Overview
The upcoming Greenhouse Gas Protocol Land Sector and Removals (LSR) Guidance will establish greenhouse gas accounting guidelines for land-based emissions and removals, including those related to Land Use Change (LUC).
LSR, in turn, is the accounting standard for the FLAG (Forest, Land and Agriculture) requirements released by the Science-Based Targets Initiative (SBTi). They outline land sector-specific targets that will be required by companies who set SBTi targets in addition to their company-wide SBTi targets. The new guidance will require companies to set targets if they fall under certain SBTi sectors, or when land-intensive activities contribute 20% or more to their overall emissions. FLAG targets must be separate from their traditional science-based target that covers all other non-FLAG emissions.
Who is required to set FLAG targets?
The SBTi’s FLAG Guidance is relevant to companies who have committed to an SBTi target, and fall under one of the following categories:
If they fall under one of the following SBTi sectors:
Forest & paper products
Food production - agricultural production
Food production - animal source
Food & beverage processing
Food & staples retailing
Tobacco
If they fall under other SBTi sectors, but land-intensive activities contribute 20% or more of their overall Scope 1, 2 and 3 emissions.
Companies who have not, or do not plan to commit to an SBTi target are not required to set a FLAG target.
What does FLAG guidance cover?
FLAG is the land sector-specific initiative of SBTi, which aims to enable companies to reduce the 22% of global GHG emissions from agriculture, forestry and other land use. The FLAG Guidance is the world’s first target-setting standard that covers land-related GHG emissions and removals. FLAG requires companies to set targets across three categories of land sector emissions reductions and removals, which are set out in the draft LSR guidance:
Land Use Change Emissions - This aims to reduce emissions generated as a result of converting natural landscapes for agricultural purposes, including deforestation, forest degradation, and wetlands, peatlands and grasslands conversion.
Land Management Emissions - This aims to reduce emissions generated as a result of agricultural practices, including enteric emissions, soil flooding, manure management, agricultural waste burning, fertilizer production and use, crop residues, on-farm machinery and transport of biomass.
Carbon Removals and Storage - This aims to remove emissions from the atmosphere through climate-positive land practices, such as forest restoration, silvopasture, agroforestry, improved forest management and enhanced soil organic carbon.
Key Requirements of a FLAG target:
Set near-term FLAG science-based targets: 5-10 year emission reduction targets in line with limiting warming to 1.5°C.
Account for removals in near-term FLAG science-based targets: GHG removals include things like improving forest management practices, and enhancing soil carbon sequestration on working lands.
Set long-term FLAG science-based targets: Companies in FLAG sectors will reduce at least 72% of emissions by no later than 2050. They should use the SBTi Net-Zero Standard to set long-term FLAG science-based targets.
Zero deforestation targets must be set for no later than 2025: In line with the Accountability Framework initiative (AFi).
Set science-based targets for fossil emissions: Businesses with land-based emissions are required to set FLAG science-based targets AND science-based targets, since all companies produce fossil emissions.
FLAG target-setting and reporting timelines
Companies that have set, or plan to set SBTi targets are required to set a FLAG target on the following timelines:
SBTi Target Set | FLAG Target Due By |
Pre-April 30, 2023 | Six months after the final release of the Land Sector and Removals Guidance (expected mid-2024) |
Post April 30, 2023 | On submission |
Learn more about how you can use Latis to measure, manage, and report on FLAG emissions.
FLAG Guidance
What is the difference between the GHG Protocol Land Sector and Removals Guidance, and SBTi’s FLAG Guidance?
The GHG Protocol’s Land Sector and Removals (LSR) Guidance will define how land sector emissions can be measured and accounted for. It is currently in draft consultation status, with the final version expected to be released in 2024.
The Science Based Targets Initiative (SBTi) FLAG Guidance defines how companies with SBTi targets are required to set FLAG targets. It was released in September 2022.
What are the minimum requirements for FLAG reporting?
Latis enables companies to measure FLAG emissions at scale for all of their products and materials. Because the Land Sector and Removals Guidance and SBTi’s FLAG guidance does not require primary data for Land Management or Land Use Change emissions, Latis can provide FLAG-compliant reporting with just ingredient information.
Is seafood considered part of FLAG?
Seafood that is wild caught is not considered part of FLAG.
Seafood, primarily farmed, with terrestrial based feedstock is included in FLAG.
Is alcohol considered part of FLAG?
Yes, alcohol is considered part of FLAG as it sources materials from Land, Forest and Agriculture.
Note: If a company is buying alcohol and lacks transparency in the alcohol ingredients and/or inclusion percentages this would be out of scope for Latis.
Is packaging relevant for FLAG emissions?
FLAG emissions only apply to packaging materials that are made from agricultural materials - notably, cardboard or paper products. However, emissions of relevant packaging materials generally do not need to be included in a food company's FLAG target. (See response below for more details)
Should packaging emissions be included in FLAG reporting?
The SBTi FLAG Guidance states that a company's FLAG target must cover at least 67% of FLAG-related Scope 3 emissions. For food companies, FLAG emissions of purchased food materials will comprise substantially more than 67% of their total FLAG-related emissions. Therefore, packaging emissions do not need to be included in your FLAG target.
For reference, we worked with a Swedish conglomerate to successfully set their FLAG target last year. They shared all of their purchased food and packaging information, and while they sell many non-food products containing wood, emissions of purchased food products still surpassed the 67% materiality threshold.
How do you account for land use change with the “deforestation free” commitment?
For land use change, you have to look at any land conversion that has happened over the last 20 years. Deforestation is one factor that results in land conversion, and the “deforestation free” commitment generally only captures the past few years.
