SBTi has designated companies in the following industries as FLAG sectors:

Food Products: Livestock, Agriculture, Food & Beverage Production, Processing and Retailing

Forest and Paper Products: Forestry, Timber, Rubber, Pulp & Paper

Tobacco

While the above sectors are required to comply with SBTi’s FLAG guidance, there are a variety of other industries that may fall into the second criteria of having >20% of their overall emissions come from land-based emissions:

Apparel: Textiles, Fashion, Luxury
Consumer Goods: Household and Personal products, Beauty
Retail & Distribution:
Packaging:
Food Services & Hospitality: Restaurants, Entertainment, Hotels, Catering
Rubber Products: Tires, Shoes
Built environment: Building materials, Construction

For companies in this second list of industries, we recommend measuring the FLAG emissions in your Scope 3 to determine how material FLAG is to your overall Company footprint.

Companies with validated science-based targets that are required to submit a FLAG target (see page 15 of the SBTi FLAG Guidance), must do so within six months of the final GHG Protocol Land Sector and Removals Guidance release.

Companies setting science-based targets for the first time, or updating their existing targets, must set a FLAG target upon (re)submission - using the draft GHG Protocol Land Sector and Removals Guidance. This requirement also applies to companies submitting net-zero targets.

If your organization stands to be impacted by the FLAG, there are many ways to get ready and ensure that your target becomes validated. First, companies should learn about no-deforestation commitments and take steps that eliminate deforestation by the end of 2025. Companies should take a comprehensive mapping of their Scope 3 or Supply Chain emissions, and engage suppliers that have the potential of contributing high FLAG emissions to gather primary data. Lastly, companies should explore the eligible FLAG sector removal projects that exist within their value chain.

First, FLAG removals can only be counted against FLAG emissions. They cannot be 'netted out' against non-FLAG emissions.

How you use and claim the removals (for abating your own FLAG emissions or selling through the Voluntary Carbon Market) is up to you. You don’t have to use your removals for your FLAG emissions. They can be sold as credits, but they must be certified.

Currently, claiming FLAG removals for your own emissions (i.e. Carbon insetting) does not need a certification but still has strict requirements. See the principles specific to accounting for credited emission reductions or removals on page 22.

Companies from the financial sector are required to set FLAG targets if their FLAG-related emissions account for 20% or more of their overall emissions.

This depends on where your emissions occur.

LUC calculations within Scope 3 (Purchased Goods and Services)
We would estimate the LUC emissions based on the emission factors used. For example, if you purchased palm oil, you would multiply the activity volume (e.g. Litres of palm oil procured) by the emission factor for palm oil (e.g. Palm oil production).

This emission factor would include the estimated LUC emissions occurring within the Cradle-to-Gate life cycle of that palm oil, using a methodology known as Statistical LUC or sLUC.

Our Emission Factor Disaggregation Methodology can single out and disaggregate the LUC emissions that occur, something that current databases are unable to do.

LUC calculations for Scope 1 & 2
A possible method is to perform Direct Land Use Change (dLUC) calculations using the GHG Protocol Land Sector & Removals Guidance (GHGP LSRG, Part 2). This process involves using IPCC methodologies to model LUC emissions. We can support you throughout this process, and plan to incorporate it into our platform in the future.

Methane (CH₄) and Nitrous oxide (N2O) emission from biomass combustion
Unlike CO₂ emissions, the combustion of biomass results in net additions of CH₄ and N₂O to the atmosphere, and emissions of these two greenhouse gases as a result of biomass combustion are accounted for under Scope 1 and shown on the Terrascope platform.

Biogenic CO₂ (Out-of-scope)
Direct CO₂ emissions from the combustion of biomass are called “biogenic carbon” and are considered part of the natural carbon cycle, as they represent the return of carbon that was originally removed from the atmosphere by photosynthesis. Under the GHG Protocol, biogenic CO₂ emissions should be accounted for separately outside Scope 1, 2, and 3 (out-of-scope). Currently, this emission is calculated separately and not shown on the platform.

The various types of emissions that are connected to the use of fertilizers are: 

1. CO₂ and NO₂ emissions from the production of fertilizer

2. Direct NO₂ emissions from the soil due to fertilizer application

3. Indirect NO₂ emissions from leaching, runoff and volatilization 

In short, emissions from fertilizer production and application are considered FLAG, but not transportation of fertilizer to farm