On 19 March 2026, the SBTi published version 1.2 of its FLAG (Forest, Land and Agriculture) guidance. Effective immediately. No transition period. If your company has SBTi targets and operates in sectors linked to land use, this affects you directly.
What changes with FLAG v1.2
The update brings five concrete changes. These are not cosmetic adjustments:
1. The 6-month grace period is gone. Until now, companies that already had non-FLAG SBTi targets could take up to 6 months after the publication of the GHG Protocol Land Sector and Removals Standard to set their FLAG targets. That is over. They must now do so before the end of their mandatory five-year review cycle. If your review cycle falls in 2026, your FLAG targets need to be ready by then.
2. Mandatory alignment with the GHG Protocol Land Sector and Removals Standard. This recently published standard defines how to account for emissions and removals in the land-use sector. FLAG v1.2 requires targets to be aligned with it. This is a requirement, not a recommendation.
3. Deforestation deadline: maximum 2 years from submission, hard stop 31 December 2030. Companies setting FLAG targets for the first time have a maximum of two years from their target submission to eliminate deforestation from their value chain, with an absolute deadline of 31 December 2030. The expected cutoff date remains 2020 or earlier.
4. More commodities included in no-deforestation commitments. The list of commodities linked to deforestation is expanded to cover the main products at global level. If your supply chain includes soy, palm oil, cocoa, coffee, rubber, beef, leather, timber, or pulp, you are in scope.
5. Mandatory publication of the compliance plan. Commitment is no longer enough. Companies must publish documentation explaining how they will meet their no-deforestation commitments: on their website or in public policy documents, with the cutoff date and implementation details.
Who is affected
The FLAG sector represents 22% of global GHG emissions: the third-largest emitting sector after energy and industry. But you do not need to be an agricultural operation to be in scope.
FLAG applies to any company whose scope 3 emissions include activities linked to land use. In practice, this includes:
- Agri-food and food & beverage: producers, processors, distributors. If you buy agricultural raw materials, FLAG applies to you.
- Fashion and textiles: cotton, wool, leather, cellulosic fibres. The SBTi has confirmed this explicitly in its communication on v1.2.
- Cosmetics: palm oil, shea butter, plant-based ingredients with complex traceability.
- Paper, packaging and timber: pulp, cardboard, biomass. The timber and wood fibre pathway is temporarily suspended, but the obligation to set FLAG targets remains.
- Retail: if you sell products with agricultural or forestry components, your scope 3 emissions include FLAG.
If your company needs help mapping scope 3 emissions in your supply chain, Dcycle covers the calculation of the relevant categories with up-to-date emissions factors.
Why this matters now, not in 6 months
FLAG v1.2 is effective immediately. Any company submitting targets for SBTi validation from March 2026 onwards must comply with the new rules, even if it started the process before the update was published. Companies that submitted targets in 2025 and have not yet received approval can align voluntarily.
In practice, this creates urgency for three profiles:
Companies with existing SBTi targets in their five-year review cycle. They could previously postpone FLAG. Now, the review must include FLAG if they operate in relevant sectors.
Companies setting SBTi targets for the first time. If their scope 3 includes land-sector emissions, FLAG is part of the package from day one.
Companies with vague deforestation commitments. The mandatory publication of the compliance plan means generic pledges no longer suffice. You need to document cutoff dates, covered commodities, and verification mechanisms.
What you need to calculate (and why it is complex)
FLAG requires accounting for emissions categories that many companies have never touched:
- Emissions from land use change: deforestation, ecosystem conversion.
- Emissions from agricultural activities: fertilisers, manure management, rice cultivation, residue burning.
- Biogenic CO2 removals: ecosystem restoration, silvopastoralism, improved forest management.
These categories are reported separately from regular scope 1-3 emissions. And you must distinguish between reductions and removals, which are accounted for separately.
The denominator varies depending on whether you are a demand-side actor (you buy commodities) or a supply-side actor (you produce them). Demand-side actors use the FLAG Sector Pathway (absolute reduction). Supply-side actors can use the Commodity Pathway (intensity per commodity).
In short, FLAG is not “scope 3 with an extra category”. It is a parallel system with its own methodology, its own databases, and its own verification criteria.
What Dcycle can do for you
If your company needs to calculate scope 3 emissions linked to the land sector, Dcycle already covers the calculation of the relevant categories with updated emissions factors. But beyond calculation, what matters with FLAG is traceability across your supply chain: knowing where your raw materials come from and what deforestation risk they carry.
Dcycle gives you the emissions database. Combining that with supplier traceability data is what turns the calculation into a validatable FLAG target.
To discuss your specific situation, request a demo and we will walk through the FLAG requirements that apply to your sector and supply chain.
Three things to do this week
1. Check whether FLAG applies to you. If your scope 3 includes category 1 (purchased goods and services) with agricultural or forestry components, the answer is probably yes.
2. Check your SBTi review cycle. If your next five-year review is in 2026 or 2027, FLAG must be included.
3. Document your deforestation commitments. If you already have one, make sure it includes a cutoff date, the commodities covered, and an implementation plan. If you do not have one, now is the time to start.
The loophole is closed. FLAG is no longer “for later”.