Understanding FLAG Emissions: A Pillar of the Low-Carbon Transition

Understanding FLAG Emissions: A Pillar of the Low-Carbon Transition 

Companies committed to net-zero pathways often focus their efforts on emissions from direct operations or energy consumption (Scopes 1 and 2). More advanced ones extend their analysis to Scope 3. Yet one area remains largely overlooked: emissions related to land management, agriculture, and forestry known as FLAG emissions.

These emissions present unique challenges, particularly in terms of measurement and monitoring. Until recently, most available methodologies were designed primarily for industrial or service sectors. What was missing was a framework suited to the complex dynamics of the land sector. And yet, FLAG-related activities account for approximately 20 to 22% of global net GHG emissions, while offering significant potential for natural carbon removals.

In 2022, the Science Based Targets initiative (SBTi) addressed this methodological gap by releasing the FLAG Guidance a sector-specific framework for Forestry, Land, and Agriculture. Published in 2023, this guidance equips companies with precise tools to measure, reduce, and clearly separate FLAG emissions from other emission types, in alignment with a 1.5°C climate trajectory. This framework represents a strategic shift: it places land-based emissions and removals at the core of climate strategies and requires rigorous, differentiated accounting rooted in the natural dynamics of ecosystems.

Why a FLAG Framework?

Long overlooked in corporate climate strategies, the land sector now requires a differentiated approach. Unlike industrial or energy-related emissions, land related fluxes whether emissions or removals are shaped by biological, seasonal, often reversible, and highly localized dynamics. This complexity has led to these emissions being underrepresented in traditional reduction plans. Yet companies operating in or sourcing from agricultural, forestry, or food value chains are directly exposed to these challenges. Without a dedicated framework, they risk either not accounting for these flows or including them in unsuitable boundaries, thereby compromising the credibility of their climate targets.

To address this gap, the Science Based Targets initiative (SBTi) released the FLAG Guidance in 2022 a methodological reference designed to rigorously account for emissions and removals related to Forestry, Land. use, and Agriculture. It establishes a clear separation between FLAG and non-FLAG emissions to ensure the integrity of reduction pathways and to prevent unfounded internal offsetting. By providing tools for classification, measurement, and reduction that are tailored to the specificities of the land sector, the FLAG framework enables companies to build more comprehensive, transparent, and planet-aligned climate commitments.

Definition of FLAG Emissions

FLAG Emissions (Forest, Land and Agriculture) refer to all greenhouse gas emissions and removals directly related to land use, land management, and land-use change. These flows are categorized into three main groups by the SBTi, and are distinct from traditional industrial or energy-related emissions, referred to as "non-FLAG" emissions. 

a. Land Use Change – LUC

These are emissions resulting from the conversion of natural ecosystems into agricultural or urban land such as deforestation, wetland drainage, or savanna burning. These emissions are often large-scale, immediate, and irreversible.

b. Land Management

This includes emissions from agricultural and forestry practices, such as the use of nitrogen fertilizers, enteric fermentation, manure management, agricultural machinery use, and logging operations. These emissions vary significantly depending on the land management practices implemented.

c. Carbon Removals

These refer to biogenic carbon removals achieved through practices such as reforestation, agroforestry, silvopasture, or increasing soil organic carbon. These flows are not external offsets nthey must be included within the FLAG targets and rigorously measured.

These three types of flows are clearly illustrated in the explanatory diagram below, which distinguishes between land emissions factors, non-land emissions factors, and net removals.

The Need for Specific and Rigorous Accounting

FLAG emissions follow biological, territorial, and seasonal cycles, which require a distinct accounting approach compared to traditional industrial emissions. The SBTi therefore mandates a strict separation between FLAG and non-FLAG flows both in emissions inventories and in reduction targets.

Three emission factors are used:

• Non-land emissions factor: for conventional emissions (e.g., energy, industrial processes)
• Land life cycle emissions factor: for land-use-related emissions (e.g., fertilizer use, deforestation)
• Land removal factor: for internal removals (e.g., reforestation, carbon sequestration)

This methodological rigor helps avoid unjustified offsetting. Removals are only accounted for if they are directly linked to the company, permanent, verifiable, and tracked separately. They can never substitute for gross emission reductions. The goal: to ensure the credibility of net-zero trajectories by incorporating ecosystem-specific dynamics into carbon accounting.

