SBTi FOREST, LAND ANDAGRICULTURE (FLAG)PROJECT FAQs0SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

CONTENTSFrequently Asked Questions on the SBTi FLAG project were updated based on the FLAG publicconsultation January-February 2022. Please contact [email protected] for additional questionsnot answered here.1 WHAT IS FLAG AND OTHER KEY QUESTIONS . 22 FLAG CONSULTATIVE PROCESS . 33 FLAG TIMELINE .34 WHAT IS INCLUDED IN A FLAG SCIENCE BASED TARGET?. 5Removals . 7FLAG science-based targets versus bioenergy targets 8Zero deforestation commitments .85 HOW TO SET A FLAG SCIENCE BASED TARGET . 9Using FLAG tools 9Target recalculation .106 FLAG AND NET-ZERO .107 FLAG AND GHG PROTOCOL .108 FLAG AND THE FINANCIAL SECTOR .119 FLAG AND THE SCIENCE BASED TARGETS NETWORK (SBTN) .1110 FLAG AND CARBON CREDITS .12SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

1 WHAT IS FLAG AND OTHER KEY QUESTIONSWhat is FLAG?The SBTi Forest, Land and Agriculture (FLAG) project is the approach (including a tool andguidance) for companies in land-intensive sectors to set science-based targets in line with the goalsof the Paris Agreement.When is a company required to set a FLAG science-based target?The Science Based Targets initiative (SBTi) requires companies that meet either of the following twocriteria to set a FLAG science-based target:i)Companies with land intensive activities in their value chain from the following FLAG-designatedsectors are required to set FLAG targets: Forest and Paper Products – Forestry, Timber, Pulp and Paper, Rubber Food Production – Agricultural Production Food Production – Animal Source Food and Beverage Processing Food and Staples Retailing Tobaccoii)Companies in any other SBTi-designated sector that have FLAG-related emissions that totalmore than 20% of overall emissions across scopes 1, 2 and 3.If my company is required to set a FLAG science-based target, will I also have a 'non-FLAG'target?Yes. FLAG targets cover forests, land, and agriculture (see FLAG draft guidance for details), whilea company's non-FLAG target covers all other fossil-based emissions.How does my company account for removals in FLAG?FLAG science-based targets include land-based removals; the specific guidance for accounting forland-based removals will come from the GHG Protocol Land Sector and Removals guidance, draftto be issued this year. FLAG and GHG Protocol are working closely to ensure that targets andaccounting guidance are aligned.What temperature targets does FLAG cover?Both the FLAG sector pathway and the commodity pathways are 1.5 C compliant pathways.Are removals included in near-term targets outside of FLAG?SBTi only includes removals in FLAG science-based targets. Non-FLAG targets include emissionreductions only, not removals.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

2 FLAG CONSULTATIVE PROCESSHow and when can my company engage in FLAG?During the FLAG public consultation (now closed) we received comments from more than 165companies and other stakeholders. We have had 18 companies participate in a corporateconsultative group. Email us for more information or to join the mailing list: [email protected] are NGOs, farmers, indigenous communities, local communities, and others included inFLAG development?WWF led the development of the FLAG tool and guidance, including consultation with actors allalong the agriculture and forestry value chain, including primary producers. Throughout thedevelopment process, the FLAG team has consulted experts in GHG accounting from non-profitsrepresenting a range of environmental and social expertise. Our largest outreach effort was throughthe public consultation phase which elicited feedback and review from NGOs all over the world,producer groups, companies, and other stakeholders.3 FLAG TIMELINEWhat is the current FLAG project timeline?In January and February 2022, the SBTi held a month-long public consultation for the Forest, Landand Agriculture Science Based Target Setting Guidance to ensure the criteria and guidance arerobust, clear, and practical. We saw over 1,600 comments from more than 165 organizations.Acknowledging the comments received, we moved forward with revision of the FLAG guidance,including a much-requested process to develop regional commodity pathways and to providecompanies with a streamlined tool to make implementing regional targets straightforward.To ensure we have a clear and robust methodology for companies within the food, agriculture andforest sectors to account and set science-based targets for land-based emission reductions andremovals, we are currently conducting an in-depth review of the guidance. We plan to launch theFLAG guidance and tool in Q3 2022.When will companies be required to set FLAG science-based targets?The draft timeline for requiring FLAG target setting and recalculation is presented in the diagramsbelow.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

