How the SBTi FLAG standard works, who it binds, and what it asks of the agrifood industry — pathways, coverage, removals, and the no-deforestation rule.
FLAG stands for Forest, Land and Agriculture. It is the part of the Science Based Targets initiative that lets a company set a climate target for its land-related emissions and removals — the same sector climate science calls AFOLU. The land sector accounts for about 22 percent of net human-caused greenhouse gas emissions, roughly 13 billion tonnes of CO₂ equivalent a year, split about evenly between agriculture and land-use change. It is also where a large share of the cheap mitigation sits: the land sector could deliver up to about 37 percent of the emission cuts and removals needed through 2030.
For years this sector sat outside corporate target-setting. The methods and data were not there, so companies set targets on their energy and industrial emissions and left their land footprint unaddressed. Two things changed that. The SBTi published the FLAG guidance, now at Version 1.2, and the GHG Protocol released its Land Sector and Removals Standard. Together they give the agrifood industry an agreed way to measure land emissions and removals and to set a 1.5°C-aligned target against them.
Separate by design
FLAG targets are deliberately kept separate from a company’s energy and industry targets. The two cover different emissions, use different methods, and treat carbon removals differently. A company that qualifies sets a FLAG target alongside its conventional target, not instead of it.
A company must set a FLAG target if it meets either of two conditions. The first is sector-based: companies in the FLAG-designated sectors are required to set one regardless of their emissions mix. The second is a threshold that catches everyone else: any company whose land-related emissions reach 20 percent or more of its total gross emissions across scopes 1, 2 and 3.
| Required by sector | Caught by the 20% threshold |
|---|---|
| Forest and paper products (forestry, timber, pulp and paper, rubber) | Retail, packaging, hospitality and tourism |
| Food production — agricultural | Textiles, apparel, footwear and luxury goods |
| Food production — animal source | Consumer durables, household and personal products |
| Food and beverage processing | Tires, building products, construction materials |
| Food and staples retailing | Mining, infrastructure and others with land-use-change emissions |
| Tobacco | Any other company over the 20% gross-emissions threshold |
Small and medium-sized enterprises are exempt. A designated-sector company with under 5% land-related emissions need not set a FLAG target but must still account for those emissions in its conventional target.
In practice this covers most of the agrifood value chain, from the farm and the forest through the processor, the manufacturer and the retailer. A FLAG scope 3 target is required whenever a company’s total scope 3 emissions reach 40 percent or more of its footprint, which is the norm in food and consumer goods.
FLAG offers two ways to set a target, and a company can use both at once. The choice depends on how concentrated its land emissions are in a few commodities.
| Sector pathway | Commodity pathways | |
|---|---|---|
| Type | Absolute reduction on a 1.5°C trajectory | Intensity convergence — emissions per tonne of product |
| Built for | Diversified land footprints — processors, manufacturers, retailers | Footprints concentrated in specific commodities |
| Coverage | Total land emissions | 11 commodities: beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, timber & wood fiber |
| Regionalization | Global pathway | 26 regions — the same crop carries a different target by origin |
| When mandatory | Default for everything not on a commodity pathway | Any commodity ≥10% of land emissions can use it; timber & wood fiber mandatory above that level for forestry & paper |
A company uses both at once and aggregates them into a single target through the SBTi FLAG Tool.
| Rule | Requirement | Why it bites |
|---|---|---|
| Coverage | ≥95% of land-related Scope 1; ≥67% of land-related Scope 3 | Counted separately from the conventional target — a second inventory |
| Removals | Land-based removals count — reported separately from emissions | About half the land sector’s mitigation potential, but they cannot soften the required cuts |
| No-deforestation | Public commitment, 2020 cutoff, target date by end-2030 | Forces commodity traceability back to the land it came from |
The rule that reaches the supply chain
A company setting a FLAG target has to commit publicly, in fixed language on the SBTi dashboard, to ending deforestation in its main deforestation-linked commodities — cutoff date 2020 or earlier, target date within two years of submission and no later than the end of 2030. This is what turns a target into a supply-chain obligation, because it forces the company to trace its commodities back to the land they came from.
Climate Decode builds the land-sector inventory, screens the levers against the right pathway, and returns a financed plan — with removals handled separately, as the standard requires.
FLAG asks for things most agrifood companies do not yet have. The difficulty is not the target number; it is everything that has to be built before a number can be set.
Each of these is a data and analysis problem before it is a target. This is the gap between knowing a FLAG target is required and being able to set a credible one.
Stuck on the land-sector inventory? That is the part we build.
Start the Build →FLAG maps cleanly onto the levers that decarbonize agrifood, and onto the three gases that drive the sector. Land-use change is the carbon-dioxide problem, addressed by halting deforestation and restoring land. Land management is the methane and nitrous-oxide problem, addressed by better feed, productivity, manure management and efficient nitrogen. The sector pathway is built from exactly these moves — reducing land-use change, improving agriculture, restoring forests, sustainable forest management and agroforestry, building agricultural soil carbon, cutting food loss and waste, and bioenergy with carbon capture.
This is the same toolkit set out in the sector overview, now tied to a binding target. A FLAG target tells a company how far it has to go; the levers tell it how, and at what cost. The two have to be solved together, because a target with no costed plan behind it is just a number, and a plan with no target has nothing to aim at.
Setting and meeting a FLAG target is a measurement, target-setting and financing problem in sequence, which is the workflow TerraNova already runs for industrial emitters. It builds the land-sector inventory on the right basis, separating land-use change from land management and stopping at the farm gate. It screens the abatement levers against the company’s FLAG pathway, sector or commodity, and ranks them by cost and by how much of the target gap each closes. It returns a financed plan with the cost, payback and sequencing of each measure, and tracks the company’s position against the pathway year by year.
Removals are the other half of a FLAG position, and the half a conventional target cannot use. Canopy handles them: sourcing and structuring credible land-based removals, kept separate from emissions as the standard requires, so a company can build toward a long-term net-zero FLAG target without double-counting. Between the two, Climate Decode covers the whole of what FLAG asks — the inventory, the reduction plan, the removals, and the reporting that holds up to validation.
The Sector Overview · Supplier Engagement & Scope 3 · SBTi FLAG in the Nature Series
Notes and sources for the figures in this paper.
Climate Decode sets and delivers FLAG targets end to end — inventory, pathway, financed plan, removals, and validation-ready reporting.