Understanding SBTi FLAG Guidance for Land-Use Sector

Emma Valli

Marketing Coordinator

At end of 2023, SBTi (Science Based Targets initiative) released a FLAG (Forest, Land, and Agriculture) guidance for companies operating in the land-use sector. With these guidelines, companies employing over 500 people can set more precise climate targets. They can also plan efficient emission reduction measures specifically concerning land use.

SBTi in a nutshell

Companies set science-based emission reduction targets as part of the Science Based Targets initiative, which aims to limit climate warming to the 1.5-degree Celsius threshold outlined in the Paris Agreement.

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Who should set FLAG targets?

SBTi has defined that the FLAG guidance applies to those companies whose supply chain emissions in the land-use sector are significant. This includes, among others:

Agricultural companies
Food and beverage industry companies
Retailers
Forest and paper industry companies

FLAG guidelines are targeted at large companies employing over 500 people. Small and medium-sized enterprises can set emission targets within SBTi using lighter guidelines.

If you work in a qualifying company and your company is setting SBTi targets for the first time, you should also set FLAG targets.

However, your company might have set SBTi targets before the publication of FLAG guidelines on March 30, 2023. In that case the FLAG targets should be added 6 months after GHG protocol’s publish the LSR (Land Sector and Removals) guidance (expected mid 2024).

What do FLAG guidelines cover?

When setting SBTi and FLAG targets, you should have the tools and expertise to conduct emission calculations according to the GHG protocol to set target levels and track progress.

GHG Protocol has released a draft guidance for land sector and removals (LSR) calculations, which is expected to be published in 2024.

Already in the FLAG guidance, it is stated that for setting and monitoring targets, companies need to calculate and differentiate:

Land use emissions
Land use change emissions
Carbon removals.

You can start calculations using general emission factors and averages, especially in complex supply chains where readily available data is essential. However, SBTi wants companies to provide sufficiently accurate data, so it’s worth preparing to collect primary data.

How are FLAG targets set?

When setting emission targets, you can choose one or a combination of the following two paths:

Sector pathway

This option requires an absolute reduction of FLAG emissions by 30.3% by 2030. It’s a challenging path for growing companies as emissions are not tied to revenue. The path is suitable for companies with complex supply chains.

Commodity pathway

Used by companies where over 10% of emissions come from the following commodities: beef, poultry, milk, leather, maize, palm oil, pork, rice, soy, wheat, and timber or pulp.

In this option, emissions are calculated by commodity and compared to the global average and its trend.

The requirements for setting FLAG targets are as follows:

Set short-term (5-10 years) emission reduction targets aligned with the 1.5-degree Celsius goal of the Paris Agreement.
Consider removals in short-term targets: Biogenic CO2 removals include activities such as restoring natural ecosystems, improving forest management practices, introducing forest grazing, and enhancing carbon sequestration in pasture and cropland areas.
Set long-term targets: Companies operating in the land-use sector must reduce at least 72% of emissions by 2050. Targets are set using the SBTi Net-Zero standard.
Zero deforestation goals must be set by 2025 and must be aligned with The Accountability Framework initiative.
Set science-based targets for fossil emissions: Companies producing emissions from land use must set FLAG targets AND science-based targets for energy/industry because all companies produce fossil emissions.

How can Biocode help?

Biocode is a versatile carbon footprint calculator that separates biogenic emissions from fossil emissions and calculates the effects of land use on emissions. Its primary production tools allow for the calculation of agricultural emissions on a producer and field block basis.

With Biocode, you can also calculate the CO2 removals achieved by your operations. You can also calculate carbon sequestration with the primary production tools. And use the results in your company-specific emissions calculations.

For land-use change calculations, you have a team of professionals specialized in calculating and reporting emissions, especially in the food industry.

Biocode incorporates GHG Protocol standardized calculation guidelines that companies follow when reporting the progress of SBTi targets. We will update the calculator after the release of new LSR calculation guidelines. This way our customers can use the tool to calculate their emissions as part of science-based emission reduction targets.

Like target tracking, Biocode is a continuous calculation tool, the costs of which do not grow too high.