SBTi FLAG Guidance V1.2: What Companies Need to Know
A comprehensive guide to setting science-based targets for Forest, Land and Agriculture emissions, understanding applicability criteria, coverage requirements, and no-deforestation commitments.
By Climate Decode • • 10 min read
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>20%
Companies that must set FLAG targets from FLAG sectors
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11
Commodity-specific pathways available
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2030
No-deforestation commitment deadline
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What is the SBTi FLAG Guidance? |
The Forest, Land and Agriculture (FLAG) Guidance is the SBTi's framework for setting science-based targets on land-related greenhouse gas emissions. It addresses a historically difficult-to-quantify area: the emissions and removals associated with agriculture, forestry, and land use change collectively known as AFOLU (Agriculture, Forestry and Other Land Use).
AFOLU represents approximately 22% of net anthropogenic GHG emissions (~13 GtCO₂e per year), with roughly half from agriculture and half from land use change and forestry. The land sector could contribute up to 37% of the emission reductions and removals needed through 2030. The FLAG Guidance provides companies with the criteria, tools, and pathways to set targets consistent with limiting global temperature rise to 1.5°C.
“FLAG targets are separate from and complementary to your energy/industry (non-FLAG) SBTs. You need both. FLAG abatement cannot be used to meet fossil fuel reduction targets, and energy/industry reductions cannot be used to meet FLAG targets.”
Critical Requirement
FLAG targets have been mandatory since April 30, 2023 for companies setting or updating SBTs. Companies with existing validated SBTs but no FLAG target must add one at their five-year review submission.
The FLAG Guidance was first published in September 2022 (V1.0), updated in December 2023 (V1.1), and has now been urgently revised to Version 1.2 (March 2026).
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What's New in Version 1.2 |
Version 1.2 of the FLAG Guidance (March 19, 2026) represents a major update released under special circumstances. Key changes include:
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Criterion C4
Flexible No-Deforestation DeadlineThe original hard deadline of 2025 has been replaced with a flexible framework: target date no later than 2 years after FLAG submission, maximum 31 December 2030. |
GHG Protocol Alignment
New Standard AlignmentFull alignment with the GHG Protocol Land Sector and Removals Standard (V1.0, January 2026), now the primary accounting backbone for FLAG target-setting. |
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Criterion C1
Revised ApplicabilityUpdated criteria and clearer language on which companies are required to set FLAG targets, including the 20% emissions threshold based on gross (not net) emissions. |
LUC Accounting
Updated BaselinesUpdated land use change accounting with 20-year discounting period and enhanced traceability requirements for supply chain commodities. |
These updates ensure FLAG targets remain aligned with the latest climate science and accounting standards while providing companies with more flexibility in execution timelines.
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The GHG Protocol Connection |
Version 1.2 of the FLAG Guidance aligns with the newly released GHG Protocol Land Sector and Removals Standard (V1.0, January 2026), which serves as the primary accounting backbone for FLAG target-setting.
This new GHG Protocol standard provides harmonized methodology for quantifying land-sector emissions and removals, detailed guidance on permanence and additionality, framework for linking to both scope 1 and scope 3 boundaries, and requirements for traceability and data quality across supply chains.
Land Use Change Categories
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dLUC (Direct LUC) Emissions from land conversion directly driven by company production (e.g., farm-level deforestation for crop production) |
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sLUC (Subsequent LUC) Emissions from land conversion caused indirectly by company production (e.g., displacement effects in global commodity markets) |
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iLUC (Induced LUC) Broader system-level land use changes induced by market shifts due to company activities. Typically calculated with a 20-year discounting period. |
Validation Requirement: All SBTi FLAG target validation submissions must now reference and comply with the GHG Protocol Land Sector and Removals Standard.
This alignment ensures greater consistency in land-sector accounting across all SBTi submissions and enhanced credibility through recognized GHG Protocol methodologies.
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What's Covered & What's Excluded |
Understanding FLAG boundaries is critical for accurate target-setting. The framework covers specific emissions and removals while explicitly excluding others:
Emissions and Removals Covered
Scope 1: DirectLivestock emissions (enteric fermentation, manure), soil carbon from crop/pasture management, on-farm fuel, liming, urea application. |
Scope 1: Land Use ChangeEmissions and removals from deforestation, forest degradation, wetland drainage/restoration, afforestation on managed land. |
Scope 3: IndirectFLAG emissions in supply chains: livestock, crop cultivation, fertilizer production, LUC in supplier operations (palm, soy, beef, timber). |
Removals: ActiveForest management, agroforestry, soil carbon enhancement, regenerative agriculture — with permanence and traceability per GHG Protocol. |
What's Excluded
BioenergyHandled separately under SBTi bioenergy criterion (C10). Not included in FLAG accounting. |
Post-Farm GateTransport, processing, storage, distribution emissions go in energy/industry GHG inventory. |
Product Carbon StorageCarbon stored in products (timber buildings) not included in FLAG targets. |
Technology RemovalsDirect air capture and tech-based removals outside FLAG scope and cannot meet targets. |
Coverage Thresholds
FLAG targets must cover at least 95% of scope 1 FLAG-related emissions and at least 67% of scope 3 FLAG-related emissions. These are separate from energy/industry thresholds — both must be met independently.
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Carbon Credits, Offsets & Removals |
This is one of the most consequential aspects of the FLAG framework. The short answer: No — purchased carbon credits cannot be used as offsets to meet near-term FLAG targets.
No Purchased OffsetsCompanies cannot use purchased carbon credits from the voluntary carbon market to meet near-term FLAG or energy/industry targets. |
Only In-Chain RemovalsRemovals can only be included if on land owned/operated by company or within supply chain with GHG Protocol permanence requirements. |
Long-Term TargetsPurchased carbon credits may be used for long-term FLAG targets (2050), but not near-term (2030). |
What CountsRemovals must be real, additional, permanent (with buffers), verifiable, not double-counted. Baseline and additionality must be demonstrated. |
“The distinction is critical: reduction targets are met through operational changes. Neutralization (addressing residuals) uses verified removals, not purchased offsets.”
Beyond Value-Chain Mitigation / OER
The FLAG guidance references beyond value-chain mitigation (BVCM) — now reframed as Ongoing Emission Responsibility (OER) under SBTi Net Zero Standard V2. These investments are encouraged but do NOT count toward FLAG near-term targets. They represent additional climate contribution outside your core target pathway.
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How Climate Decode Supports FLAG Implementation |
Climate Decode's Canopy platform provides comprehensive support for FLAG target-setting, from initial applicability screening through validation-ready documentation and ongoing implementation.
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Platform + Expert Advisory
Canopy integrates digital tools with expert advisory to develop and execute a holistic FLAG strategy. From initial applicability screening through boundary mapping, pathway modeling, vendor engagement, GHG Protocol LSR compliance, and validation-ready submission, Canopy provides the transparency and operational efficiency needed to set credible, science-aligned FLAG targets with confidence.