Therefore, we suggest that customers engage their suppliers to understand any conversion that has occurred on the land that is being used to grow their crops.
How is Carbon Sequestration related to Carbon Removals?
According to GHG Protocol Land Sector and Removals Draft Guidance:
CO2 removals occur where CO2 is transferred from the atmosphere to storage within a non-atmospheric carbon pool. A CO2 removal can also be referred to as carbon sequestration or enhanced carbon storage where the carbon is derived from atmospheric CO2.
Measuring FLAG Emissions in Latis
How can I manage Land Management and Land Use Change emissions in my product carbon footprint?
Land Management and Land Use Change emissions are typically the highest contributors to a product’s carbon footprint. This is why Latis gives you visibility into FLAG emissions at both the material and product-level. By understanding how FLAG emissions contribute to your product carbon footprint, you can explore product innovation opportunities.
Knowing where you source your ingredients (and where the raw commodity was likely grown) is the first step to understanding and managing your emissions at these stages. We suggest you start by identifying products, materials, and vendors with the highest FLAG emissions. This way, you can strategically engage your suppliers to collect primary data for high impact materials. From there, you can use Latis to model reduction scenarios and identify abatement strategies to reduce FLAG emissions.
Why does my product report not have a value for Land Use Change?
Land Use Change will not appear on product reports that were created before the Land Use Change metric was released. You can create a new Product Report to make sure Land Use Change is reflected. Learn more about Product Reports.
What does it mean if Land Use Change is 0?
A Land Use Change of 0 means that according to our data sources, there is no land conversion associated with the crop in that location. This may happen for a number of reasons.
Products produced in regions with no Land Use Change at a national level will always have a Land Use Change value of 0 (ie. Afghanistan).
Products may be produced in such a small amount that they are not reported at a national level in that region. This makes it impossible to allocate some of the LUC to the crop in question.
Wild harvested ingredients have no associated Land Use Change.
Why is Carbon Removals 0 across all of my products?
In accordance with the GHG Protocol’s Land Sector and Removals guidance, accounting for Carbon Removals requires primary data. Unless the required primary data inputs are provided, Carbon Removals by default will be shown as 0 for all products. Read more on how to account for Carbon Removals.
I don’t see a table 7 or 8 in the FLAG Annex. What is HowGood referring to?
HowGood’s FLAG Annex Report is aligned to the most updated version v1.1., which SBTi launched to replaces the previous version v1. Tables 7 and 8 do not appear in v1, but they are in v1.1.
You can download the latest version of SBTi’s annex v1.1 from here under “Documents to Submit” - FLAG Annex on p3.
I submitted two raw materials to HowGood - for example, corn grain and corn flour - but I only see "corn" reported. Why is that?
We aggregate raw materials such as "corn grain" and "corn flour" into one single commodity - "corn". This is to be expected because SBTi FLAG requires reporting by agricultural commodity.
The quantities seem to be different from the ones I reported. I bought 100 MT of corn flour, but it seems there are more than 100 MT within corn. Why is that?
Let’s say you were buying 100 metric tons of corn grain from France and 100 metric tons of corn flour from France. We would calculate that you were buying 212 metric tons of corn from France. This is to be expected because:
Reporting needs to take place by agricultural commodity (corn), and
Based on its ingredient concentration, we know that you need on average 1.12 tons of corn grain to produce 1 ton of corn flour. This means we need to take processing yields into consideration when reporting purchased values by commodity: 100 MT + 112 MT = 212 MT.
Why is it that Rainforest Alliance certification does not impact the Land Use Change (LUC) emissions factor? What requirements does the GHG Protocol have in order for a certification to be valid in addressing LUC?
Rainforest Alliance Certification does not impact our assessment of Land Use Change (LUC) emissions. In rigor, according to our research team this is to be expected for 2 reasons:
Deforestation is only one of many types of land conversion that we take into account in our Land Use Change metric.
The GHG Protocol looks at a time horizon of 20 years for LUC while the Rainforest Alliance’s certification methodology only looks at a time horizon of 10 years. Because we follow and are 3rd party verified against the GHG Protocol we can update LUC only if the customer has evidence that no deforestation or LUC has occurred in the last 20 years.
Does RSPO impact the Land Use Change emissions of an ingredient?
Similar to the rationale for Rainforest Alliance Certification, RSPO does not impact LUC for a commodity. There are no standards that we are currently aware of that can account for no land conversion over a 20-year period.
Where does HowGood provide the methodological notes and data sources required by the SBTi FLAG Annex?
Under the tab "Annex Questions" of HowGood's FLAG Annex Report you will find the responses to the questions you will need to input in the SBTi FLAG Annex in the tab "Activities, Data & Targets". All questions are clearly highlighted with the respective bullet point which you can copy and paste into your report.
Under the tab titled "report summary" we provide important information on "data sources, methods and assumptions" that you will need to input in the tab "Add-ons Table 8" in the column with the same name.
Why does HowGood assume land management biogenic emissions are zero? Is it because of lack of data?
Indeed, biogenic emissions are rarely called out in the agricultural LCA literature. When they are mentioned, they are assumed to be 0.
Is this assumption of biogenic land management emissions = 0 reasonable based on GHGP, ISO, SBTi? GHGP draft LSR guidance allows for assumed neutral biogenic emissions.
See Chapter 18 of the GHG Protocol’s Draft Land Sector and Removals Guidance. In addition, our model has been third-party certified to be compliant with the GHG Protocol Product Standard and ISO 14067 and this assumption is in line with these standards.
Are there any situations where HowGood would assign biogenic land management emissions above zero?
We are always looking to add granularity to our database where the data are available. Biogenic emissions is one area we continue to explore and hope to see more data as a result of changing reporting standards.