ESG Today writes that the EU Commission's proposal would force companies to identify any possible human rights violations within the activity, whether direct or through the value chain.

Evaluating the climate impact of the economic activity will also be required, as well as addressing climate change issues.

According to officials, the new rules are set to apply first to companies which have over 500 employees and over 150 million euros in revenue. At a later date, the requirements will also include companies with at least 250 employees and 40 million euros in revenue.

Also, non-EU companies that surpass the revenue limits written above within the European Union will also have to comply.

To ensure that companies will follow the rules, EU officials also mentioned the inclusion of sanctions and supervisory mechanisms. Among those sanctions are taking goods manufactured by offenders off the market and also fines as high as 5% of the global revenue for EU companies.