4 WHAT IS INCLUDED IN A FLAG SCIENCE BASEDTARGET?Where can I learn more about the methods used and the data underlying the FLAG work?You can access the FLAG methods addendum and other FLAG resources here.Are avoided emissions included?The SBTi and FLAG project follow the accounting guidance of the GHG Protocol. This guidanceoperates on the inventory accounting approach rather than a project accounting approach. Avoidedemissions based on product or material use or substitution are not included in inventory accounting.However, the term ‘avoided emissions’ is also used to refer to avoiding deforestation, and emissionsand removals related to deforestation, as well as maintaining and increasing carbon stocks in forests,included in FLAG.Are pathways designed to be differentiated for different regions/countries?The SBTi and FLAG project are actively engaged in a process to assess regional pathways for FLAGcommodity pathways and will provide updates on this topic in the coming months.How is land use change included in FLAG?Emissions from land use change are included in both the FLAG sector and commodity pathways.Following GHG Protocol guidance, land use change emissions are accounted for using a 20-yearallocation.Are Bioenergy and Carbon Dioxide Capture and Storage (BECCS) included in FLAG?No. Although BECCS are included in the underlying Roe et al 2019 data, they are excluded underFLAG as we did not feel it was appropriate to assign these removal requirements to the Agricultureand Forestry sectors. BECCS are included in SBTi under the bioenergy criteria.Do the commodity pathways account for growth in production?Yes. Future production estimates are included in the pathways. Further, because the commoditypathways are based on emissions intensity, companies are expected to set targets based onestimated future production.Does the beef commodity approach also include leather?FLAG has developed a specific pathway for leather.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

Will other commodities be added (e.g., aquaculture, cocoa, coffee, cotton, etc.)?Other commodities will be considered in future developments. The commodities current coveredwere selected based on data availability.Does the timber and wood fiber pathway cover pulp and paper companies?Yes. The timber and wood fiber pathway covers emissions ‘up to yard’ for pulp and paper companies.Other ‘non-FLAG’ emissions (i.e., direct process emissions) from pulp and paper are covered underour SBTi industrial sector resources, including the pulp and paper pathway.What rate of emissions reductions and removals is expected in the FLAG pathways?The draft emission reduction rates for each of the FLAG pathways can be found in the FLAGguidance, Table 9.Can overachievement of a FLAG science-based target be used to meet a non-FLAG target?No. FLAG and non-FLAG targets are separate. FLAG emission reductions and removals may beused only toward a FLAG target.What emissions and removals are covered by FLAG science-based targets, and what is theemissions boundary?Please refer to Table 6 in the draft guidance for a full list of emissions covered. The emissionsboundary covered extends to 'farm gate', not including processing emissions (see FLAG Criterion7).Which greenhouse gases does FLAG cover and what Global Warming Potential (GWP)conversion is used?FLAG targets are set using CO2e. Following IPCC, GWP100 factors are used to include methaneand nitrous oxide.*GWP is not used.How does FLAG handle nitrous oxide and methane emissions from agriculture that areexpected to continue into the future?FLAG pathways follow climate science in recognizing that some nitrous oxide and methaneemissions from agriculture will endure. This is reflected in the models.Are biogenic emissions from wastewater treatment covered by FLAG?FLAG does not cover biogenic emissions from wastewater treatment at this time.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

How are fertilizers being handled between SBTi FLAG and SBTi Chemicals guidance?The SBTi is aligning on fertilizers between FLAG and the chemicals work. Additional guidance willbe forthcoming.Is mining included in FLAG?Mining is covered in SBTi industrial sectors resources, not in FLAG.RemovalsDo FLAG science-based targets include both emission reductions and removals?Yes, companies are required to report emission reductions and removals separately, but the FLAGtarget is a net reduction target, including removals.Are removals included in near-term targets outside of FLAG?The SBTi only includes removals in FLAG targets. Non-FLAG targets include emission reductionsonly.Does forest restoration occurring outside of working lands accounted for as removals?Removals associated with actions occurring on working lands, (e.g., forest restoration fromsilvopasture) is included in the FLAG sector target. However, reforestation outside of working landsis otherwise excluded from targets because these efforts are generally outside of company supplychains. Models will be updated as needed to align with GHG Protocol guidance on this topic.Does my company need to separate emissions and removals to calculate a FLAG sciencebased target?Companies set net FLAG targets – land-related emissions combined with removals. However, in thevalidation process, companies must report emissions reductions and removals accountingseparately. This is important to maintain a focus on reducing cumulative emissions to theatmosphere, while separately increasing CO2 removals.Could land related reductions/removals be used to meet company non-FLAG science-basedtargets?No.Do FLAG science-based targets include forest restoration, reforestation, or afforestation?Forest restoration that occurs on working lands (for example, silvopasture) is included in the FLAGsector target, but reforestation outside of working lands is otherwise excluded from targets becauseSBTi Forest, Land and Agriculture (FLAG) Project [email protected]

