How to set SBTi FLAG targets – The Food Edition

SBTi FLAG Forest land and agriculture targets

The Forest Land and Agriculture Guidance from SBTi had retailers and food producers on the edge of their seats until its release in September 2022. Since April 2023, SBTi FLAG targets are a requirement and the deadline to submit is close. Retailers and food & beverage producers committing to SBTi from this point onwards or with near-term targets approved before 2020, must submit FLAG targets by the end of 2023, while retailers and producers with near-term targets approved after 2020 have until the end of 2024 to submit their FLAG targets. 

What is SBTi FLAG?

SBTi FLAG is guidelines released by the Science-Based Targets initiative on how to set emissions reduction targets for activities along their value chain that involve forestry, land use and agriculture, which amount to 22% of global emissions. SBTi FLAG targets cover the portion of emissions until farm gate and they are required for companies with activities in agriculture, animal sourcing, food processing, and food retail – or companies with over 20% of FLAG-related emissions in Scopes 1, 2, 3.

🪢 Do you have a high-level overview of SBTI?
Check out our complete guide to Science-based Targets Initiative (SBTi) and watch our webinar, SBTi FLAG for the food industry: How to get ready

What are the FLAG target options?

FLAG targets are divided into two sets:

Whole-sector approach

The whole-sector approach involves reducing emissions from FLAG-related products and activities altogether.

Whole-sector targets may be near-term, covering the next 5-10 years or long-term targets to reduce at least 72% of FLAG-emissions by no later than 2050.

The threshold is emissions reduction of minimum 95% for Scopes 1 + 2 targets and emissions reduction of at least 2/3 of emissions for Scope 3 targets.

Near-term FLAG targets are set in a separate tool provided by SBTi while long-term targets presently apply only to emissions from agriculture in the “Net-zero tool” that covers general targets.

Guidance for long-term forestry emissions will be released later on however, all companies committing to FLAG-targets by default also commit to zero deforestation by 2025, at the latest.

Commodity approach

The commodity approach involves emissions from 11 major commodities with a high carbon footprint.

The 11 commodities are: Beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, and timber & wood fiber.

In general, companies with a diverse portfolio, like grocers, are encouraged to use the general FLAG targets. However, retailers and food & beverage producers may use the commodity approach, which is available for companies serving end-consumers or companies with more than 10% of their FLAG emissions in one commodity but are not required to do so.

Lastly, commodity targets can be in absolute terms, reducing emissions by a fixed amount e.g. 20% reduced emissions from beef by 2030, or in terms of intensity, reducing emissions relative to an economic or operative unit, e.g. 20% reduced emissions per frozen burger sold by 2030.

🪢 Still untangling the world of ESG reporting and standards?
Check out our complete guide to ESG reporting: Navigating ESG frameworks & requirements

How do I go about submitting SBTi FLAG targets?

For food industry players submitting SBTi targets now, FLAG targets are set alongside the general emissions targets – what SBTi calls the cross-sector pathway. Companies in the food industry with already approved SBTi targets will need to submit just FLAG targets using the FLAG tool for near-term targets and the Net-Zero tool for long-term targets.

The most resource-consuming yet most valuable task for retailers submitting FLAG targets is the greenhouse gas inventory for FLAG emissions. This inventory includes the collective GHG emissions of all food and beverage products until farm gate and will serve as the emissions baseline.

The FLAG inventory is usually particularly taxing as it requires:

  • Complete measurement of emissions localized to the full product assortment,
  • Per-gate separation of these emissions visualized in percentage as well as in weight of CO2e.
  • For companies deciding to take the commodity route, a per-ingredient calculation and per-gate separation of emissions for each commodity.

Nevertheless, the FLAG inventory is your detailed map that speeds up setting impactful and compliant FLAG targets.

Keen to simplify the measurement and segmentation process and jump straight to the value, we provide your FLAG inventory and a per-gate segmentation straight out of the box, with metrics conforming to the GHG Protocol Product Standard and ISO 14067 as requested by SBTi.

We hope this SBTi FLAG guidance helps sheds some light in how you can prepare for setting the targets for your companies.

Lost in the SBTi FLAG target-setting process?

Reach out to CarbonCloud to simplify your FLAG targets and prepare for SBTi reporting!