Which companies are concerned?

Since April 2023, the Science Based Targets initiative (SBTi) has required certain companies to set specific reduction targets for FLAG emissions, in addition to their standard climate targets. This requirement applies if either of the following conditions is met:

1. The company operates in a sector explicitly identified as within the scope of FLAG, including:
   
   • Forestry products, wood, pulp, rubber
   • Agriculture (crop or livestock production)
   • Food processing
   • Food retail
   • Tobacco
     
     
2. FLAG emissions account for more than 20% of the company’s total emissions across scopes 1, 2, and 3.

This rule applies not only to companies in primary sectors, but also to brands in other industries that are indirectly exposed through their supply chains. For example, a textile company sourcing cotton or a cosmetics brand using palm oil may fall within the scope if emissions from agricultural production exceed the 20% threshold. As a result, the guidance recommends that all companies even those not directly operating in agricultural or forestry sectors conduct a comprehensive assessment of their FLAG emissions, including scope 3, to determine whether separate targets are required.

Once the FLAG boundary is defined, emissions must be measured, segmented, and addressed separately, with specific short and long term targets aligned with the SBTi’s defined pathways. This approach helps prevent generic climate statements from obscuring critical emission sources, particularly in complex global supply chains.

FLAG Methodologies: Two Possible Pathways

Companies subject to the FLAG framework are required to set specific targets for both land-related emissions and removals. To support this, the Science Based Targets initiative offers two methodological approaches, allowing organizations to tailor their reduction pathway according to their activities and emissions profile. These trajectories are outlined in SBTi’s core guidance document.

1. The Sector Pathway

The sector pathway is based on a linear absolute reduction of FLAG emissions, applicable to all eligible companies regardless of their specific sector or exposure to raw materials.

• Mandatory reduction rate: 3.03% per year
• Long-term target: 72% absolute reduction in FLAG emissions by 2050
• Calculation formula:
  
  • If the chosen base year is 2020 or earlier:
    Reduction = 3.03% × (target year – base year)
  • If the base year is after 2020:
    Reduction = 3.03% × (target year – 2020)

This approach follows a linear trajectory aligned with IPCC recommendations to limit global warming to +1.5°C

2. The Commodity Pathway

The commodity pathway is designed for companies with significant exposure to specific agricultural or forestry commodities, for which the SBTi has developed intensity-based factors.

• Targets are expressed in tCO₂e per ton or cubic meter of product (e.g., beef, rice, soy, palm oil, milk, wood, leather, etc.)
• Companies can set targets for one or more commodities
• A hybrid approach is possible: apply the sector pathway to the full perimeter and use the commodity pathway for the most impactful commodities

This method allows companies to align their reduction efforts more closely with the agronomic, geographic, and economic realities of the sectors involved.

Zero Deforestation: A 2025 Imperative

One of the core pillars of the FLAG framework is the commitment to eliminate deforestation from corporate value chains. By December 31, 2025, all companies required to set FLAG targets must demonstrate a clear public commitment to zero deforestation across all relevant commodities and across their full emissions scopes (1, 2, and 3), as mandated by the SBTi.

This commitment is not limited to companies operating directly in forestry-related sectors. It also applies to businesses whose raw materials or products are linked to deforestation within their supply chains, including:

• Soy 
• Cocoa
• Palm oil
• Beef
• Wood and wood-based products (paper, fiber, etc.)

To meet this requirement, companies must implement responsible sourcing policies for high risk raw materials, based on:

• Detailed mapping of supply chains
• Supplier selection criteria that include anti-deforestation commitments
• Robust traceability systems
• Independent audits or recognized third-party certifications
  

According to the SBTi, the goal is to prevent declared emission reductions from being based on unsustainable practices and to ensure that FLAG reduction pathways are not undermined by the loss of natural carbon sinks or accelerated degradation of forest ecosystems.