these efforts are generally outside of company supply chains. Models will be updated as needed toalign with GHG Protocol guidance on this topic.FLAG science-based targets versus bioenergy targetsDoes FLAG include emissions from biofuels?No. FLAG does not include emissions from biofuels/ bioenergy.The SBTi general guidance specifies what reporting and target setting companies need to do forbioenergy specifically. Future revision will follow forthcoming GHG Protocol Land Sector andRemovals guidance.Why are FLAG and land emissions related to bioenergy separated?FLAG and bioenergy are currently separate for two reasons. First, the SBTi bioenergy criterionpredated the FLAG project, and the SBTi is taking a stepwise approach to update. Second, manycompanies that have bioenergy emissions (and removals) are not companies in the land sector butrather companies in transportation, aviation, and other sectors. If bioenergy were included in FLAGtargets, then these companies would be obliged to set separate FLAG targets for what is usually avery small portion of their GHG inventory. Future revision will follow forthcoming GHG Protocol LandSector and Removals guidance.Will FLAG include biofuels in the future?With the publication of the GHG Protocol Land Sector and Removals Guidance, the SBTi will reviewthe current arrangement in which FLAG targets are separate from the bioenergy criteria and makeupdates and modifications as needed.Zero deforestation commitmentsDoes the deforestation cut off date need to be 2020 exactly, or can it be earlier?Deforestation cut off dates can be earlier than 2020, but they must not be later than 2020. Thedeforestation requirements are under revision based on comments received in the publicconsultation. Updated guidance is forthcoming.Will ecosystem conversion beyond deforestation be considered?All deforestation AND conversion are included in GHG emissions accounting and FLAG targetsetting. However, the additional requirement to have a specific deforestation commitment appliesonly to deforestation, not to conversion. Yet, the SBTi recommends that companies set a zero landconversion and peat burning target across their value chains, and also recommends meeting thesetargets as soon as possible (see FLAG draft guidance document).SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

5 HOW TO SET A FLAG SCIENCE BASED TARGETWhat time period does the FLAG science-based target cover?FLAG near-term targets are the same as all SBTi near-term targets in that they now cover a periodof 5-10 years. There is also a long-term FLAG pathway in the Net-Zero Tool for setting long-termFLAG targets. This long-term FLAG target pathway covers all agriculture, but is not appropriate forforestry. Long-term forestry targets will be covered in a future version. All long-term targets shouldbe set using the SBTi Net-Zero Standard and tool –FLAG long-term targets are built in to that tool.Does FLAG require separate targets for each greenhouse gas?No. FLAG targets are aggregated across greenhouse gasses using standard CO2e, accounted usingGWP100.Using FLAG toolsIs there specific criteria to use FLAG sector or the FLAG commodity tool?Yes. The FLAG Sector Tool is the default target-setting tool. Companies with emissions associatedwith one of the nine available agricultural commodity pathways that account for 10% or more of acompany’s total FLAG emission (across all scopes) may use the commodity pathway for thatcommodity.Companies with emissions related to timber and wood fiber accounting for 10% or more of theirFLAG emissions are required to use the commodity pathway for timber and wood fiber available inthe commodity tool.If my company uses a number of different commodities, one of which may be over 10% butthe others are under 10%, would we use the pathway for the 10% commodity or the defaultFLAG pathway?The company can decide whether to use the commodity tool only for commodities accounting for10% or more of their total FLAG emissions and the sector tool for other commodities OR use thesector tool for all commodities (except for timber and wood fiber that requires the use of thecommodity tool).If my company uses both tools (FLAG Sector and FLAG Commodity) the commodity-basedFLAG emissions reductions would need to be translated into an absolute target? How couldthat work?For easy communication, companies using both commodities and sector pathways are encouragedto consolidate targets into one combined (absolute) FLAG target using the aggregator tool.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

