and certification marks to engage with and inform customers. Consumers, especially Generation Z, are a major driver in the adoption of more sustainable business models and it is important to understand how trademarks and certification marks operate to influence their decision-making about sustainability. The authors’ research is focused on understanding how some of the most sustainable small and medium sized (SME) textiles companies in Finland use trademarks and IP law to create sustainable operations and how these efforts will be affected by new EU regulations.

The EU has acknowledged the vital importance of reforming the textile industry to make it more sustainable. The EU Circular Economy Action Plan says textiles are the fourth highest-pressure category for the use of primary raw materials and water and less than 1% of textiles are recycled. It wants to “empower[] business and private consumers to choose sustainable textiles.” A proposed Directive on Corporate Social Responsibility Due Diligence (DCS) and Product Environmental Footprint label laws (PEF laws) are part of achieving this goal. Both EU proposals have been criticized. The DCS, like many sustainability initiatives in the textiles industry, has been dominated by multinational corporations (MNCs) who have helped shape it. Many NGOs feel its standards are too weak, and corporations can avoid them too easily. The non-profit coalition, Make the Label Count, says that the PEF methodology to measure a garment’s sustainability “downplays or excludes critical environmental impacts and does not reflect the EU’s own sustainability and circularity goals.”

The authors are creating case studies on several Finnish SMEs in the textile industry that are already operating in a sustainable manner. These case studies will be used to help students understand, discuss, and develop ideas about the complexity of operating sustainably. The case studies are intended to illustrate the interplay between the Finnish companies’ proactive law strategies, the role of trademarks and certification marks in the textiles industry, and the effect of EU proposals like the DCS and PEF labelling. The case studies will help students understand the many considerations in creating the conditions for sustainable operation. How these case studies will create “teachable moments” and guide student learning on multiple topics related to business and legal strategy will be discussed in the paper.

Keywords:

Proactive law, intellectual property, trademarks, case study, case method, sustainability, textiles, EU laws, Circular Economy, Corporate Social Responsibility.