In recent years, the Science Based Targets initiative (SBTi) has played an influential role in encouraging companies worldwide to set ambitious, science-based targets for reducing greenhouse gas emissions and limiting global warming to 1.5°C above pre-industrial levels. As of this writing, more than 5,600 companies have already set science-based targets.
However, despite this growing momentum, a significant challenge remains especially for companies with land-intensive operations: very few have comprehensively accounted for their Agriculture, Forestry, and Other Land Use (AFOLU) emissions or removals in their SBTi targets or disclosures, which accounts for 22% of total global emissions, making it the largest emitting sector after energy.
The release of the SBTi FLAG (Forest, Land and Agriculture) Guidance aims to precisely address this critical issue, providing the necessary framework, especially useful for companies in the food industry, to fully integrate their AFOLU emissions into their climate strategies.
This article will provide you with all of the essential information you need to understand about the SBTi FLAG Guidance and why distinguishing between your FLAG and non-FLAG emissions can help you build a more targeted reduction strategy.
FLAG emissions pertain specifically to the agricultural sector, which include Land Use Change (LUC), Land Management (LM) up to the farm gate encompassing activities such as deforestation, soil management, and livestock, and carbon removals. Conversely, Non-FLAG emissions cover broader industrial activities beyond the farm gate, including transportation, processing, and energy use. It’s important to note that emissions from transporting agricultural products post-harvest are classified as Non-FLAG despite their agricultural origins.
Another important note is that FLAG SBTs are separate from energy and industry (Non-FLAG) SBTs. This means that reductions in FLAG emissions, like improved forest management or forest restoration, cannot be used to meet targets for reducing fossil fuel emissions. This separation ensures that companies do not use biogenic removals in their value chains to meet Non-FLAG targets. Biogenic removals can only be counted towards FLAG targets.
📌 Remember: carbon removals are not the same as carbon offsets.
To illustrate, consider a global food company which has a vast supply chain encompassing both agricultural and industrial activities.
FLAG emissions for this global food company include those generated by agricultural practices, such as deforestation for cocoa plantations, methane emissions from dairy farms, and nitrous oxide from fertilizer use in wheat fields. These emissions are accounted for up to the farm gate, covering all activities involved in producing raw agricultural products.
Non-FLAG emissions, on the other hand, encompass activities beyond the farm gate. This includes the transportation of raw materials to processing facilities, the energy used in manufacturing plants to produce finished products like chocolate bars and bottled water, and the emissions from the distribution of these products to retailers worldwide.
The Guidance significantly impacts food companies as it is one of the sectors mandated to report and set FLAG-specific science based targets. Specifically, the following sectors are required under the Guidance except if their FLAG related emissions make up less than 5% of their total emissions:
*Note that setting FLAG targets are not required for small and mid-sized enterprises (SMEs).
The FLAG Guidance also applies to companies in other industries if their FLAG-related emissions make up more than 20% of their total emissions. For companies with FLAG emissions below the 20% threshold or are in a FLAG sector but with FLAG emissions below 5%, they can choose not to set a separate FLAG target and include it in the traditional target. Removals may not be used in this case.
The FLAG Guidance provides for two approaches for target setting: (1) the sector approach and (2) the commodity approach. The two approaches may also be combined for target-setting.
Committing to FLAG targets requires companies to commit to zero deforestation across all emissions scopes by 2025, which directly tackles a major environmental issue linked to food production. Addressing FLAG emissions is not only crucial for environmental sustainability but is also strategic for business, affecting compliance, risk management, and market positioning. By focusing on FLAG emissions, food companies can enhance their sustainability credentials and align with global efforts to limit climate change.
To assist food companies in managing their FLAG emissions, Carbon Maps has introduced a new feature on its platform dedicated to reporting SBTi FLAG emissions. This functionality allows users to distinguish between FLAG and non-FLAG emissions, providing a clearer understanding when it comes to setting targets.
Via the Carbon Maps platform, you can automatically start distinguishing between your FLAG and non-FLAG emissions even without access to your supplier data through databases such as Agribalyse®, which provides LCIs (Life Cycle Inventory) for a wide range of food products. The Agriculture stage on Agribalyse® considers the cradle-to-gate system which is defined as:
The criteria and categories defined by SBTi for FLAG emissions closely match the analyses provided by Agribalyse® in the Agriculture category. However, there may be some slight overestimation as there are some sub-components such as agricultural machinery, energy for irrigation, or heating of buildings that do not strictly correspond to FLAG emissions as defined by SBTi. With that said, this overestimation is marginal compared to the magnitudes of each of these subcomponents.
You can use this data to set specific FLAG targets as required by SBTi. As an example, one Carbon Maps customer was able to establish a separate reduction target for their FLAG emissions after recognizing that 78% of their overall footprint stems from agricultural emissions. If you’d like to learn more about the features of our SBTi FLAG feature in detail, do not hesitate to write to us or to schedule a call.
Having spoken with dozens of team members in sustainability, we’ve come to know that a significant amount of time is disproportionately spent on reporting, which encompasses gathering, analyzing and validating data. Sustainability teams’ resources are better spent on enhancing impact reduction strategies. At Carbon Maps, we focus on building tools to automate cumbersome processes such as data collection and analysis.
If you’ve submitted an SBTi target or are planning to do so to differentiate from your competitors and enhance your brand, discover how much the assistance of automation enables you to accomplish. Book a meeting with one of Carbon Maps' experts to learn how our platform can help you report and manage your FLAG and non-FLAG emissions effectively.
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