International companies operating in the European Union face huge fines, increased lawsuits and new compliance costs from legislation adopted last month that targets environmental and human rights breaches in corporate supply chains, lawyers say.

The EU Corporate Sustainability Due Diligence Directive, known as the CS3D and approved late last month, requires big EU companies as well as certain non-EU companies and franchises with sales in the EU to ensure their operations and those of their subsidiaries and supply chain business partners comply with EU rules on the environment and human rights.