SBTi FLAG Target Setting

Set a science-based emissions target on the land sector, separate from the one you set on energy and industry, so that a corporate net-zero pledge becomes a concrete obligation to change practice on the farms you buy from.

Also known as: SBTi Forest, Land and Agriculture targets; FLAG targets; land-sector science-based targets.

A FLAG target turns a vague net-zero pledge into a concrete, separately accounted obligation on the slice of a company’s footprint that lives on farms it buys from but does not own. It carries its own boundary, its own rules for crediting the carbon a farm pulls back out of the air, a binary no-deforestation gate, and a long-term reduction floor.

The operator-grade questions follow: which companies are required to set one, what falls inside the boundary, how a biogenic removal gets credited, and what no-deforestation means for a buyer building a transition program on the land it sources from.

Understand This First

• Carbon Insetting — the in-value-chain mechanism a FLAG target most often drives, and the home of the supply-shed boundary the target depends on.
• Soil Carbon Credits — the offset analogue FLAG forbids leaning on, with the additionality and permanence questions FLAG’s removal accounting inherits.
• Hidden Costs of Agrifood Systems — the broader land-sector externality FLAG prices one slice of.

Context

A FLAG target sits where a company’s public climate commitment meets the agricultural emissions buried in its Scope 3. A food manufacturer, retailer, cotton-sourcing apparel brand, or paper company commits to net zero and finds the land-sector share (fertilizer, manure, rice methane, processing, and the land-use change behind any cleared acre) too large for an energy-and-industry target to reach.

The SBTi requires land-intensive companies to set a FLAG target in addition to the energy-and-industry one, and the two ledgers do not net: no papering over fossil emissions with cheap land removals, no counting fossil reductions toward the land obligation. A target is required for forest, land, and agriculture production; food and beverage processing; food and staples retailing; and tobacco, plus any company whose FLAG-related emissions exceed twenty percent of its total Scope 1, 2, and 3 footprint.

Three commitments sit inside the target. The company sets a near-term reduction trajectory on land-management emissions. It commits to no-deforestation, aligned to the Accountability Framework initiative, with a cutoff of 2020 or earlier unless a later date is justified under the v1.2 rule. And it accepts a long-term floor: at least a seventy-two percent reduction in FLAG emissions by 2050.

Problem

The target structure has to do three things at once: capture fertilizer, manure, and land-use change; distinguish a reduction the company drives through practice change from a removal the land delivers on its own; and survive the scrutiny aimed at any climate claim.

It also has to resist two failure modes. Draw it too loose, so removals are counted generously, deforestation slips through, and a few adopting farms stand in for an unadopted shed, and the target is hit on paper while nothing changes. Draw it too rigid for the biology, booking a reversible soil-carbon removal as permanent or forcing a multi-year transition into one period, and the company either can’t meet it or games the timing.

Forces

• Separate ledgers versus one number. FLAG emissions are accounted apart from energy and industry, so a cheap land removal can’t be traded against an expensive fossil cut, even though a single net figure would be simpler to communicate.
• Reduction versus removal. A land-management reduction (less fertilizer, suppressed enteric methane) behaves differently from a biogenic removal (soil carbon, agroforestry, silvopasture), and FLAG counts them under different rules with different durability.
• No-deforestation as a gate versus a target. Not a percentage to chip away at but a binary cutoff aligned to 2020 or earlier, so one newly cleared acre can invalidate the claim regardless of progress elsewhere.
• Corporate obligation versus farm-level reality. The target lands on a balance sheet, but the work happens on land the company doesn’t control, so it only becomes real when pushed into supplier contracts and finance.
• Settled enough to design against versus still moving. Version 1.2 and the GHG Protocol standard give enough rules to build a program, not enough to treat the rulebook as frozen.

Solution

Set a separate, science-based FLAG target on the land sector, account land-management reductions and biogenic removals under their own rules, gate it behind a no-deforestation commitment, and push the obligation down into the supply chain through the instruments built to satisfy it. Four design choices decide whether the target drives real change or just paper progress.

Draw the boundary and keep it separate. The company inventories its land-sector emissions (land-management emissions from farming, land-use-change emissions from any conversion) and sets a near-term reduction trajectory distinct from its energy-and-industry target. This separation is the load-bearing rule: it forces the obligation to be met on the land rather than bought down with removals.

Distinguish the reduction from the removal. FLAG lets a company count biogenic removals (soil organic carbon, agroforestry, silvopasture, improved forest management), but only on a separate line and only when measured to a standard that survives audit. A fertilizer-emissions cut is durable; a soil-carbon stock can reverse, so keeping the two apart stops a reversible removal from being booked as permanent.

