The wait is finally over. For years, companies with significant land-based footprints, spanning food and beverage, apparel, cosmetics, and pharmaceuticals, have operated in a state of flux, relying on draft guidance to account for their most complex land use emissions. In January 2026, the Greenhouse Gas Protocol (GHGP) officially released the final Land Sector and Removals Standard (LSRS).
This standard is a landmark moment for corporate sustainability and global climate change action. It establishes the rigorous rules required to account for, report, and track greenhouse gas (GHG) emissions and CO2 removals from land management, land-use change, and carbon removal technologies. With an effective date of 1 January 2027, 2026 has become the gap assessment year, a vital window for sustainability professionals to align their inventories and ensure their decarbonisation strategy is audit-ready for net zero.
To help you navigate this 100+ page framework, South Pole experts recently hosted a practical webinar exploring a real-world (yet "unreal") supply chain journey. You can watch the on-demand webinar here to see how these rules apply in practice.
Below, we have distilled the 15 most pressing questions asked by the audience regarding Scope 3 and land-based carbon accounting.
The LSRS provides the foundational carbon accounting rules that companies use to calculate their land-based emissions and CO2 removals. These calculations serve as the prerequisite basis for tracking performance and setting credible corporate climate targets under the SBTi FLAG (Forest, Land and Agriculture) framework.
Under the new draft of the SBTi Corporate Net-Zero Standard (CNZS) v2.0, companies must strictly align their land-based emissions and removals with the LSRS. A key change to watch: the final version of CNZS v2.0 will decide if near-term FLAG targets stay as absolute reductions or shift toward intensity or volume-alignment models.
It moves us away from national averages toward Land Management Unit (LMU) precision. To claim the benefits of a low-carbon intervention, you must prove physical traceability to at least the sourcing region, ideally the exact land area. If you cannot track a product back to its source, you are forced to use regional averages, which precludes you from seeing the impact of your investments. Furthermore, the LSRS introduces mandatory reporting for high risk land carbon leakage emissions caused elsewhere because your activities displaced food production.
In most cases, yes. To ensure that your progress is measured accurately, you will likely need to recalculate your base year emissions. This ensures your baseline is categorised in the same way as your future reporting, providing a consistent like-for-like comparison over time.
The LSRS requires that purchased carbon removal credits be reported separately from your physical GHG inventory; they cannot be subtracted to lower your reported footprint. For durable removals, such as Technological CO2 Removals (TCDR) with geologic storage, there are high data requirements, including full cradle-to-grave life cycle accounting and physical traceability from capture to injection.
Furthermore, SBTi CNZS v.2.0's ongoing emissions responsibility framework introduces the requirement that durable removals represent at least 41% of the removals portfolio used to achieve net zero in 2050. This provides a strong demand signal.
The LSRS uses inventory accounting, not project-based accounting. This means that instead of simply subtracting the estimated savings of a specific project, you integrate improvements through updated emission factors, or removal factors, that are tied directly to the volumes of goods you procure.
Setting up traceability involves a combination of digital tracking, updated supplier contracts that specify data-sharing, and collaborative industry monitoring. Companies can also use independent registries to manage claims and third-party verification to safeguard against double-counting.
You can define your sourcing region using transport data, such as shipping logs that show the maximum distance materials travel from farms to an elevator or processing facility. If several facilities are located near each other, their individual sourcing areas can be combined into a single, continuous spatial boundary.
These serve different functions. A Supply Shed is a group of suppliers in a specific area from which you source. Book and Claim decouples environmental benefits from the physical product. To report lower emissions within your physical GHG inventory, you must have physical traceability. If that is not possible, you might treat the contractual right you have to an outcome as a Market-Based Mechanism (MBM) and report the verified outcome in a separate market-based inventory.
The general recommendation is a limited level of assurance for inventory reporting. However, if you are transferring impact units or verified claims to other actors in the supply chain, reasonable assurance is recommended to maintain the credibility of the data. Moving up assurance levels can be an improvement journey made over time.
A robust plan includes regular intervals during the active intervention and simplified tracking afterward to ensure permanence. Monitoring must be consecutive and sequential (for example, renewed five- or ten-year periods, respectively) to ensure carbon is tracked across all years.
The most effective approach is to implement a formal monitoring plan, such as a land management plan, that details spatial boundaries and sampling methods. Companies must also use a reserve approach or buffer pool, where a portion of removals is set aside to cover potential reversals, such as forest fires or changes in management.
Under Requirement 13 of the LSRS, you must report land carbon leakage if your activities carry a high risk of displacing food production. This includes using agricultural products for non-food purposes (like biofuels) or changes in management that lead to significant, long-term reductions in crop yields.
While accuracy must be balanced with cost, you should prioritise higher-tier, supplier-specific emission factors (Tier 2 or 3) over default averages. Tracking progress toward Science Based Targets is most effective when the data reflects the actual realities of your supply chain.
While the current LSRS does not apply directly to forestry systems, it does provide guidance for agroforestry, silvopasture, and land-use change from natural forests. In the interim, the GHGP advises transparency regarding your chosen methodology.
Smaller organisations can access these solutions through collective action and co-investment with others in the same region. They can also work with aggregators and intermediaries who provide the necessary monitoring and verification infrastructure.
The release of the LSRS marks a transition from general guidance to a clear, actionable standard. The 2026 gap assessment year offers a valuable window for sustainability professionals to review their data systems, engage with suppliers, and refine their reporting structures. By embracing these changes now, organisations can move toward 2027 with confidence, ensuring their decarbonisation journey is built on a foundation of data rigour and transparency.
Depending on your current progress, here are the recommended next steps to align with the LSRS:
Curious to learn more about this? Get in touch with our land sector experts to explore how you can develop a resilient supply chain strategy by integrating LSRS-compliant accounting into your decarbonisation plans.
