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May 31, 2023

Land-based Emissions: How to Get Ahead of the Regulatory Curve

2023 is set to be a huge year for land-related emissions reporting, with SBTi requiring Forest, Land and Agriculture (FLAG) targets from April onwards, and the GHG Protocol releasing their official Land Sector and Removals guidance in the second half of the year. This article outlines what your company needs to know and do to stay ahead of the regulatory curve.

What you will learn: 
  • Which companies need to consider land-based emissions
  • What land-based emissions are
  • Why your company should account for land-based emissions 
  • Incoming regulations to be aware of 
  • How to start thinking about measuring land-based emissions
Which companies are impacted?

Companies that engage in land sector activities e.g., agricultural products (like those from livestock or crops), biofuels, chemicals with natural precursors, activities in mining, urban expansion/ infrastructure, amongst others.

For example, a yoghurt brand, which runs its own dairy farms; a food re-seller which sources beef from 3rd parties, and a shoemaker which sources its leather from farms, would all need to consider emissions generated from land use change and land management decisions.

What are land-related emissions?

Land-related emissions arise from agricultural, forestry and other land sector activities. This includes emissions arising from:

  • Land use change (LUC): when a piece of land changes from one land category to another. Emissions arise from land use conversion or transition between Land Use categories. An example of this would be deforestation activities, where carbon would be released from the land because trees are cut down.
    Or
  • Land management decisions: refers to decisions made about the activities that happen on the land in question. An example of this would be choices made on fertiliser application to a piece of agricultural land. Emissions arising from land management activities occur within a Land Use category.
Why should your company account for these emissions?

Accounting for and managing land-related emissions is essential for achieving global climate goals. It also provides a huge opportunity for companies to reduce and remove GHG’s from their own carbon footprint.

  1. External Communications: It is increasingly valuable to consumers that products or services they are purchasing are from more environmentally-conscious companies. Two-thirds of consumers say they will pay more for sustainable products, whilst 77% of respondents say they would stop buying products from a company that had been found guilty of greenwashing (NielsonIQ). It is important for external communications that your company is using the most up-to-date and relevant accounting guidelines so that claims are well-supported.
  2. Carbon Removal Opportunities: Within land sector accounting, your company can also report relevant land management, biogenic, or technological carbon removals that occur within your supply chain. This offers a huge opportunity for rewarding companies that are implementing positive practices such as improved forest and soils management or carbon capture and storage. Land sector accounting will be necessary to claim these benefits; which will also be more accurate, verifiable, impactful and trustworthy than out-of-value-chain investments into 3rd party carbon removal initiatives. Companies must account for removals separately from reductions.
  3. Requirements and Compliance: If your company is already accounting for its GHG emissions Inventory using GHG Protocol guidance, then aligning with this update to their requirements is a must. Similarly, SBTi requirements for setting science-based targets will also require the accounting of Land-related emissions in compliance with the GHG Protocol guidance.

    a. GHG Protocol: If your company accounts for Greenhouse Gas emissions in compliance with Greenhouse Gas Protocol guidelines, it is required to account for any land-related emissions. This would be required if the company has land sector activities or removals in its operations or in the supply chain.

    GHG protocol does not specify emissions thresholds for companies required to account for these emissions, but states that their land-related accounting guidance is relevant for “companies of any size, at any point in the value chain”.

    b. SBTi FLAG targets: If your company is setting an SBT, then SBTi’s requirements around land-related emissions will also apply. Companies must set FLAG targets if they are part of one of these sectors:
  • Forest + Paper products
  • Food Production - Agricultural Production
  • Food Production - Animal Source
  • Food + Beverage Processing
  • Food + Staples Retailing
  • Tobacco


       Or
        If your company has greater than 20% of gross emissions coming from Forest, Land or Agricultural (FLAG) sources across scopes 1, 2 and 3 they also must submit separate FLAG targets.

        Additional relevant sectors may include retailing, packaging, tourism services, footwear, luxury goods, consumer durables etc.

Important next steps your company should take

If your company is starting to think about accounting for its land-related emissions, you can be ahead of the curve by being aware of some important dates, and thinking about how to measure land-based emissions.

Regulatory dates to be aware of:

GHG Protocol Land Sector and Removals Guidance

  1. Start of Q2 2023: End of Pilot Testing Phase for the draft Guidance
  2. End of Q2 2023: Publication of finalised Guidance, incorporating the Review phase and Pilot Testing Feedback

❓ The GHG protocol has not currently released the date from when GHG inventories will need to include Land Use reporting. It’s currently assumed to be required for baselines calculated following the date of the finalised guidance release.


SBTi

How to start thinking about measuring land-based emissions

Land Use Change (LUC)
Companies need to understand:

  1. Size & location of the land used in the production of products or provisions of services
  2. Changes between land categories or subcategories that have occurred within the last 20 years or more.
  3. When those changes took place

For purchased products, if this level of detail is not available, you should work to understand where these products are produced.

Land Management
Companies need to understand

  1. Size and location of land used in the production of products or provision of services
  2. Account for the carbon changes within their managed land
  3. For CO2 land management emissions, your company should begin to assess its land management activities that affect biomass, soil carbon and dead organic matter carbon pools on the land.
  4. The non-C02 emissions arising from the following categories:
Non-CO2 categories
Conclusion

Land emissions are becoming increasingly important, both for companies’ GHG Inventory accounting, and for target setting. A proactive approach to understanding and measuring land-based emissions will prepare companies for incoming regulations, whilst improving their sustainability performance. To learn more about the practicalities of land use emissions measurement check out our podcast with Emily Boothroyd, lead researcher at Altruistiq into land-based emissions.

Altruistiq has been involved in the review process for the new GHG Protocol guidance. Our solution and processes are set up based on the most up-to-date guidance, so any changes in this area will be tracked and actioned accordingly.

Please get in touch if you want to know more about how your company can prepare for incoming land-related emissions regulations.

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Emily Boothroyd
Insights Associate

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