Posted by Tim Crozier-Cole

Land sector guidance double bill: SBTi FLAG and GHG Protocol guidance – implications for corporates

Two long-awaited publications came out within days of each other at the end of September. The first was the Science-Based Targets Initiative’s (SBTi) guidance for Forestry, Land Use and Agriculture (FLAG). The second was the GHG Protocol draft Land Sector and Removals Guidance, which sets out the associated rules for GHG accounting.

The timing is no coincidence, the SBTi target setting guidance refers to the GHG Protocol for all matters of GHG accounting, and the development processes have been interlinked. In our opinion the main issues and implications for corporates are:

  • All companies with significant land sector impacts are going to have to update their GHG inventories in line with the GHG Protocol Land Sector and Removals Guidance. This is irrespective of whether they choose to adopt SBTi Net Zero Corporate Standard validated targets or not.
  • The calculation of FLAG emissions and removals will require companies, advisors, and other stakeholders to understand new terminology, definitions and accounting rules.
  • The FLAG guidance is mandatory for companies with, or about to set, SBTi-validated targets in the following SBTi sectors: forest and paper, food production, food and beverage processing, food and staple retailing and tobacco. It is also mandatory for companies in other sectors where FLAG emissions are 20% or more of their total scope 1, 2 and 3 emissions. Its introduction is phased according current SBTi target status as follows:
  1. Companies that set their original SBT pre-Jan 2020 must set a FLAG target by 31st December 2023.
  2. Companies that set their target post-Jan 2020 and pre-30th April 2023 must add a FLAG target by 31st Dec 2024.
  3. Companies setting their first SBTi validated target post April 30 2023 must set a FLAG target upon submission.
  • SBTi target setting will require companies to split their GHG inventory into non-land and FLAG emissions. To set targets in confidence, companies will need to conduct separate pathway and target setting analyses. Progress on energy/industry and FLAG will need to be reported separately and annually.
  • If companies are wishing to count carbon removals as part of their FLAG GHG inventory, they will need to invest in the means to measure it. A practical way forward may be to use established voluntary crediting mechanisms to produce credits, but as an accounting mechanism rather than to produce credits for sale.

Download our FAQ summary report.

A more detailed FAQ summary of the SBTi FLAG target setting guidance and associated draft GHG Protocol accounting guidance is available here:

Find out more about the FAQ summary report

For further support, or any other queries on developing net zero strategy, please contact Tim Crozier-Cole, Head of ‘Aim for Zero’ Corporates.