Why the standard target-setting model breaks down for land-intensive sectors
Most science-based target methodologies were built around a simple story: emissions come from burning fossil fuels, and companies decarbonize by switching energy sources, improving efficiency, and cleaning up their supply chains. That story works reasonably well for a manufacturer or a software company. It works poorly for a company whose largest emissions source is a cattle ranch, a palm oil plantation, or a wheat field.
In agriculture, forestry, and land-intensive supply chains, the dominant emissions aren't from a boiler or a delivery truck. They come from land-use change (clearing forest for cropland), soil carbon loss, methane from livestock and rice paddies, and fertilizer-related nitrous oxide. These emissions behave differently than fossil fuel emissions in one crucial way: land can also be a carbon sink. A standard target framework that only asks a company to reduce emissions has no good way to account for a company that is also restoring degraded land or protecting standing forest. That gap is what SBTi's Forest, Land and Agriculture (FLAG) guidance was built to address.
What FLAG actually is
FLAG is a distinct target-setting track sitting alongside the standard SBTi corporate methodology, not a replacement for it. Companies whose value chains involve significant land-based activity are expected to assess whether FLAG applies to them, and if it does, to set FLAG-specific targets covering their land-related emissions and removals in addition to a conventional target covering their fossil fuel and industrial emissions.
The practical effect is that a food, agriculture, apparel, paper, or forestry company ends up managing two parallel decarbonization pathways rather than one blended number. The fossil-energy pathway looks like target-setting in any other sector: reduce Scope 1 and 2 emissions from operations, address Scope 3 emissions tied to energy, transport, and purchased inputs. The FLAG pathway is built specifically around land: emissions reductions from changed agricultural practices, avoided land conversion, and, distinctly, carbon removals from activities like reforestation or improved soil management.
Why this matters for Scope 3 reporting specifically
For most companies where FLAG applies, the land-related emissions sit almost entirely in Scope 3, not Scope 1 or 2. Under the GHG Protocol's category structure, this shows up most heavily in Category 1 (Purchased Goods and Services), since raw agricultural commodities and land-derived inputs are purchased goods. It can also touch Category 4 (Upstream Transportation and Distribution) for bulk commodity logistics, and in some supply chains Category 15 (Investments) where a company has financial stakes in land-based operations.
This is a category where the data quality hierarchy — spend-based, average-data, hybrid, supplier-specific — matters enormously and is unusually hard to climb. A spend-based estimate for a tonne of purchased soy tells you almost nothing about whether that soy came from a long-established farm or from land cleared five years ago. Average-data approaches using regional or commodity-level emission factors are the current default for most companies, but they blur the difference between a supplier doing genuine land stewardship and one contributing to active deforestation. Getting to supplier-specific data for FLAG categories typically requires traceability systems that can tie a shipment back to a specific farm, plantation, or region — a much heavier lift than supplier engagement for manufactured goods.
The deforestation commitment sits underneath the numbers
FLAG target-setting is generally paired with a no-deforestation or no-conversion commitment applied to a company's primary land-based commodities, independent of the emissions math. This matters because a company could, in theory, hit a numeric FLAG target while individual suppliers continue converting natural ecosystems, if the reductions elsewhere in the portfolio offset that impact on paper. The deforestation commitment closes that loophole by making land conversion a pass/fail condition rather than something that gets averaged away.
What this means in practice
For a company evaluating whether FLAG applies, the first job isn't target-setting — it's figuring out how much of the emissions inventory is genuinely land-related versus energy-related, which requires a properly categorized Scope 3 inventory before anything else. Companies that have only ever run a spend-based screening exercise usually cannot answer this question with confidence, because spend-based factors don't distinguish land-use change emissions from ordinary agricultural production emissions.
The sequencing that tends to work is: build a categorized inventory that separates land-related emissions from energy-related ones, identify which suppliers and commodities carry land-use change risk, then decide whether a FLAG target track is warranted and what baseline year and data sources it should use. Skipping straight to target-setting without that groundwork tends to produce numbers that look precise but rest on data too coarse to support the claims being made.
Companies in food, agriculture, forestry, or land-intensive apparel and materials supply chains who are working through this sequencing, or who need a properly categorized Scope 3 inventory as a starting point, can reach the research desk at carbon@digi.ai.in.