SBTi FLAG guidance: how it impacts you and how to prepare

December 21, 2023

Greenhouse gas (GHG) emissions from the Forest, Land and Agriculture (FLAG) sector contribute to almost 25% of the global GHG footprint. It is imperative, therefore, to mitigate FLAG emissions to avoid exceeding 1.5°C in global temperatures above pre-industrial levels—the Paris Agreement goal. The Science Based Targets initiative (SBTi) released its Forest, Land and Agriculture (FLAG) guidance in September 2022 with minor updates published on December 15, 2023.

Companies in a FLAG-related sector or with FLAG-related emissions that account for more than 20% of their Scope 1, 2, and 3 emissions will need to set FLAG Science-Based Targets. Thousands of companies that plan to set or have already set a science-based target are potentially affected. Within 12 months of the FLAG Guidance release, more than 10 companies had successfully submitted their FLAG targets, which were validated by SBTi.

This article explains who will need to set FLAG Science-Based Targets, and how to prepare for SBTi’s new FLAG guidance. Click the button below to download our quick start guide:

What is the Science-Based Targets initiative (SBTi)?

The Science Based Targets initiative (SBTi) was launched in 2015 to drive climate action in the private sector. It does so by endorsing science-backed practices in emissions reductions and net-zero targets, while providing technical support, independent assessment, and target validation to companies setting science-based targets (SBTs).

SBTs are designed to align corporate actions with the necessary emissions reductions to limit global warming from exceeding 1.5°C above pre-industrial temperatures—a central goal of the Paris Agreement. This will require halving greenhouse gas (GHG) emissions by 2030 and achieving net zero by 2050.

Approaches to setting science-based targets vary, but all businesses follow a similar five-step process:

  • Commit to your intent of setting a SBT by submitting a letter.
  • Develop a target in line with SBTi criteria.
  • Submit your target to SBTi for official validation.
  • Communicate about your new target to stakeholders.
  • Disclose your progress annually through CDP.

Joining the SBTi offers companies key benefits for long-term success and sustainability:

  • Reputation and trust: Committing to science-based emission reduction enhances a company’s reputation, brand, and competitive edge by building trust among customers, investors, and stakeholders.
  • Cost efficiency: Adopting emission reduction strategies, such as energy efficiency and resource optimization, can lead to significant cost savings, reducing both energy consumption and operational expenses.
  • Performance improvement: This also improves a company’s Environmental, Social, and Governance (ESG) performance, which can attract more investment opportunities and meet expectations for transparently reporting climate-related financial disclosures.

Participation in the SBTi positions companies as responsible, forward-thinking leaders, contributing to both environmental sustainability and business resilience.

Why the SBTi’s new Forest, Land and Agriculture (FLAG) guidance matters

Agriculture, forestry and other land use contribute to 24% of global GHG emissions, with deforestation alone accounting for over 10% of annual carbon emissions. Therefore, tracking and mitigating FLAG emissions is vital to reaching global climate goals and avoiding the most catastrophic impacts of climate change.

The FLAG sector is significantly affected by the increasingly devastating impacts of climate change. However, companies in the agriculture sector and other land-intensive sectors are well-positioned to mitigate these climate risks by leveraging SBTi targets and pathways in their fight against climate change.

Note: Even if your company is not required to set a FLAG target, Scope 3 land-based emissions must be accounted for and potentially disaggregated in your baseline and target coverage.

What you need to know about SBTi FLAG guidance

Who will be impacted?

FLAG Targets required

The following sectors will need to set a FLAG target:

  • Forest & paper products: forestry, timber, pulp and paper
  • Food production: agricultural production and animal source
  • Food & beverage processing
  • Food & staples retailing
  • Tobacco


  • FLAG-related emissions > 20% of total emissions across Scopes 1, 2, and 3, even if the company does not fit within the sectors listed above. Total emissions are the gross emissions that exclude removals but include emissions from land use change. Sectors potentially affected include:
    • Textile, Apparel, Footwear and Luxury Goods
    • Textile Manufacturing, Spinning, Weaving and Apparel
    • Hotels, Restaurants and Leisure, and Tourism Services
    • Consumer Durables, Household and Personal Products
    • Pharmaceuticals, Biotechnology and Life
    • Containers and Packaging
    • Retailing
    • Tires
    • Mining
    • Construction materials

FLAG Targets recommended

  • For companies with FLAG emissions that are less than 20% of all Scope 1, 2, and 3 emissions, SBTi still recommends that you set a FLAG target.

