The SBTi Forest, Land and Agriculture Guidance updates: What has changed?

As recognized this week in the first global stocktake, food production systems are increasingly vulnerable due to the adverse impacts of climate change. To keep the Paris Agreement temperature goal within reach, nature must be protected and restored. This includes an end to deforestation and forest degradation by 2030.

Aware of this, last year the SBTi, with support from WWF, launched the world’s first framework for business in land-intensive sectors, such as food, agriculture and forestry, to set science-based targets that include land-related emissions and removals. The FLAG Science-Based Target-Setting Guidance was urgently needed. The land sector represents almost a quarter of global greenhouse gas (GHG) emissions, making it the largest emitter after energy. But due to the absence of methods and data for land-related emissions, most of these were previously unaddressed in corporate emission targets.

The FLAG Guidance has now been live for one year and already more than ten companies have successfully submitted their science-based land-related emissions reduction targets to the SBTi, and had them validated as being in line with science. We have also learned many lessons and gathered feedback from stakeholders, and following an internal review, we are now using the insights gathered to make some minor updates to the FLAG Guidance.

The updates will increase accessibility, transparency and understanding of the FLAG target-setting criteria and process. The updated SBTi FLAG Guidance Version 1.1 is now available and replaces the previous version with immediate effect. The key updates and clarifications are outlined below.

Bringing clarity to FLAG target validation and reporting

Companies are expected to deliver both emission reductions and land removals to achieve their FLAG science-based targets, yet the focus should be mostly on emissions reductions, as these represent on average 62% of the mitigation potential set out in the FLAG sector pathway. Biogenic CO2 removals - e.g. restoring natural ecosystems, deploying silvopasture, improving forest management practices, and enhancing soil carbon sequestration on pasture and farmland - are also key as they represent 38% of the mitigation potential set out in the FLAG sector pathway. However, to align with 1.5ºC, enhanced removals cannot substitute ambitious emissions reductions.

Target coverage must be met separately for FLAG scopes 1 and 3 of a company's GHG inventory. This has become mandatory in the updated version of the SBTi FLAG Guidance. In this context, a company with a major share of land-based scope 3 emissions, and a minor share in its scope 1 (or vice versa), must meet these targets independently. This ensures that:

• Businesses take the necessary actions to reduce FLAG-related emissions across both scopes.
• Targets contribute to conserving the sector carbon budget.
• Emissions reductions are incentivized in the most relevant parts of the value chain.

Scope 2 land-based emissions must be accounted for under the bioenergy criterion (C10) within the SBTi General Criteria.

Individual commodity sub-targets must be met separately

Companies setting a FLAG target using multiple commodity pathways or using a combination of the sector and commodity pathways can use the FLAG target aggregator, in the FLAG Target-Setting Tool, to aggregate the results into a single emissions reduction target. However, companies using the aggregation function must meet their sub-targets, in addition to their aggregated FLAG target, separately. This is another way to ensure the sector’s carbon budget is preserved and the company reduces emissions in the most pertinent parts of its value chain.

Enhancing FLAG target validation data quality

In addition to the SBTi FLAG Guidance and Target-Setting Tool publication last year, we also released the FLAG Annex submission form, which lays out all data that a company must share when submitting a FLAG target for validation.

The data quality section in the SBTi FLAG Guidance has now been updated to share how companies can enhance the quality of the data submitted, and expedite the validation process. It clarifies the expected level of data granularity, including information on FLAG emissions per commodity and region; disaggregated data on FLAG emissions (i.e. separate land use change from land management emissions) and removals per commodity. It encourages companies to break down emissions from land management CO2 and non-CO2 (i.e. methane and nitrous oxide) within their scopes 1 or 3. It also brings clarity on how representative data must be, default activity data will be accepted as long as emission factors are representative of the corresponding commodities (i.e. country emission factors should be used as minimum).

Scope 3 land-based emissions must be assessed by all companies

According to the SBTi FLAG Criteria, appropriate target coverage requires full accounting of land-based emissions as per the GHG Protocol Land Sector and Removals Draft Guidance, and the inclusion of these emissions in the baseline. As reiterated in the updated SBTi FLAG Guidance, this is regardless of whether a separate FLAG target is set or not. Though the FLAG Guidance was written specifically for companies in land-intensive sectors to set science-based targets, many companies can expect to have land-based emissions in their value chains. This minor update clarifies that companies from all sectors must account for their land-based emissions in their baseline, even when a separate FLAG target is not set. Removals cannot be used in this case.

New implementation timelines and clarifying language

To align with SBTi resources, other minor updates that have been implemented to SBTi’s FLAG Guidance Version 1.1 cover corrections to the timelines companies must consider when setting FLAG science-based targets. Clarifications have also been implemented to improve language to the criteria and recommendations summary table, and to the correspondent sections.

The time for action is now

As stewards of our planet, the forest, land and agriculture sectors have a pivotal role to play in the decarbonization of the global economy. This enhanced guidance is a roadmap that brings both emissions reductions and removals into companies’ climate targets to create a nature positive future, where nature is restored and thriving ecosystems play a critical role in tackling climate change. Now is the moment to take charge and sow the seeds of a sustainable legacy, by setting ambitious FLAG science-based targets. Commit now and ensure your company is helping to keep 1.5°C and net-zero within reach.

This blog was updated on February 14 2024 following minor clarification on biogenic CO2 removals.