Food systems caused 34% of global greenhouse gas emissions in 2015. Of that, 71% came from farming and land use, not from factories or transport (Crippa et al., 2021). Yet in many food companies, the decarbonisation plan starts with electricity, gas and the vehicle fleet. The SBTi asks land-intensive companies for a separate FLAG target, which covers the farm side of their footprint.
- FLAG emissions in SBTi: emissions and removals from forests, land and agriculture, with a target separate from energy and industry.
- Who must set a FLAG target: companies in farming, food processing, food retail, tobacco, and forest and paper products.
- A separate target: FLAG cuts and removals cannot count towards energy and industry targets.
- Land use change (LUC): emissions from turning forests into fields, often hidden in feed and imported raw materials.
- Removals: count only if they meet GHG Protocol criteria; most companies should start with emissions.
What are FLAG emissions?
FLAG stands for Forest, Land and Agriculture. FLAG emissions come from land use, farm production and land use change. In practice, they can include:
- methane from digestion in cattle;
- emissions from manure and slurry;
- nitrous oxide from fertilisers;
- emissions from producing animal feed;
- emissions from cutting down forests or turning other natural land into farmland;
- CO₂ emissions and removals linked to soils, biomass and land management.
Unlike energy emissions, FLAG emissions depend on what a company buys. They also depend on where the raw material comes from, how it was produced and what practices suppliers use.
A meat processor may have its Scope 1 and 2 emissions well under control: fuels, heat, cooling and electricity. But its largest emissions may come from the livestock it buys, and from the feed and other farm products in its supply chain. In that case, decarbonisation does not end at the factory gate. It must cover the supply chain.
The SBTi pathways for FLAG cover both emission cuts and removals on land. They include commodity pathways for beef, pork, dairy, maize, soy, wheat, rice, palm oil, timber and wood fibre, among others.
Who must set FLAG targets?
FLAG targets apply to companies whose business is linked to farms, forests and land. They also apply to companies with large emissions from such activities in their value chain. The SBTi requires FLAG targets from companies in these sectors:
- farm production;
- food from animal sources;
- food and drink processing;
- food retail;
- tobacco;
- forest and paper products.
Companies in other sectors must also set one if FLAG emissions make up 20% or more of their total emissions.
In practice, FLAG targets matter most for companies in:
- meat production and processing;
- dairy;
- animal feed;
- grain processing and vegetable oils;
- food processing;
- food retail;
- paper production;
- packaging from biological materials and wood products.
If your company works in such a sector and is preparing SBTi targets, check whether you need a separate FLAG target. A standard target for Scopes 1, 2 and 3 is then not enough.
Why is FLAG a separate target and not part of normal Scope 3?
One of the key rules is that FLAG targets are separate from targets for energy and industrial processes. The SBTi requires you to report FLAG cuts and removals separately. FLAG actions cannot be used to meet energy and industry targets. In other words, you cannot balance industrial emissions with removals on land.
This matters a lot in practice. You should split your inventory into:
- energy and industry emissions: for example energy, fuels, industrial processes, transport and other things you buy that do not come from farms;
- FLAG emissions: for example livestock, farm raw materials, feed, soy, grain, animal products, and emissions from land use and land use change.
Only with this split can you set the right targets, avoid counting twice and prepare your SBTi submission well.
What does LUC mean and why does it matter so much?
LUC emissions are a key part of FLAG emissions. LUC stands for land use change. These emissions arise when land changes its function, for example when a forest becomes a field, a pasture or a plantation.
In the food sector, LUC emissions do not occur at the factory but in the supply chain. Animal feed is a good example. If feed contains high-risk ingredients, such as soy from regions linked to deforestation, LUC emissions can add a lot to the product carbon footprint.
In practice, you cannot always trace raw materials back to a specific plot. But that does not mean you can skip the topic. If you lack data from suppliers, use sound average data. Describe your sources, methods and assumptions clearly, and state the limits of the calculation. For SBTi FLAG, you must identify LUC emissions and report them separately from other FLAG emissions.
How do you prepare FLAG data for the SBTi?
The SBTi Validation Portal asks companies that submit FLAG targets for extra items. The guidance has a separate section, "FLAG (setting FLAG targets)". It asks you to answer FLAG questions and to explain how you count removals. You must also confirm that you commit to no deforestation, no land conversion and no peat burning.
So you need more than a general corporate carbon footprint. You also need an organised set of FLAG data. The key items are:
- commodity, region of origin, mass of raw material, emission intensity and method;
- LUC emissions, land management CO₂ emissions and land management non-CO₂ emissions;
- any removals, with a description of the method.
How should you treat removals in FLAG emissions?
Removals, that is CO₂ taken up on land, are one of the most sensitive parts of FLAG. Do not treat them as a simple "negative emission" that you subtract from the result without extra documents.
The SBTi allows only removals that meet the GHG Protocol criteria in FLAG accounting and targets. The carbon must stay stored and be traceable. You need primary data, you must manage uncertainty, and you must account for any reversal. If you do not include removals, you must explain why and present a plan to improve your accounting.
In practice, most companies should first focus on a reliable count of FLAG and LUC emissions. Treat removals with care, above all when you lack primary data, traceability and a system to manage the risk of reversal.
Which reduction actions are typical for FLAG?
FLAG decarbonisation is not about buying renewable energy. It needs a completely different set of actions. For food and meat companies, typical levers include:
- more efficient livestock production;
- less feed per kg of weight gain;
- new feed recipes;
- a smaller share of feed ingredients with a high LUC risk;
- deforestation-free raw materials;
- better manure and slurry management;
- feed additives that cut methane;
- better animal health and welfare;
- fewer production losses;
- work with suppliers on primary data and farming practices.
According to the SBTi, the land sector (AFOLU) can follow 1.5 °C pathways in several ways. These include an end to deforestation and land conversion, and less peat burning and forest damage. They also include lower farm emissions and changes in demand, such as less food loss and waste.
Why is an inventory alone not enough?
Companies often start with the question: "Have we calculated our carbon footprint?" For FLAG, you need to go further. The result alone is not enough if you cannot answer these questions:
- Which emissions are FLAG, and which are energy and industry?
- Which raw materials cause the most emissions?
- Does the result include LUC?
- Are feed emissions calculated in a representative way?
- Do you know where the key feed ingredients come from?
- Does the company have a no-deforestation policy?
- Will suppliers gradually provide primary data?
- Which actions will let you meet the reduction target?
For validation, you must also confirm a few more things. You will keep reporting, recalculate when needed, publish the target within six months and work to meet it. So you need not only a calculation, but also a plan to manage the target.
How does EXERGY approach FLAG emissions and SBTi target submission?
FLAG projects need three skills together. The first is experience in calculating a corporate carbon footprint. The second is calculating the carbon footprint of food products. The third is building a decarbonisation strategy. Calculations alone are not enough. You need to know which emissions are FLAG, where LUC appears and which actions will really cut emissions.
We help you organise data, calculate FLAG emissions, prepare targets and go through the whole SBTi submission. We work with purchasing data, supplier data and emission factors chosen for each raw material. So you can not only calculate your carbon footprint, but also find the main sources of reduction.
If your company works in food, farming or processing, start with a FLAG pre-check. It shows whether the SBTi FLAG requirements apply to you, what data you will need and how to prepare for validation.
Are you preparing an SBTi target submission? Download our free guide, 8 common mistakes in SBTi target submissions. It has explanations, examples from real submissions and a checklist.