Treat no-deforestation as a gate, not a dial. Aligned to the Accountability Framework initiative with a cutoff of 2020 or earlier, no land in the supply shed may have been deforested or converted after that date. A cleared acre can’t be offset with a planted one; the requirement is that the conversion did not happen. That makes deforestation monitoring (satellite, supply-shed mapping, supplier attestation) a precondition of the target, and is where a FLAG commitment runs parallel to the EUDR regime.

Push the obligation down into instruments built to carry it. A target on a balance sheet does nothing until it reaches the farm. Carbon Insetting finances and claims the supply-shed reduction; Ecosystem-Service Payments pay suppliers for creditable removals; a Sustainability-Linked Loan can make the FLAG KPI a term of the company’s debt; and a Soil Carbon MRV Pipeline supplies the measurement that makes the claim defensible. The target is the obligation; these are the delivery system.

How It Plays Out

A food and beverage company setting its target. A consumer-goods food company sets a near-term FLAG target alongside its energy-and-industry one. It commits to no-deforestation in its palm, soy, cocoa, and dairy supply sheds back to a 2020 cutoff, builds satellite monitoring to evidence it, and funds practice change on supplier farms (cover cropping, reduced tillage, manure management, feed additives) reported through insetting. The target holds when reductions are measured across only the farms that adopted and removals sit on a separate line; it fails when extrapolated removals across an unadopted shed flatter it.

A company pulled in by the twenty-percent rule. A firm that thinks of itself as a beverage or apparel brand finds the emissions behind its cotton, sugar, or coffee push its FLAG-related share past twenty percent, so the rules require a target it hadn’t planned for. The obligation reaches a buyer with no agronomic staff, the one most likely to lean on purchased data and most in need of a disciplined MRV and insetting structure underneath it.

A lender wiring the target into debt. A bank structuring a sustainability-linked facility takes the verified FLAG trajectory as the loan’s KPI: hit the near-term milestone and the margin steps down, miss it and it steps up. The pledge becomes a covenant with a price attached, sharpening the incentive to push real practice change to suppliers rather than accumulate paper. The rules underneath keep moving: Version 1.2, applying to targets submitted from 2026, tightens the no-deforestation and timing rules and reflects publication of the GHG Protocol’s Land Sector and Removals Standard. A target designed against the 2024-vintage rules may need restating against the 2026 ones, with removals most likely to move, so build short of the edge of the current rules.

Consequences

Benefits. A FLAG target lands a separately accounted obligation on the land sector, where a food company’s largest and most ignored emissions live. It gives the farmer the most durable counterparty a transition can have: a buyer with a standing commercial relationship and a published target it is accountable for, not a one-off credit purchaser. And it gives the financier and program officer a clean line of sight from the commitment, through the mechanisms that deliver it, down to farm-level practice change and the MRV that proves it.

Liabilities. The removal line is the seam where a FLAG target leaks integrity: removals measured loosely and credited generously let a target be met on paper while nothing changes on the ground — the slide into Regenerative-Washing runs straight through it. The no-deforestation gate, binary and hard to fudge, still demands supply-shed mapping many companies don’t yet have, so a target can be set before it can be evidenced. The twenty-percent threshold pulls in buyers with no agronomic capacity, the ones most likely to lean on purchased data. And the rules keep tightening, so a program designed to the edge of the current treatment may be offside once Version 1.2 and the GHG Protocol guidance settle.

A FLAG target works as intended when the company applies all four design choices honestly: separate accounting, a monitored no-deforestation boundary, offset-grade tests on removals, and the obligation pushed into supplier finance and measurement rather than a spreadsheet. Outside those conditions it becomes a published target a critic can take apart, and the land it was meant to change stays unchanged.

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Sources

• The Science Based Targets initiative’s Forest, Land and Agriculture sector guidance is the standard-setting source for the FLAG framework used here: the separate land-sector target, the required sectors, the twenty-percent threshold, the no-deforestation commitment, and the seventy-two-percent-by-2050 long-term floor.
• The SBTi’s FLAG Guidance documents the Version 1.2 rules applying to targets submitted from 2026 and the separation of land-management reductions from biogenic removals.
• SBTi’s March 2026 Version 1.2 update and main changes document explain the revised no-deforestation target language, the 2026 submission rule, and the alignment with the GHG Protocol Land Sector and Removals Standard.
• The Accountability Framework initiative supplies the no-deforestation and no-conversion definitions and the cutoff-date guidance FLAG’s deforestation commitment is aligned to.
• The GHG Protocol’s Land Sector and Removals Standard is the corporate-accounting standard FLAG tracks for how land-sector emissions and removals are quantified, reported, and separated by spatial boundary and traceability.
• The SBTi’s Net Zero Corporate Standard sets the broader target architecture into which a FLAG target fits, including the rule that land-sector and energy-and-industry targets are accounted separately and not netted.