They are covered by the FLAG (Forest Land and Agriculture Guidance), version 1.1 of the initiative, which was released in December 2023. Several members of GRSB were involved in the formulation of and consultations around the guidance.
The FLAG guidance was released in response to a lack of applications from agricultural and connected companies because of the difficulties involved in accounting for the emissions sources and sinks in agriculture.
Since agricultural supply chains include multiple sources of emissions and a variety of gasses (methane in particular for beef, as well as nitrous oxide), that are, again, mostly Scope 3, accounting for them accurately is extremely difficult.
Agriculture, Land and Forestry are the only sectors that can also contribute to removals, but once again this is complicated by the fact that removals are not necessarily permanent. Soil carbon fluctuates depending upon multiple factors, which are not all under the control of the land manager, and forest carbon stocks are also susceptible to change, for example, through fire.
Even the Amazon is now a net source of emissions, highlighting the urgent need to halt deforestation.
What is included in this FLAG guidance? Many of you who are working on SBTi will be very familiar with it. Unfortunately it does not make it simpler for companies with agricultural supply chains to account for emissions, but it does set out the expectations. For those who had set targets before the release of this guidance, it may result in some of them having to reset their level of ambition.
From SBTi's webpage:
- Set near-term FLAG science-based targets: 5-10 year emission reduction targets in line with limiting warming to 1.5°C.
- Account for removals in near-term FLAG science-based targets: Biogenic CO2 removals include things like restoring natural ecosystems, improving forest management practices, deploying silvopasture, and enhancing soil carbon sequestration on pasture and farmland. Read more on how this guidance accounts for land-use change emissions here.
- Set long-term FLAG science-based targets: Companies with significant activities in the land and agriculture sectors will reduce at least 72% of emissions by no later than 2050. They should use the SBTi Net-Zero Standard to set long-term FLAG science-based targets.
- Zero deforestation targets must be set for no later than 2025: In line with the Accountability Framework initiative (AFi). Read more on how this guidance accounts for land-use change emissions here.
- Set science-based targets for fossil emissions: Businesses with land-based emissions are required to set FLAG science-based targets FLAG science-based targets AND energy/industry science-based targets, since all companies produce fossil emissions.
An unfortunate, but unmentioned reality is that current fossil fuel use on its own will take the world beyond 1.5° C of warming, but that does not mean that agricultural supply chains should be less ambitious. Indeed, as one of the few sectors capable of sequestering carbon, the land sector as a whole needs to be more ambitious, while we divest from fossil fuels as fast as possible.
The zero deforestation commitment included in this target is as follows:
"[Company X] commits to no-deforestation across its primary deforestation-linked commodities, with a target date of [no later than December 31, 2025]."
"For this target language, no-deforestation target date refers to the date by which a company (or other entity) intends to have fully implemented its commitment or policy. The most critical deforestation-linked commodities are beef, palm oil, soy, cocoa, and timber & wood fiber (Curtis et al., 2018), among others; not every commodity is relevant to every company.
Each company should consider the most relevant deforestation-linked commodities within their operations and supply chains and prioritize those first, while eventually halting all deforestation in their supply chain. Companies should also set a cutoff date (no later than 2020), which is the date after which deforestation is counted in a company's supply chain for the purposes of the deforestation commitment.
Companies should meet their no-deforestation targets using the AFi guidance on deforestation and conversion of other natural ecosystems (FLAG-R3). The cutoff date associated with deforestation commitment compliance is separate from the GHG accounting requirement to include any LUC emissions from the past 20 years."
That last sentence regarding land use change emissions from the past 20 years is, in my opinion, one reason why this guidance is extremely difficult to implement. Knowing about Scope 3 emissions from land use change from all suppliers over the past 20 years is quite unrealistic. Even where it can be accurately known, I suspect it would render the majority of commitments impossible.
It is permissible to use statistical land use change (sLUC) as a "factor" for this, but this factor tends to give higher estimates than dLUC (direct land use change). Given the rate of land conversion that has taken place globally over the past 20 years, e.g. the 32 million acres of US prairie that has been converted to crop production since 2012, and the 513,016sq km of Amazon forest lost since 2000, I doubt that there will be very many companies with international agricultural supply chains that can reach a target of 72% reduction by 2050 after including 20 years of LUC.
This is unfortunate. We need ambitious targets to drive continuous improvement, but if we set unrealistic accounting criteria, we are likely to see companies retreating from target setting, the exact opposite of what we want.
What I am wondering is whether we can pull together a set of principles and criteria that can guide frameworks for accounting, both emissions and removals. In some early discussion, I have had some support for this, and am keen to convene a discussion with members to see if we can advance it further.
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A Last Note: Please find a folder with all of the presentations from the last EUDR MSP meeting here. In particular, note the presentation on "EUDR Information System" which includes a timeline for the implementation of that system, and a presentation from AidEnvironment on Cattle Traceability systems.
