FLAG emissions 101

The basics every company needs to know, and Watershed's groundbreaking FLAG methodology.

A photo of deforestation and plowing a farm, representing FLAG emissions

Burning fossil fuels is not the only way that corporate activity contributes to climate change; almost a quarter of global emissions come from land-related emissions that are unrelated to fuel usage.

These emissions can come from activities such as deforestation, which releases large amounts of stored carbon, or livestock management, which releases methane, a potent greenhouse gas.

FLAG (Forest, Land, and Agriculture) emissions are a category of greenhouse gas emissions that encompass the many ways land use change and land-related activities impact the climate.

Measuring FLAG emissions is key to developing a more comprehensive view of an organization’s carbon footprint, and this doesn’t just apply to farmers and lumber companies—it’s critical for any business whose supply chain relies on animal, crop, or wood products. Companies in industries including food, apparel, retail, and construction all have potentially significant FLAG emissions.

It’s crucial for all companies to understand what FLAG emissions are, and how material they are to your footprint, because international climate disclosure guidance now requires certain companies to measure and disclose FLAG emissions for the first time.

FLAG emissions primarily come from two sources:

Land use change (LUC): Emissions related to a change in land use within the past 20 years. For instance, let’s say a forest was cut down 5 years ago for lumber, cattle grazing, or cotton farming; this shift gradually produces emissions over time by releasing stored carbon in the plant material, and decreasing the land’s natural ability to store carbon.

Land management (LM): Emissions from land-related activities within the reporting year. This includes activities that involve fertilizer and manure usage, livestock management, and forest degradation.

For companies with significant FLAG emissions, measuring this component of your footprint is necessary for you to plan and implement effective decarbonization strategies for your business.

Why is FLAG important now?

The Greenhouse Gas Protocol (GHGP)—the main standard-setting body for carbon accounting—released its draft Land Sector & Removals (LSR) Guidance earlier this year. This LSR guidance is a 300+ page document with very detailed requirements on measuring FLAG emissions. Previously, due to the lack of guidance, many companies avoided measuring FLAG emissions or had inconsistent methodology.

The draft GHGP LSR Guidance asks the following:

Along with this LSR guidance, the Science Based Targets Initiative (SBTi) is mandating separate FLAG targets for all companies that are (1) in FLAG-related sectors (see next section), or (2) have FLAG emissions that are >20% of their total footprint, regardless of industry.

For companies that meet either of these criteria, SBTi is requiring companies to use the draft LSR guidance to add FLAG targets on an aggressive timeline:

The bottom line: companies with reliance on land, agriculture, or other nature-based products—whether in their own operations or their supply chain—must begin quantifying this climate impact and making plans to reduce these emissions.

Who is impacted by new FLAG guidance?

SBTi designates FLAG-related sectors as the below:

While the above sectors are required to use SBTi’s FLAG guidance, there are a variety of other industries that may fall into the second criteria of having >20% FLAG emissions in their footprint:

For companies in this second list of industries, we recommend measuring FLAG emissions in your Scope 3 to determine how material FLAG is to your total footprint.

For instance, if you’re an apparel company with leather purses or cotton jeans, a furniture retailer who sells wooden bed frames and tables, or a tire company that uses natural rubber, you likely need to measure FLAG emissions to get an accurate sense of your environmental impact. For some of our customers, FLAG emissions were estimated at more than half of their overall footprint.

How does Watershed measure FLAG?

Based on the new GHGP guidance, most existing emission datasets do not have the sophistication, granularity, and geographical coverage needed to be FLAG-compliant. In contrast, Watershed built our methodology from the ground up to make it simple for companies to add granular, GHGP-compliant FLAG measurement to their footprint and set FLAG SBTs.

Professor Steve Davis, Chair of Watershed’s Science Advisory Board, developed a groundbreaking, peer-reviewed method to quantify direct GHG emissions from land use change and land management for over 150 agriculture and forest commodities.

FLAG emissions are highly location-dependent—for instance, one Watershed customer found that their Brazilian-sourced beef was roughly twice as emissive as their American beef, once they accounted for the level of Amazonian deforestation caused by cattle ranching. Watershed’s dataset is customized for over 200 countries and regions based on state-of-the-art data from the UN Food and Agriculture Organization.

Watershed incorporated this FLAG methodology into our CEDA Global database, an industry-leading, multi-region emission factor dataset used by consulting and auditing companies globally. CEDA was developed by Watershed’s Head Scientist, Dr. Sangwon Suh, and covers 149 countries and regions and the complex, interconnected emissions sources that flow between the various countries and industries.

By integrating these two cutting-edge methodologies, Watershed’s FLAG methodology not only allows you to measure these emissions, but also unlocks key emission reduction insights like the following:

Key takeaways

If your company has substantive agriculture, forest, or land-related activities in your value chain, you need to start thinking about FLAG measurement. To accurately measure and reduce FLAG emissions, you need country-level FLAG emissions factors to reflect the significant differences between regions and a unified calculation system that can reflect improvements in your data over time.

Watershed’s FLAG methodology is based on peer-reviewed research and provides data on 150+ commodities and 200+ countries, providing confidence that your measurement is as comprehensive as possible.


an image of the CSRD experts who spoke at Watershed's webinar

Tactical advice on the CSRD

Photo of UK flag on the left and TPT logo on the right

TPT: Everything you need to know about the UK Transition Plan Taskforce

Illustration of coins in a field

SEC ESG fund rules: Everything you need to know

Customer stories

coyuchi product

How Coyuchi gets product-level carbon insights from Watershed

houses next to solar panels

How Aon automated its carbon footprint measurement

kroll and watershed and cdp logos

Kroll on using Watershed to save time reporting to CDP

Watershed HQ

Sylvie Goulard, a new member of Watershed's Policy Advisory Board

Welcoming Sylvie Goulard to our Policy Advisory Board

Climate curve with text "Series C"

$100M for climate

2023 with a world for the 0

Watershed's 2023 year in review


Illustration of coins in a field

SEC ESG fund rules: Everything you need to know

the California capitol where SB253 and SB261 were passed

California SB 253 and SB 261: a guide for companies

Welcoming Mary Schapiro to the Watershed Policy Advisory Board

Welcoming Mary Schapiro to our Policy Advisory Board


watershed and latham and watkins law firm logos next to an image of the SEC

How to prepare for mandatory climate disclosure - advice from Betty M. Huber of Latham & Watkins

ropes and grey logo with the California flag, watershed logo and text: Guide

Michael Littenberg of Ropes & Gray on California’s SB 253 and 261

EU Flag plus Covington logo

What is the EU's Green Claims Directive? Full Guide with Covington experts