Target recalculationFor companies with existing science-based targets, what is the maximum time limit forreleasing a compatible FLAG target?Companies with existing science-based targets will need to follow the SBTi Criteria for targetrecalculation. Further specific guidance for FLAG will be included in the final FLAG guidance.6 FLAG AND NET-ZEROCan companies set both near-and long-term (net-zero) science-based targets for FLAG?Yes, companies will be able to set both near-and long-term (net-zero) FLAG targets. The currentlong-term FLAG pathway is developed for agriculture only; a long-term FLAG pathway for forestrywill come in future updates.Can AFOLU removals be used to meet net-zero neutralization targets?Further guidance on net-zero neutralization is forthcoming from the SBTi. Please see the Net-ZeroStandard for further details, as well as the SBTi Beyond Value Chain Mitigation FAQ.7 FLAG AND GHG PROTOCOLWhat is the difference between FLAG and the GHG Protocol Land Sector and Removalsguidance?GHG Protocol Land Sector and Removals guidance is developing guidance on how to account forland-related emissions and removals. The SBTi FLAG project is developing guidance and a tool forhow companies should set science-based targets for mitigation of land-related emissions andremovals.How are FLAG and GHG Protocol aligned?FLAG and the GHG Protocol Land Sector Emissions and Removals guidance have been workingclosely together and will continue to do so to ensure that target setting, and emissions accountingare as aligned as possible. Any updates needed based on the final GHG Protocol Land SectorEmissions and Removals guidance will be made in a FLAG version update. Companies that setFLAG targets prior to any FLAG revisions will not need to set new FLAG targets outside of theirregular SBTi target update cycle.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

For scope 3 inventory, can companies use the GHG Protocol Scope 3 Standard?For FLAG/AFOLU the forthcoming GHG Protocol Land Sector and Removals guidance will addressemissions/removals across scopes, including scope 3. This new guidance should be used for GHGaccounting within FLAG/AFOLU.How should companies account for FLAG-related emissions?Companies should use the GHG Protocol Land Sector and Removals guidance to account for FLAGemissions. While awaiting finalization of GHG Protocol guidance, please see Box 1 in the draft FLAGguidance for additional resources.What guidance should companies use to account for FLAG emissions prior to the release ofGHG Protocol Land Sector and Removals guidance?Companies setting FLAG targets prior to the release of the GHG Protocol Land Sector and Removalsguidance should use the draft GHG Protocol guidance, as well as the Quantis NCS guidance, andthe GHG Protocol Agriculture guidance. A full list of recommended resources can be found in thedraft FLAG guidance, Box 1.Will companies with existing science-based targets need to reset baselines once FLAG isavailable?Following the SBTi criteria and recommendations, companies should recalculate targets when thereare significant adjustments to the base year inventory. So, companies that need to significantly adjusttheir inventory to include FLAG emissions, a recalculation would be expected (see FLAG draftguidance p24-25).8 FLAG AND THE FINANCIAL SECTORHow does FLAG guidance apply for Financial Institutions (FI)?The SBTi FLAG and FI teams are working on guidance for financial institutions with FLAG-relatedemissions.9 FLAG AND THE SCIENCE BASED TARGETSNETWORK (SBTN)How does the SBTi FLAG project relates to the SBTN?SBTi's climate GHG targets drive a group of actions on land - but not everything that is needed toalign with a net-zero or nature positive future. The SBTN is developing targets that focus on theseSBTi Forest, Land and Agriculture (FLAG) Project [email protected]

non-climate metrics - which are equally as important. There is staffing overlap between the twoefforts to make sure that they are additional and align well.10 FLAG AND CARBON CREDITSAre carbon credits included in FLAG?No. Carbon credits cannot be used to meet FLAG targets, as the SBTi is focused on achieving thenecessary science-based mitigation within a company's supply chain. Any sale or purchase ofcarbon credits should be handled in a company inventory following GHG Protocol guidance to avoiddouble counting.Can insets be used to meet FLAG targets?Because the term ‘insets’ is not well defined, it is not used in the FLAG guidance. Emissionsreductions and carbon removals within supply chain are included in FLAG as part of a company’sinventory accounting; neither emissions reductions nor carbon removals within supply chain need tobe verified as a carbon credit. Emissions reductions or removals that occur outside of a company’ssupply chain are not covered by FLAG and would require a re-allocation of the pathways under Roeet al 2019 to the corporate sector.SBTi Forest, Land and Agriculture (FLAG) Project [email protected]

Yes. FLAG targets cover forests, land, and agriculture (see FLAG draft guidance for details), while a company's non-FLAG target covers all other fossil-based emissions. How does my company account for removals in FLAG? FLAG science-based targets include land-based removals; the specific guidance for accounting for