FLAG Targets not required

  • FLAG-related emissions < 5% of total emissions across Scopes 1, 2, and 3* (even in designated sectors)
  • Small and medium-sized enterprises (SMEs) meeting 2 or more of the following criteria: employ >250 employees, turnover <€50 million, and total assets <€25 million

If you choose not to set a FLAG target, you will still need to include FLAG-related emissions in the overall target boundary with the other energy/industry non-FLAG targets. FLAG removals (see Carbon Removals section below) cannot be included in the overall target if it is not a FLAG target.

Should you use the sector or commodity pathway?

Setting a FLAG target will need to cover at least 95% of your FLAG-related Scope 1 emissions and 67% of FLAG-related Scope 3 emissions. Target coverage for FLAG Scope 1 and 3 must be met separately.

The SBTi provides two approaches for setting FLAG targets. Both approaches cover the following mitigation actions: reduce land use change (LUC), improve agriculture, shift diets, reduce food loss and waste, restore forests, improve sustainable forest management (SFM) and agroforestry, and enhance agriculture soil carbon.

FLAG sector approach

It covers all sectors.

  • Pathway type: Sector-specific absolute reduction goals, calculated as tons of CO2e.
  • Company type: For companies with diversified land-intensive activities or on the demand side—typically with the majority of their FLAG emissions in Scope 3. Also for supply side companies not covered by the commodity approach.

Commodity-based approach

It contains 11 mitigation pathways for specific commodities in 26 regions with major carbon footprints, i.e., beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, and timber and wood fiber.

  • Pathway type: Commodity-specific intensity convergence goals, calculated as tons of CO2e per ton of product.
  • Company type: For companies on the supply or production side with a commodity representing >10% of total emissions.

Companies can also combine commodity and sector pathways for an aggregated FLAG target. If multiple pathways are aggregated into a single emissions reduction target, companies will need to meet both their sub-targets and their aggregated FLAG target.

Three FLAG emissions and removals categories

Land use change (LUC) CO2 emissions

All emissions from land use change including:

  • Natural forests to plantation conversion
  • Forest degradation
  • Coastal wetlands conversion
  • Peatlands conversion, draining, burning
  • Savannas and natural grasslands conversion

Land management (non-LUC) emissions

All emissions (biogenic CO2, CH4, and N20) from land management activities including:

  • Machinery and vehicles used on farm/in forest
  • Manure management
  • Fertilizer
  • Ag waste burning
  • Soils management, tillage, and flooded soil
  • Forest harvest and management

Carbon removals & storage

Carbon removal activities including:

  • Enhancing soil carbon sequestration
  • Deploying silvopasture/forest restoration
  • Agroforestry/restoring natural ecosystems
  • Improving forest and plantation management practices

These removals are not considered “offsets” because they enhance carbon sinks while also reducing emissions. They can contribute up to 37% of the target mitigation through 2030, and up to 20% by 2050. Removals outside supply chain activities are offsets, and not included in FLAG.

Commitment to no-deforestation by 2025

Stopping deforestation has the potential to mitigate 80% of emissions from land use change. Along with setting a FLAG target that includes all land-related emissions, companies are also required to make a no-deforestation commitment with a target day for when they intend to have fully implemented their commitment/policy. The target date must be no later than December 31, 2025.

The SBTi recommends aligning no-deforestation commitments with the Accountability Framework Institute (Afi) definitions and guidance.

How to prepare for the new SBTi FLAG guidance

1. Understand your targets

Once you determine that you must set a FLAG target (see “Who will be impacted?” for criteria), you will need to either submit your first near-term energy/industrial target, or update your existing near-term target, along with your near-term FLAG target. You also have a choice about whether you want to add a long-term net-zero target.

2. Set emissions reduction goals

You will need to commit to reduction targets over a chosen period of time for your near-term targets and net-zero (long-term) targets using the SBTi FLAG Tool. The commitment statements below provide sample percent reductions and timelines that your company will need to adjust after completing the FLAG tool.

Target type Base year Target year Company commitment 
Near-term submission: FLAG target(s) The most recent base year for when data is available. 

