How CSRD, Scope 3, and SBTi Work Together: A Guide for Food Businesses

This article explains how each framework works, why they connect, and what that means practically for food and beverage companies navigating carbon accounting today. For a full guide to CSRD compliance requirements, see How to Prepare CSRD Reporting for Food Businesses. For a foundation on Scope 3 reporting methodology, see Sustainability Reporting for Food Businesses.

CSRD Sets the Reporting Standard

The Corporate Sustainability Reporting Directive introduces standardized sustainability disclosure requirements across the European Union. Under the European Sustainability Reporting Standards (ESRS), companies must report greenhouse gas emissions across Scope 1, 2, and 3 with a level of rigor comparable to financial reporting—auditable, consistent, and comparable across organizations.

What CSRD doesn't do is redefine how emissions are calculated. Its focus is on how information is disclosed, verified, and presented,  creating a common language for sustainability performance that investors, regulators, and supply chain partners can rely on. The GHG Protocol Corporate Standard and LCA-based methodologies aligned with ISO 14040, 14044, and ISO 14067 are what underpin the actual calculations that CSRD disclosures draw on.

Scope 3 Is Where Most Food Emissions Live

For food and beverage companies, 80–90% of total climate impact typically sits within the supply chain—agricultural production, land use, packaging, logistics, and waste—not in direct operations. That makes value-chain visibility essential, both for credible reporting and for identifying where reductions are actually achievable.

This is also where most food businesses encounter the hardest data challenges: gathering reliable ingredient-level emissions data, aligning procurement decisions with climate targets, and translating complex supply chain information into something auditable and actionable.

Spend-based Scope 3 estimates are permitted under GHG Protocol but don't provide the ingredient-level resolution that CSRD-grade disclosure or meaningful reduction planning requires. Activity-based calculation—using actual ingredient quantities multiplied by LCA-derived emission factors—is the methodology that produces data capable of supporting all three frameworks discussed here.

For more on building that data foundation, see Ingredient-Level Data for Accurate Scope 3 Reporting.

Where SBTi Fits Into the Picture

The Science Based Targets initiative provides a framework for setting emissions reduction targets aligned with climate science. Where CSRD focuses on disclosure, SBTi focuses on ambition—helping companies define credible reduction pathways rather than self-selected targets that may or may not be consistent with limiting warming to 1.5°C.

For food businesses, SBTi has introduced sector-specific guidance that makes target-setting significantly more demanding—and more meaningful—than a simple percentage reduction on a baseline year.

FLAG Targets and Why They Matter for Food Businesses

The Forest, Land, and Agriculture (FLAG) guidance under SBTi recognizes that food system emissions are structurally different from energy or transport emissions. Agriculture involves biological processes—methane from livestock, nitrous oxide from fertilizers, carbon stored and released in land—that require a separate accounting approach from fossil fuel combustion.

Under FLAG guidance, food businesses with significant agricultural supply chains must set separate targets for:

• Fossil fuel emissions, covered by standard SBTi corporate targets
• FLAG emissions—land-use, agricultural, and forestry-related emissions, requiring dedicated reduction pathways aligned with the global goal of halting deforestation and transitioning to regenerative land management

For most enterprise food businesses, FLAG emissions sit primarily in Scope 3 Category 1—the ingredient supply chain. That means the same ingredient-level carbon data that underpins CSRD Scope 3 disclosure is also what makes FLAG target-setting and tracking possible. The data foundation is shared; the reporting purposes are complementary.

For a full guide to FLAG emissions accounting, see FLAG Emissions: A Complete Guide for Food Businesses.

How CSRD, Scope 3, and SBTi Work Together

Rather than operating independently, these frameworks form a connected workflow:

The practical progression: measure emissions accurately using Scope 3 methodology aligned with GHG Protocol and ISO standards, report them consistently under CSRD's ESRS requirements, and use that verified data to set and track targets that meet SBTi's science-based criteria— including FLAG targets for agricultural emissions.

Each framework strengthens the others. CSRD reporting is more credible when it draws on robust, ingredient-level Scope 3 data. SBTi targets are more actionable when they're grounded in verified supply chain emissions rather than sector averages. And Scope 3 measurement is more purposeful when it's feeding into structured disclosure and defined reduction pathways rather than sitting in an internal spreadsheet.

Strategic Benefits of Aligning Reporting and Target Setting

When food businesses treat compliance as part of a broader carbon accounting strategy rather than a series of separate obligations, several advantages follow.

