As sustainability regulations tighten and businesses aim to reduce their carbon footprint, FLAG emissions have become a critical topic in climate reporting. FLAG, which stands for Forest, Land, and Agriculture, refers to emissions generated from land use change, agricultural practices, and carbon removals within the land sector.
For food businesses, FLAG emissions represent a significant portion of Scope 3 emissions—particularly in purchased goods and services (Scope 3, Category 1)—and require careful measurement and management.
Today, we will break down what FLAG emissions are, why they matter, and how food businesses can track and reduce them, ensuring compliance with sustainability standards such as the Science Based Targets initiative (SBTi) and the GHG Protocol.
What Are FLAG Emissions?
FLAG emissions encompass three primary categories:
1. Land Use Change (LUC) Emissions
• Emissions resulting from converting natural landscapes into agricultural land.
• Includes deforestation, soil carbon loss, and habitat conversion.
• Example: Clearing forests for crop production.
2. Land Management (Non-LUC) Emissions
• Emissions from agricultural production, including fertilizer application, livestock digestion (methane emissions), and fuel use in farm operations.
• Includes biogenic CO₂, N₂O (nitrous oxide), and CH₄ (methane) emissions.
3. Carbon Removals and Storage
• Refers to sequestration activities, such as agroforestry, soil organic carbon enhancement, and afforestation.
• While removals can be accounted for in FLAG reporting, they are subject to strict criteria outlined by the GHG Protocol’s Land Sector and Removals Guidance.
Why Are FLAG Emissions Important for Food Businesses?
Food businesses, including restaurants, caterers, food manufacturers, and hospitality companies, are heavily dependent on agricultural supply chains, making FLAG emissions a key contributor to their overall carbon footprint.
1. FLAG Targets Are Now Required for SBTi Validation
Companies that set Science-Based Targets (SBTs) and have a significant portion of emissions from FLAG-related activities must also set a FLAG-specific target.
Who must set FLAG targets?
• Companies in FLAG-designated sectors, including food production, processing, and retail.
• Businesses where FLAG emissions account for 20% or more of their total emissions across Scopes 1, 2, and 3.
Who is exempt?
• Small and medium-sized enterprises (SMEs) unless their FLAG emissions are substantial.
• Companies with less than 5% FLAG emissions relative to their total footprint.
2. Alignment with the GHG Protocol and CSRD Requirements
While FLAG target-setting is voluntary, food businesses operating in the EU must comply with the Corporate Sustainability Reporting Directive (CSRD), which requires clear emissions reduction targets. The GHG Protocol’s updated guidance for land-sector emissions is expected to introduce additional reporting requirements in 2025, making it essential for food businesses to track FLAG emissions now.
3. Business Resilience and Competitive Advantage
• Many corporate buyers and investors are prioritizing suppliers that have set FLAG targets.
• Setting a FLAG target improves brand reputation, enhances investor confidence, and strengthens regulatory compliance.
• Sustainable agricultural practices can also lead to cost savings and increased efficiency.
How to Measure and Report FLAG Emissions
FLAG emissions are part of Scope 3 (Category 1: Purchased Goods & Services), meaning that food businesses need to collect supplier data and use an emissions accounting tool.
SBTi FLAG Tool: How It Works
The SBTi FLAG tool helps businesses determine their FLAG baseline and reduction targets. However, it does not calculate emissions or track progress—it simply provides the required percentage reduction targets based on inputted values.
What the SBTi FLAG tool does:
• Accepts FLAG emissions data as input.
• Generates science-based reduction targets.
• Validates emissions reduction pathways.
What it does not do:
• Calculate baseline FLAG emissions.
• Provide strategies for emissions reduction.
• Track emissions over time.
For food businesses looking for a more comprehensive approach to FLAG accounting, a dedicated carbon accounting platform is required.
How Klimato Helps Businesses with FLAG Emissions
Klimato offers food businesses an integrated approach to FLAG emissions tracking, enabling them to:
• Calculate FLAG emissions from food procurement data (Scope 3, Category 1).
• Differentiate between FLAG and non-FLAG emissions in sustainability reports.
• Track emissions reduction progress and develop a mitigation strategy.
• Fill out the SBTi FLAG tool on behalf of clients (for those seeking validation).
By leveraging Klimato’s tools, food businesses can ensure accurate FLAG emissions reporting while identifying opportunities for emissions reduction and cost savings.
Key Takeaways
FLAG emissions are a crucial aspect of food business sustainability reporting, especially as companies with significant FLAG-related emissions must set FLAG targets if they join the SBTi. With upcoming regulations, such as the CSRD and GHG Protocol updates, businesses may be required to provide more detailed reporting on land-use emissions. Klimato supports food businesses in measuring, reporting, and reducing FLAG emissions, ensuring alignment with both corporate sustainability goals and regulatory requirements.
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