SBTi FLAG for Nature

What is the SBTi FLAG guidance?

The SBTi Forest, Land and Agriculture (FLAG) guidance is the part of the Science Based Targets initiative that finally puts numbers on land-sector emissions. Published in 2022 and substantially revised in 2025, it requires companies with material exposure to forest, land, or agricultural value chains to set a separate, science-aligned target for those emissions — on top of their existing energy-and-industry SBTs.

FLAG covers land use change emissions (deforestation, peatland conversion), land management emissions (fertiliser, livestock methane, soil practices), and biogenic CO₂ removals (afforestation, restoration, soil carbon). Together, AFOLU is roughly 22% of global GHG emissions and was historically excluded from corporate climate targets — FLAG closes that gap.

Who must set a FLAG target.

A company is required to set a FLAG target if either condition is true:

• More than 20% of total Scope 1+2+3 gross emissions come from FLAG sources (land use change, land management, removals on land); OR
• It operates in a designated FLAG sector (SIC-coded): forest & paper products, food production including agricultural production, food & beverage processing, food & staples retailing, and tobacco.

A consumer goods company sourcing palm oil, soy, cocoa, beef or paper in volume will almost always trip the threshold. So will retailers and QSR chains with private-label food. So will mining and infrastructure projects with land-clearing exposure.

FLAG V1.2 is tightly aligned with the GHG Protocol Land Sector and Removals Standard (January 2026) for land-use-change accounting. The Standard defines three LUC categories — direct LUC (dLUC), statistical LUC (sLUC) and indirect LUC (iLUC) — and applies a 20-year linear discounting convention so emissions from historical land conversion amortise across two decades.

No-deforestation commitment

In addition to the reduction pathway, FLAG-eligible companies must put a no-deforestation policy in place by 31 December 2025. The recommended cut-off date is 1 January 2020; FLAG V1.2 allows flexibility on the cut-off, but it must be no more than 3 years before the submission of the target. The commitment is aligned with the Accountability Framework initiative (AFi), so existing AFi commitments map across.

The no-deforestation scope is tighter than the FLAG pathway scope. It covers seven key commodities — cattle, cocoa, coffee, oil palm, rubber, soy, and timber — and applies where any of these represent 1% or more of total FLAG volume. Other deforestation-risk commodities are in scope at a 5% threshold. A FLAG target without a valid no-deforestation commitment is rejected at SBTi review.

No offsets in the target. BVCM and removals are separate.

Offsets cannot count towards FLAG target progress. Companies must reduce gross FLAG emissions on the pathway. Three nuances matter for the corporate strategy team:

Two sides of the same coin.

FLAG and TNFD are complementary, not duplicative. FLAG operationalises the “reduce” side — quantified, time-bound emission targets for the land-using parts of the business. TNFD operationalises the “disclose” side — the dependencies, impacts, risks, and opportunities a company surfaces while doing the FLAG work.

Practically: the LEAP “Locate” and “Evaluate” outputs feed FLAG’s commodity-specific footprint. The FLAG target then becomes a key metric inside TNFD’s Metrics & Targets pillar. Companies that run them in sequence pay roughly half the data-collection cost of running each in isolation.