How to set SBTi FLAG targets – The Food Edition

The food sector is under the spotlight in the fight against climate change, and businesses tied to agriculture and land use are facing mounting pressure to act. Enter SBTi FLAG—a specialized guidance offering a clear pathway to reduce land-based emissions while protecting natural resources.

In this blog post, we’ll explore how your company can move beyond vague commitments and set clear, science-based targets that deliver real impact.

Let’s dive in!

What is SBTi FLAG?

SBTi FLAG refers to the guidelines released by the Science-Based Targets initiative (SBTi) to help companies in forestry, land, and agriculture set science-based targets for reducing their environmental impact. These industries are critical to climate action, as they account for 22% of global GHG emissions.

Companies must separately account for land-related emissions and carbon removals, ensuring transparency and accuracy in their climate strategies.

The framework also requires businesses to achieve zero deforestation by 2025 at the latest and adopt sustainable land management practices to reduce emissions from soil degradation, fertilizer use, and livestock production—key steps in limiting global warming to 1.5°C.

🪢 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

Why the food sector can’t ignore SBTi FLAG

SBTi’s Guidance is a call to action for food companies to address emissions where they matter most. Here’s why taking action now is essential.

– Cost efficiency: Implementing SBTi FLAG-aligned strategies can significantly reduce operational costs. By cutting excess inputs like synthetic fertilizers and water while enhancing soil health and crop yields, companies can improve productivity and boost profitability in the long term.

– Stronger supplier relationships and resilience: Addressing FLAG emissions fosters collaboration with suppliers on sustainable practices, reducing climate-related risks like extreme weather impacts, soil degradation, and water scarcity.

– Competitive advantage: As consumers, investors, and regulators push for transparent and measurable climate progress, SBTi FLAG empowers companies to meet these expectations, building trust and securing a competitive advantage in the market.

Which companies have to set SBTi FLAG targets?

Here’s a breakdown of which companies are required—or recommended—to submit SBTi FLAG targets.

Companies required to set FLAG Targets

The SBTi mandates FLAG targets for companies meeting either of the following criteria:

1. Operating in FLAG-designated sectors

Companies in the following industries must set FLAG targets.

– Forest and paper products: Forestry, timber, pulp and paper, rubber
– Food production: Agricultural production, animal source
– Food and beverage processing
– Food and staples retailing
– Tobacco

2. FLAG-related emissions total 20% or more of overall emissions

Businesses where emissions from land use, deforestation, or agriculture account for at least 20% of total Scope 1, 2, 3 emissions are also required to set FLAG targets.

Companies recommended to set FLAG Targets

Companies with FLAG-related emissions below the 20% threshold are encouraged to set FLAG targets voluntarily. However, if no FLAG target is set, they must still include FLAG-related emissions in their overall energy/industry (non-FLAG) target boundary to ensure a complete greenhouse gas inventory, and target coverage.

What about SMEs?

Small and Medium-sized Enterprises (SMEs) are generally not required to set FLAG targets.

To be classified as eligible for the tailored target-setting route, companies must meet certain criteria:

– Have less than 10,000 tCO2e across Scope 1 and location-based Scope 2 emissions.

– Not be classified in the Financial Institutions (FIs) or Oil & Gas (O&G) sectors.

– Not be required to set targets using sector-specific criteria (e.g., not in a mandatory FLAG sector).

– Not be a subsidiary of a parent company that falls under the standard validation route.

– Meet at least three of the following: employ fewer than 250 employees, have a turnover of less than €50 million, have total assets of less than €25 million, and not be in a mandatory FLAG sector.

What are the FLAG target options?

The SBTi framework offers two main approaches for setting science-based targets: the sector approach and the commodity approach, both consistent with the 1.5°C global warming target.

1. FLAG sector approach

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

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.

Companies with a diverse portfolio, like grocers, are encouraged to use the general FLAG targets.

2. FLAG commodity approach

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

These include: Beef, chicken, dairy, leather, maize, palm oil, pork, rice, soy, wheat, timber & wood fiber.

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.

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.

🪢 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 setting FLAG science-based targets?

Tackling FLAG emissions is one of the most valuable steps food companies can take toward sustainability. Here’s how to get started.

1. Commit: Begin by registering online with the Science Based Targets initiative (SBTi) and submitting a letter of commitment to setting a FLAG science-based target.

2. Account: Create an inventory of your emissions. Separate your land-based (FLAG) emissions from your energy and industry emissions. Also account for any carbon removals associated with sustainable land management and reforestation.

3. Develop: Select the appropriate FLAG target-setting approach. Then, set emission reduction targets and align them with SBTi’s criteria to ensure they contribute to a 1.5°C future.

4. Submit: Present your FLAG target, along with energy and industry emissions targets, to the SBTi for official approval.

5. Communicate: Publicly share your FLAG science-based targets, including the base year, the target year, and the percentage reduction in emissions over the target period.

6. Disclose: Annually disclose your company-wide emissions, progress toward your FLAG target, and any updates.

Setting SBTi FLAG targets might seem like a daunting task, but it’s a critical step for food companies looking to reduce land-related emissions and align with global climate goals. With strict requirements and complex calculations, getting it right is essential.

With state-of-the-art tools and support, you can simplify the hardest parts—like the FLAG inventory—and focus on driving real change. We’ve got you covered!

Simplify your SBTi FLAG journey with CarbonCloud

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, it 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.

Lost in the SBTi FLAG target-setting process?

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