Companies in the Forest, Land use and Agriculture (FLAG) sector have a new bar for what real ambition looks like when it comes to climate action.
Momentum towards a net zero future was bolstered again by the launch of the FLAG sector guidance on corporate climate target setting, released by the Science Based Targets initiative (SBTi). This guidance will play a crucial role in the accounting of land-related emissions and removals, so we've put together our digest of its key implications and the anticipated challenges for FLAG companies – but also why it will pay off to invest time and resources to align with these new requirements.
The FLAG sector generates roughly 25% of annual greenhouse gas (GHG) emissions globally, with around half coming from agricultural production and half stemming from other land use activities, deforestation and forestry . Yet, only few companies currently account for these emissions in their baseline and related targets, which the Greenhouse Gas Protocol largely attributes to a lack of available standards, data and methods.
The release of the guidance thus marks a significant moment for companies with direct or indirect links to land-intensive activities: they now have clear recommendations on the annual reductions they need to make to align with the goals of the 2015 Paris Agreement and to limit average global temperature rise to 1.5ºC above pre-industrial levels .(“pre-industrial" meaning the period 1850–1900 on which scientists base comparisons).*
So, if you're within the FLAG sector, what do you need to know? We've handpicked the most noteworthy requirements:
Our team in the Agricultural Value Chain practice is sensitive to these challenges. We've even begun working with our existing clients to build scope 3 GHG inventories that distinguish between FLAG and non-FLAG emissions and account for land use change and carbon removals within supply chains. We're also helping our customers navigate the issue of upstream emissions, which we recommend they address by using supplier engagement strategies and capacity building workshops.
Until now, if you're a company with a footprint in the FLAG sector you'll have struggled to measure the impact of your footprint. That also means you'll have found it hard to address these emissions through activities that drive reductions.
Fortunately, the new FLAG guidance makes this easier, allowing companies like yours to go beyond measures that only reduce emissions: if you have activities within your supply chain that help permanently
remove emissions from the atmosphere, you will, for the first time, be able to count these towards your overall corporate GHG emission reduction target – but only if these carbon removals happen within your supply chain and provided that they are not sold as certified carbon removals on the carbon market.
There are multiple actions that companies can already start taking to slash their overall carbon emissions, for example:
Does your company belong to the FLAG sector? If you're in the process of building your GHG inventory or have already defined a baseline, we recommend that you start differentiating between FLAG and non-FLAG emissions so that you are ready to set FLAG targets as the SBTi guidance is refined.
This recent South Pole report describes how businesses should implement, measure and track climate action to meet their climate commitments.