(For base years earlier than 2018, contact SBTi for backcasting.)
Typically 5-10 years after target submission date Reduce Scope 1 and 3 FLAG GHG emissions by 30.3% over 10 years starting at your base year*

No deforestation across your primary deforestation-linked commodities with a target date of FY2025.   
Net-zero submission: FLAG long-term target(s)  

(Must already have an approved near-term SBT to be eligible) 
The same base year as the near-term target. 2050 at the latest Reduce Scope 1 and 3 FLAG GHG emissions by 72% from base year to target year—typically from 2020 to 2050 or earlier*.  
*Target includes FLAG emissions and removals. 

3. Align with the GHG Protocol timeline

The SBTi and the GHG Protocol are aligning their approaches and timelines for land-based emissions accounting and targets.

  • All FLAG companies are required to submit a FLAG target within six months of the final GHG Protocol Land Sector and Removals Guidance (anticipated mid-2024).
  • Until the GHG Protocol’s final draft, companies must set a FLAG target if they are submitting an SBT for the first time, resubmitting an SBT, and/or adding net-zero targets. Companies that booked their target validation before April 30, 2030 are exempt.
  • For now, all companies must follow the GHG Protocol Draft Guidance when submitting a FLAG target.

4. Submit your targets

Based on the targets you are setting, the table below summarizes the documents and tools required for submission. Note that FLAG targets cannot be submitted individually; companies with a validated target must also submit a near-term target update.

 Documents to submit Tools to submit 
Targets that you are setting FLAG AnnexCorporate Target Submission FormFLAG Target-Setting ToolCorporate Near-Term ToolCorporate Net-Zero Tool
FLAG target
+ Near-term target update 
FLAG target
+ Near-term target update
+ Net-zero target 
xxx  x  x  
FLAG target
+ Near-term target 
xx  xx 
FLAG target
+ Near-term target
+ Net-zero target 

5. Re-baseline your existing SBTs

If you already have a science-based target, you will need to adjust it according to the new FLAG guidance. Here are a few steps for adding a FLAG target to your existing science-based target:

  • Disaggregate all land-based GHG emissions: Separate your energy and industrial emissions from land-based emissions by at least the commodity group and geographical sourcing region. Ideally, disaggregated emissions will include those associated with land use change, land management, and land-based removals.
  • Re-baseline: Choose a baseline year for when accurate and granular FLAG data is available.
  • Assess coverage: Review coverage of the existing science-based target to ensure it is adequate—95% for Scope 1 and 2, and 67% for Scope 3.
  • New target: If required, define a new target for energy/industrial emissions. Ensure you use an appropriate FLAG pathway based on your company’s activities.
    • If you are on the demand side, you should use the sector pathway.
    • If you are on the supply side, you can use the commodity pathway(s) if the commodity represents >10% of total emissions.

How can Aligned Incentives help you with SBTi’s FLAG target?

Aligned Incentives offers a strategic approach to help companies evaluate, set, and track an SBTi FLAG target, providing new carbon accounting and mitigation opportunities. By leveraging Aligned Incentives’ expertise, you can effectively integrate FLAG targets into your broader sustainability goals, ensuring that your land use strategies are both environmentally beneficial and economically viable.

  • Set and track FLAG targets: It can be challenging to determine whether your company even needs to set a FLAG target, and if so, by when. We help you navigate the requirements and then either set and track SBTs for the first time with FLAG targets, re-baseline your existing SBTs with new FLAG targets, and/or add net-zero SBTs along with a FLAG target.
  • Develop mitigation strategies: We help companies in scenario testing the impacts of carbon reduction and removal interventions, moving you closer to your FLAG target with the resources that you have.
  • Report and communicate progress: Our SaaS platform, AITrack, allows you to easily track and visualize your company’s progress towards SBTs. We provide you with custom-built dashboards that make reporting for CDP, DJSI and GRI easy, while giving you the data you need to communicate with investors and stakeholders.

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Hannah Wear

Hannnah Wear is a Strategy Associate at Aligned Incentives with a background in climate consulting, policy research and analysis, and strategic funding and management in philanthropy. She is pursuing an MBA in Sustainable Solutions at Presidio Graduate School and previously studied international sustainable development in Thailand.