What are FLAG emissions?

Quick Answer: FLAG emissions are greenhouse gas emissions (and removals) that arise from Forests, Land and Agriculture activities, including deforestation, livestock management, fertiliser use, and land use change. They account for approximately 22% of global greenhouse gas emissions annually (EPA). The Science Based Targets initiative (SBTi) now requires companies in land-intensive sectors, or those where FLAG emissions exceed 20% of their total footprint, to measure and set separate FLAG targets alongside their non-FLAG science-based targets.

What are FLAG emissions?

FLAG stands for Forests, Land and Agriculture. FLAG emissions are the greenhouse gases released (or removed) as a result of how land is used and managed, covering everything from converting a forest to farmland to the methane produced by livestock digestion.

The term FLAG is now the standard label for this category in corporate carbon accounting, though scientific literature also calls it AFOLU (Agriculture, Forestry and Other Land Use). The two terms describe the same underlying set of activities.

FLAG emissions are distinct from the fossil fuel combustion emissions that most carbon accounting focuses on. They arise from biological processes: changes in land cover, shifts in soil carbon, and the natural byproducts of agricultural production. This makes them more complex to measure, but no less significant.

What activities produce FLAG emissions?

FLAG emissions fall into two primary categories, each with distinct sources.

Land use change (LUC) covers emissions that result from converting land from one type to another. The most significant example is deforestation: when a forest is cleared for agriculture or development, the carbon stored in trees and soil is released into the atmosphere. Companies typically track these emissions over a 20-year window from the point of conversion, meaning a forest cleared a decade ago may still be generating reportable LUC emissions today.

Land management (LM) covers ongoing emissions from how land is actively used. This includes: - Methane from enteric fermentation (livestock digestion) - Nitrous oxide from nitrogen-based fertilisers and manure management - CO2 from changes in soil carbon caused by tillage or cropping practices - Emissions from biomass burning

A third component, land removals, captures carbon drawn back into the land through reforestation, improved soil health, or other nature-based processes. Companies report removals separately from emissions. They represent a genuine mitigation opportunity, though companies cannot simply use them to offset FLAG emissions under current SBTi guidance.

Why do FLAG emissions matter for carbon accounting?

FLAG emissions represent roughly 22% of global greenhouse gas emissions each year (EPA). That figure exceeds the entire global transport sector (15%) and sits close to heavy industry (24%). Despite this scale, FLAG emissions have historically been left out of corporate GHG inventories, largely because no standardised calculation methodology existed.

That changed in September 2022, when the SBTi released its FLAG Science Based Target-Setting Guidance and the GHG Protocol published its draft Land Sector and Removals Guidance (LSRG). Together, these frameworks established the first consistent methodology for companies to measure, report, and set targets for their FLAG emissions.

For companies with significant land-related supply chains, ignoring FLAG emissions means reporting an incomplete footprint. A food manufacturer that accounts for its factory energy use but not the deforestation embedded in its agricultural inputs is missing a potentially large share of its actual climate impact.

Which companies need to report FLAG emissions?

Not every business will have material FLAG emissions, but the scope is broader than many assume.

The SBTi requires companies to set separate FLAG targets if they meet either of the following criteria: - They operate in a designated FLAG sector - FLAG emissions account for more than 20% of their total Scope 1, 2, and 3 footprint

Designated FLAG sectors include food and beverage processing and retailing, agricultural production, forestry, timber, rubber, pulp and paper, and tobacco. Companies in these sectors must engage with FLAG guidance regardless of their emissions profile.

Other sectors that frequently cross the 20% threshold include apparel and textiles (particularly those using natural fibres such as cotton, wool, or leather), restaurants, construction and building materials, containers and packaging, and retailers with significant food or agricultural product ranges.

The practical implication is that a company outside the designated FLAG sectors still needs to measure its FLAG emissions to determine whether the 20% threshold applies. For some businesses, particularly those with animal-derived or crop-based inputs in their supply chain, FLAG emissions represent more than half of their total footprint once properly calculated.

How does FLAG target-setting work under SBTi?

Companies required to set FLAG targets must do so alongside their non-FLAG science-based targets. Companies submit and validate the two targets separately, which means a company cannot meet its SBTi obligations by setting a single combined target.

The SBTi offers two target-setting pathways depending on a company's position in the value chain.

Supply-side companies (those that produce agricultural commodities directly, with FLAG emissions in Scope 1 and 2) can use commodity-specific pathways. The SBTi has defined decarbonisation intensity rates for 11 commodities: beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, timber, and wood fibre. Alternatively, they can set an absolute reduction target across all FLAG emissions.

Demand-side companies (those that use FLAG commodities as inputs but do not produce them) must set an absolute reduction target applied to all FLAG emissions in their value chain.

All companies subject to FLAG requirements must also commit to a zero deforestation target with a deadline no later than the end of 2025.

On timelines: any company setting or updating SBTi targets from April 2023 onwards must include FLAG targets if eligible. Companies with validated near-term targets set after January 2020 but before April 2023 had to add FLAG targets by the end of 2024.

Where do FLAG emissions sit within a GHG inventory?

For most companies outside of primary agriculture, FLAG emissions appear predominantly in Scope 3, particularly within Category 1 (purchased goods and services) and Category 11 (use of sold products). A food retailer's FLAG emissions, for example, will largely sit in the upstream supply chain embedded in the agricultural commodities it buys.

For companies with their own farming or forestry operations, FLAG emissions can also appear in Scope 1, covering on-site land management activities such as livestock herds or managed forests.

Under the GHG Protocol LSRG, companies must report land use change emissions, land management emissions, and land removals as separate line items within their inventory. Companies cannot aggregate them into a single figure. This level of disaggregation is more demanding than standard Scope 3 reporting, and it requires either activity-level data (such as commodity volumes and sourcing locations) or statistically-derived estimates where primary data does not exist.

For companies working through this process, having a carbon accounting platform that can handle the separation of FLAG and non-FLAG emissions within Scope 3 categories reduces the risk of double-counting or misclassification. Seedling supports full Scope 1, 2, and 3 measurement aligned with the GHG Protocol, including the data capture needed to identify where FLAG emissions are likely to be material in a company's footprint.

The land sector also holds significant mitigation potential: estimates suggest it could contribute around 30% of the global emissions reductions needed by 2050 to stay within 1.5°C (ClimatePartner, citing IPCC). That makes accurate FLAG measurement not just a compliance requirement, but a genuine input into any credible decarbonisation plan.