Why No-Deforestation Must Be a Priority: SBTi’s FLAG Guidance Unpacked

Deforestation doesn’t just mean losing trees, it means losing one of the planet's most effective tools for storing carbon, disrupting ecosystems and jeopardizing our fight against climate change. Land use change is responsible for 11% of global carbon emissions, mostly due to deforestation associated with agriculture and forestry. Halting deforestation therefore offers enormous potential for climate action, accounting for 80% of the land-use change mitigation capacity in SBTi’s FLAG Sector pathway.

In 2023 alone, the world lost 3.7 million hectares of tropical primary forests - equivalent to ten soccer fields every minute. This forest loss led to 2.4 gigatonnes of CO2 emissions that same year, equivalent to nearly half of the United States’ annual energy emissions. Beyond the environmental cost, deforestation and biodiversity loss could cost the global economy around $2.7 trillion per year by 2030. The scale of the problem is undeniable, and the solution lies in immediate and concerted action, especially from companies in land-intensive sectors.

The SBTi recognizes the critical role agriculture, forestry, food and beverage, and other land sector businesses play in tackling the impacts of the climate crisis. Through our Forest, Land and Agriculture (FLAG) Science-Based Target-Setting Guidance, we enable companies in land-intensive sectors to set targets addressing land-related emissions and removals. A key element of this guidance is the requirement to set a no-deforestation commitment. Companies setting FLAG targets must commit to halt deforestation across all emission scopes (direct and indirect) by December 31, 2025. This commitment must cover the company’s primary deforestation-linked commodities, such as soy, cocoa, palm oil, beef, and timber, which are considered to be the most critical contributors to deforestation.

Check out the new FLAG Guidance in Brief for an introduction to the guidance, key steps to set FLAG targets and insights on the no-deforestation commitment.

Why does the no-deforestation commitment matter?

Forests provide clean air, water, biodiversity and climate regulation - ecosystem services that are essential for human and planetary health, as well as for business operations. Reducing emissions from deforestation is critical for achieving FLAG targets and preserving vital ecosystems. This includes halting activities that clear natural forests for other land uses. The private sector has a pivotal role in this effort, with growing focus from sustainability and investor initiatives on eliminating commodity-driven deforestation. The SBTi’s FLAG Guidance emphasizes that tackling deforestation is a global challenge that requires active business involvement, while aligning with goals of key existing regulations and initiatives such as the European Union Deforestation Regulation for large operators and traders, the United Nations High-Level Expert Group recommendations, and the Accountability Framework initiative (AFi).

How are primary-deforestation linked commodities defined?

Primary-deforestation linked commodities are those most frequently associated with the loss of natural forests. Companies must assess their operations and supply chains to identify which deforestation-linked commodities are most relevant to them. For some, this may extend beyond the five commodities listed above to include others sourced in significant quantities. Businesses are required to include all relevant commodities in their no-deforestation commitment, ensuring comprehensive coverage of their supply chain emissions (scopes 1, 2 and 3). This includes commodities embedded in purchased animal products via livestock feed.

What does “no-deforestation by 2025” mean?

The 2025 deadline represents the date by which companies are expected to fully implement their no-deforestation commitments. The SBTi recommends that these commitments align with the Accountability Framework. Full implementation, as defined by AFi, means that all or nearly all products in a company’s supply chain are sourced from land that was not deforested after the cutoff date. It also means companies have systems in place to manage deforestation risks, such as supplier engagement mechanisms and traceability systems.

The SBTi FLAG Guidance and AFi guidance both recommend a cutoff date of 2020. A cutoff date is the date after which any deforestation occurring in a specific area is considered non-compliant. This means that if a company sources commodities from a production unit deforested after 2020 then they would not be compliant with their no-deforestation commitment after the 2025 target date.

Transparent reporting is key to success. Companies with validated science-based targets must disclose emissions annually and progress toward achieving their targets, this includes progress against their no-deforestation commitment.

The commitment applies broadly across all supply chain activities and includes both legal and illegal deforestation.

Reporting and tackling traceability challenges

Meeting no-deforestation targets requires traceability and monitoring systems, especially in complex value chains. Companies are encouraged to use the Accountability Framework to guide action on deforestation and conversion of other natural ecosystems. This guidance provides resources for setting, implementing and reporting on no-deforestation commitments, including implementation of traceability and monitoring systems and recommendations on how to engage suppliers to mitigate deforestation risks. Traceability is often challenging due to the complexity of global supply chains, but companies must proactively address these barriers to achieve meaningful results.

Looking beyond 2025

Stopping deforestation is key for companies to meet their FLAG targets - without tackling deforestation-related emissions success is nearly impossible. The no-deforestation commitment is a critical milestone, but it’s just the beginning of a broader journey. To build a sustainable future and increase our chances of reaching net-zero by 2050, businesses must go beyond the minimum requirements, eliminating all forms of land conversion and restoring degraded ecosystems.

With the end-2025 deadline for no-deforestation commitments approaching, we recognize that companies have questions about this commitment and FLAG targets overall. The SBTi is committed to addressing these in a timely manner to ensure the FLAG target-setting process remains clear, practical and feasible for companies striving to take meaningful action.

The urgency is clear: acting boldly and ambitiously today is crucial to preserving a habitable planet and a strong economy for generations to come. Businesses, financial institutions, governments, and civil society must come together to drive the systemic change needed. This shared effort isn't just about mitigating risks—it's about unlocking opportunities for innovation, resilience, and long-term value creation in a world that depends on thriving natural systems.

By committing to no-deforestation, businesses can reduce emissions, safeguard ecosystems, and lead the way toward a sustainable and resilient future. Are you ready to take the first step? Visit the SBTi FLAG page to learn more. Together, we can ensure a thriving future for people, planet and businesses.

In line with our Standard Operating Procedure for Development of SBTi Standards, this project feedback form is available for stakeholders to share input on the SBTi FLAG Guidance, including the no-deforestation commitment.