By placing deforestation at the core of its strategy, the FLAG framework aims to enhance the ecological integrity of climate commitments aligning decarbonization with biodiversity conservation and the protection of soils and forests.

The Role of Natural (Carbon Removals)

Within the FLAG framework, greenhouse gas emissions are not the only data to be considered. The approach developed by the Science Based Targets initiative also acknowledges the strategic role of natural removals referred to as biogenic carbon removals which reflect the ability of certain ecosystems to capture and durably store atmospheric CO₂.

These removals are not external offset credits: they must be generated within the company’s operational boundary or direct supply chain and must result from verifiable agricultural or forestry practices.

Recognized removal levers include:

• Reforestation or tree planting on degraded land
• Agroforestry (integrating trees into agricultural systems)
• Silvopasture (integrated forest–pasture systems)
• Increasing soil organic carbon
• Restoration of peatlands and wetlands

According to official guidance, natural carbon removals could account for up to 38% of the global FLAG emissions reduction potential by 2030, complementing gross emission reductions.

However, to be accounted for, these removals must meet three essential criteria:

1. Permanence : The removal must be long-lasting, with a low risk of reversal (e.g., due to wildfires or land-use change).
   
   
2. Traceability : Carbon uptake data must be based on measurable, localized, and verifiable practices.
   
   
3. Exclusion of external offsetting : A FLAG removal cannot be used to offset non-FLAG emissions, particularly those linked to fossil fuel combustion.

This methodological stance reinforces the need for transparency and prevents the misuse of carbon neutrality claims based solely on tree planting or credit purchases. It encourages companies to view removals as an integral part of a sustainable agricultural or forestry system on equal footing with efforts to reduce gross emissions.

FLAG vs Non-FLAG: A Critical Distinction for Robust Climate Strategies

Beyond being a technical distinction, separating FLAG from non-FLAG emissions is a core principle of the framework established by the Science Based Targets initiative (SBTi). This separation ensures the credibility of reduction pathways and prevents misinterpretation or inappropriate internal offsetting. The two categories of emissions are driven by different dynamics and therefore require tailored mitigation levers: energy efficiency, electrification, or demand reduction for non FLAG emissions; land management, agricultural practices, and sourcing policies for FLAG emissions. Aggregating them would obscure these specificities and weaken the effectiveness of climate action plans.

Moreover, this distinction is becoming essential for compliance with emerging regulatory requirements such as the CSRD directive, the EU Deforestation Regulation (EUDR), and green taxonomies, all of which demand a segmented analysis of climate impacts. Finally, by addressing FLAG emissions separately, companies can fully highlight their environmental and social co-benefits such as biodiversity, soil health, water management, and social justice in agricultural regions. These are all critical components of a coherent and credible CSR strategy.

Conclusion:

The integration of FLAG emissions into climate strategies represents a major methodological shift for companies. While reducing industrial emissions typically relies on energy efficiency or technological changes, addressing land sector emissions requires structural changes in supply chain management, agricultural practices, and the ecosystems directly or indirectly influenced by the company.

The FLAG framework, as defined by the Science Based Targets initiative, requires affected organizations to measure, categorize, and reduce land-related emissions separately, transparently, and in alignment with a 1.5°C compatible pathway. It also includes a strong zero-deforestation requirement by 2025, covering emissions from scopes 1, 2, and 3, and mandates a separate accounting for natural removals to prevent any misuse of land sinks for industrial emission offsets

But beyond methodological compliance, the FLAG framework offers a strategic opportunity. It enables companies to:

• Strengthen relationships with agricultural and forestry producers,
• Differentiate themselves through traceable, science-based commitments,
• Reduce exposure to biodiversity, climate, and regulatory risks (CSRD, EUDR, etc.),
• Actively contribute to the transformation of food and production systems.

By treating land as a distinct lever for climate impact not just another emissions source companies adopt a more holistic approach to their ecological transition. They move away from a declarative neutrality mindset toward a measured regeneration approach, where climate performance is grounded in the physical reality of ecosystems.