What is the SBTi FLAG Guidance and why do we need it?
The SBTi’s Forest, Land and Agriculture (FLAG) Guidance is the world’s first standard developed to help companies operating in land-intensive industries set science-based targets (SBTs) to reduce greenhouse gas (GHG) emissions. It is important to note that the FLAG Guidance is a target-setting requirement, unlike the GHG Protocol which is a measurement requirement.
Representing 22% of global GHG emissions, the FLAG sector is the second largest source of emissions. However, there has has been limited guidance for SBT-setting for FLAG companies as well as companies operating in land-intensive industries. The FLAG Guidance was developed to help these companies set FLAG SBTs in line with the SBTi’s directive.
Who does it apply to?
Follow the chart below to find out if your company is required to set science-based targets according to the FLAG Guidance.
When do you need to set FLAG SBTs?
Companies will have to set FLAG science-based targets according to the FLAG Guidance either by end-2023 or end-2024.
If your company has existing near-term targets validated before 1 January 2020, you will need to set your FLAG SBTs by end-2023.
If your company has existing near-term targets validated after 1 January 2020, you will need to set your FLAG SBTs by end-2024.
Key requirements of the FLAG Guidance
Set near-term FLAG SBTs | 5-10 year emission reduction targets to limit warming to 1.5°C | |
| Account for removals in near-term FLAG SBTs | Includes land use change, land management and carbon removals |
| Set long-term FLAG SBTs | Align with the SBTi Net-Zero Standard to set long-term SBTs |
| Set zero deforestation targets by 2050 | Target to reduce at least 72% of emissions by 2050, in line with the AFi |
| Set SBTs for fossil emissions | Companies with land-based emissions need to set both FLAG SBTs and SBTs |
When setting FLAG SBTs, companies should ensure the following for SBTi compliance:
Near-term targets must cover at least 5 years and no more than 10 years from the date the target is submitted to the SBTi for official validation.
Removals and emissions must be reported separately for both baseline and annual emissions accounting.
Sub-targets must be reported with the overarching targets when aggregating FLAG targets across different commodities and/or approaches.
Long-term agriculture FLAG targets should be developed with a target year before 2050, aligned with the Net-Zero Standard. (Long-term targets for forestry are not yet available as of 2022.)
Potential mitigation activities (reductions and removals)
The mitigation opportunity of the FLAG sector includes both emission reductions and removals. More than half of the FLAG mitigation activities will occur within FLAG supply chains mentioned below. However, FLAG mitigation may also occur outside of corporate supply chains (e.g. subsistence production, community or government land management and NGO projects).
The FLAG Guidance includes a series of criteria and recommendations to ensure continued climate integrity, aligned with the other pathways developed by the SBTi.
Don’t cross streams: FLAG targets must be separate and additional to non-FLAG targets. FLAG mitigation cannot be used to meet non-FLAG targets.
Reductions and removals: FLAG Guidance requires companies to set both emissions reduction, as well as removal targets. However, carbon removals cannot be used to meet neither near-term FLAG targets.
No double counting: Reductions and removals can only be counted once. If a company sells a carbon credit on the voluntary carbon market (VCM), they cannot also count the removal or reduction within the supply chain.
Just transition: Companies should ensure climate equity and acknowledgement of carbon rights for farmers, foresters and land holders, including fair compensation for implementation of mitigation efforts.
For more information on FLAG sector emissions reductions and removals, read the article on Carbon removals in Forest, Land and Agriculture (FLAG) Pathways published by the SBTi.
How Terrascope supports the FLAG sector
Investors and consumers are becoming more discerning about climate targets and plans, and how they align with the sustainability framework outlined by the Paris Agreement. By effectively measuring, managing, and mitigating GHG emissions, companies can align their corporate sustainability strategies with the national and global sustainability goals necessary to combat climate change. This can also strengthen your business against climate-related risks as well as regulatory changes.
Terrascope’s SaaS carbon measurement and management platform can help FLAG enterprises understand and mitigate their emissions. The platform’s machine learning capability allows for faster data ingestion (when compared to the manual process) and improved data granularity - both of which can help create meaningful and sustainable change within companies as well as on the planet as a whole. Terrascope can assist the FLAG sector as well as companies with FLAG targets in the following ways -
Terrascope’s platform is able to account for and separate biogenic and non-biogenic related emissions, as well as LUC and non-LUC emissions and out-of-scope emissions.
The platform is able to visualise and separate carbon removal (tCO2e).
Not only can Terrascope identify whether companies are required to set FLAG targets based on FLAG and non-FLAG emission proportions, but it can also assist companies in setting FLAG and non-FLAG targets (i.e., by accounting for FLAG and non-FLAG emissions independently.
It can guide companies in choosing the right approach in accounting for FLAG emission (i.e., sector or commodity approach), as well as provide quantitative figures towards target reporting and validation.
Using the power of data science for speed and accuracy, the platform will be able to help companies efficiently categorise their FLAG emissions into the necessary sub-categories (LUC, Land Management CO2, and Land Management Non-CO2) for SBTi submission.
Lastly, companies can understand the emission drivers that contribute to both FLAG and Non-FLAG emissions at a high level of detail on the platform, and develop precise decarbonisation strategies to effectively support both target ambitions.
With SBTi's FLAG Guidance, companies can follow a standard for land-intensive industries to establish SBTs for reducing greenhouse gas emissions, and getting on track to meeting our net-zero goals.
Terrascope, with its advanced SaaS carbon measurement platform, can help organisations manage their data, access granular insights, and distinguish between different emission types, offering valuable support for the FLAG sector.