Everything you need to know about the new forest, land and agriculture (FLAG) Guidance
As the first standard of its kind, this guide offers an exclusive insight into everything that land-intensive businesses must know to comply with new SBTi’s latest Forest, Land and Agriculture guidance.
What is FLAG?
The Science Based Targets Initiative (SBTi) offers a standardised way for companies to support progress on halving emissions by 2030, and reaching net-zero emissions before 2050. The most recent forest, land and agriculture (FLAG) Guidance, shared by the SBTi in September 2022, is the first standard specifically designed to help land-intensive companies set science-based targets.
This guidance highlights the key role of land-intensive businesses - i.e. forest, land and agriculture (FLAG) businesses - in meeting the Paris Agreement 1.5 degree pledge, as well as growing demand for food. The land sector is expected to contribute up to 37% of the emissions reductions and removals needed by 2030, and 20% by 2050. However, this will only be achievable if businesses set ambitious targets in line with this new FLAG Guidance, and use it as a core framework for making reductions.
First things first, what do we mean by FLAG emissions?
FLAG target-setting covers emissions (and removals) up to the farm-gate. Any emissions that occur outside of this are considered non-FLAG emissions.
Land use change (the process by which humans convert land from one use to another) and land management are the main sources of FLAG emissions. Land use change might occur where land is deforested to make space for agricultural production, for example. Land management refers to “on-farm” inputs like machinery use and fertilisers, as well as waste management.
Carbon removals and storage are also included in FLAG targets. However, these can only be accounted for where removals are taking place on land owned or operated by a company or within its supply chain. Offsets cannot be used to meet near-term FLAG targets, and removals cannot be used to meet other energy/industry targets under SBTi.
Who does the FLAG guidance apply to?
- Companies in food and beverage production, processing and retailing, as well as forest and paper products, and tobacco.
- If companies across any industry produce FLAG-related emissions, and these make up more than 20% of their total emissions, they are also included in this requirement.
Small and mid-sized enterprises (SMEs) aren’t currently required to set FLAG targets.
How does this link to Scope 1, 2 and 3 emissions?
FLAG targets must cover at least 95% of a company’s FLAG-related scope 1 and 2 emissions, and 67% of FLAG-related scope 3 emissions.
A scope 3 target is required if a company’s scope 3 emissions are 40% or more of total emissions across all categories. While FLAG targets include removals, only gross emissions values (i.e. excluding removals) should be used to meet this 67% threshold.
Which approach to FLAG-target setting is most appropriate for your company?
In general, the SBTi recommends that ‘demand side’ companies (or those mid- and downstream) use the FLAG sector approach, and ‘supply side’ companies (or those upstream) use the commodity intensity approach and/or sector approach. Companies can set more than one target, such as where they produce multiple commodities.
Unless companies are associated with one or more of the listed food commodities - beef, chicken, dairy, maize, palm oil, pork, rice, soy, and wheat - accounting for 10% or more of their gross FLAG emissions, they should adopt the FLAG sector approach.
What is the FLAG sector approach?
This involves an absolute emissions reduction of 30.3% by 2030. This is based on the 2019 study by Roe et al. At a minimum, companies must achieve long-term emissions reductions of 72% by 2050.
For companies following the FLAG commodity approach, near-term emissions intensity targets have been assigned to each commodity by region (see page 45).
Why is the absolute emissions reduction target for the FLAG sector approach not 50%?
As a global average, we must halve emissions by 2030. However, different sectors will decarbonise at different rates. Significant agricultural emissions of nitrous oxide and methane are expected to persist, meaning a 50% reduction in FLAG emissions would likely not be feasible.
How can your company reduce its FLAG emissions?
According to the SBTi, land sector emissions could be reduced by:
- Stopping deforestation and land conversion (all companies setting FLAG targets must commit to no deforestation by 2025).
- Reducing peat burning and forest degradation.
- Lowering agricultural emissions.
- Reducing emissions via demand shifts, such as through diets, and food loss/waste.
Removals can also contribute to emissions reduction, such as by:
- Restoring natural ecosystems.
- Deploying silvopasture.
- Improving forest management practices.
- Enhancing soil carbon sequestration on pasture and farmland.
How can Foodsteps support your Net Zero journey?
Demand side interventions (consumer-led change) like carbon labelling represent a core part of Foodsteps’ offering, therefore companies making Net Zero commitments can use Foodsteps to encourage diet shifts among their customers. The measurement tool can also be used by SBTi companies to help highlight the FLAG emission hotspots within their product range, and identify key opportunities for reduction. On the supply side, we’re also working with producers to help them implement the lowest-impact production systems. If you'd like to find out how we can help you, contact our Onboarding Team.