Reduced Regulatory Risk

Building structured reporting processes ahead of deadlines avoids last-minute data gaps, supplier challenges, and audit exposure as CSRD requirements expand through supply chains.

Operational Efficiency

Measuring Scope 3 emissions at ingredient level frequently reveals procurement inefficiencies—sourcing decisions, packaging choices, logistics patterns—where cutting emissions and cutting costs point in the same direction.

Stronger Procurement Positioning

Companies that can provide verified, methodology-documented emissions data are increasingly favored in tenders and supply chain partnerships, particularly across European markets where buyer-side CSRD obligations are creating demand for supplier-level data.

One Data Foundation, Multiple Uses

The most efficient approach is building ingredient-level carbon data once and using it across CSRD disclosure, SBTi baseline and target reporting, procurement conversations, and commercial sustainability claims. Fragmented data collection—one dataset for compliance, another for targets, another for tenders—creates duplication and inconsistency.

Building a Practical Reporting Workflow

Organizations that have successfully aligned CSRD and SBTi reporting typically follow a consistent sequence:

1. Establish a GHG Protocol-aligned baseline across Scope 1, 2, and 3, using activity-based data where possible for Category 1.

2. Map high-impact ingredients and suppliers to identify where Scope 3 data is weakest and where FLAG emissions are most concentrated.

4. Integrate emissions tracking into procurement workflows so data collection is ongoing rather than an annual exercise.

5. Translate data into ESRS-ready disclosures that meet CSRD verification standards, with documented methodology and auditable assumptions.

6. Use that same dataset to set and report against SBTi targets, including separate FLAG pathways where applicable.

The order matters. Organizations that attempt to set SBTi targets before establishing a reliable Scope 3 baseline frequently find themselves revising targets as data quality improves, which creates more work and undermines credibility with external stakeholders.

How Klimato Supports Integrated Carbon Accounting

Klimato's platform connects ingredient-level emissions measurement with the structured reporting outputs that CSRD and SBTi require. Specifically:

• Scope 1, 2, and 3 calculations aligned with GHG Protocol and ISO 14067
• Ingredient-level emission factors across 4,000+ products in 100+ countries, reviewed by IVL and validated against the Coolfood Methodology (WRI)
• ESRS-compatible reporting outputs for CSRD disclosure
• Baseline data structured to support SBTi target-setting, including FLAG category separation
• Integration with procurement and POS systems for ongoing data collection rather than point-in-time calculation

This enables sustainability teams to move from fragmented, framework-by-framework reporting toward a single carbon accounting workflow that serves CSRD, SBTi, and commercial purposes from the same underlying data.

FAQ: CSRD, SBTi, and Scope 3 for Food Businesses

Q: What is the difference between SBTi and CSRD?
A: CSRD is a regulatory framework that requires standardized sustainability disclosure. SBTi is a voluntary initiative that validates science-based emissions reduction targets. CSRD governs how you report; SBTi governs the ambition level of your reduction commitments. Most large food businesses operating in European markets will need to engage with both.

Q: Why is Scope 3 so important for food businesses specifically?
A: Agricultural production and ingredient supply chains typically represent 80–90% of a food company's total climate impact. Without Scope 3 data—and specifically ingredient-level Category 1 data—neither CSRD disclosures nor SBTi targets reflect where the majority of emissions actually sit.

Q: What are FLAG emissions and which food businesses need to account for them?
A: FLAG (Forest, Land, and Agriculture) emissions are those arising from agricultural production, land use, and forestry—including methane from livestock, nitrous oxide from fertilizers, and carbon released through land-use change. SBTi requires food businesses with significant agricultural supply chains to set separate FLAG reduction targets alongside their fossil fuel targets.

Q: Do food businesses need both CSRD compliance and SBTi validation?
A: Not necessarily simultaneously, but the frameworks are complementary. CSRD creates the disclosure obligation; SBTi provides the target-setting framework that gives that disclosure a credible trajectory. Many food businesses use CSRD reporting as the baseline infrastructure and SBTi as the ambition layer built on top of it.

Q: How does ingredient-level data support all three frameworks?
A: Activity-based, LCA-derived ingredient data is the shared foundation. It produces the Scope 3 Category 1 calculations that CSRD disclosure requires, the verified baseline that SBTi target-setting draws on, and the FLAG emissions breakdown that SBTi's agricultural guidance demands. Building that data once and applying it across all three frameworks is significantly more efficient than treating each as a separate data exercise.