Peter Bunce, Head of Cotton at Indigo Ag, has been working in agriculture for over 20 years, with a special focus on cotton production through to textiles. His passion for regenerative agriculture traces back to his childhood on an Australian farm, where his family began implementing regenerative farming practices long before they were formally recognized as “regenerative.”
The biggest fashion brands in the world find themselves at an important but complicated moment in their corporate sustainability journeys—trying to define their SBTi FLAG goals.
That term, “FLAG,” is an acronym, standing for forest, land, and agriculture. And it’s often described in combination with “goals” or “targets” to refer to the amount of greenhouse gas emissions many companies aspire to remove or reduce from their supply chains.
But who sets these targets? When and how do you need to set these targets? And how do you even come up with a complete understanding of your long and diverse supply chain?
Here’s what you need to know.
The Basics
FLAG goals are a pivotal component of the Science-Based Targets Initiative (SBTi), specifically honing in on emissions associated with land use in agriculture and forestry sectors to reduce emissions in line with a 1.5C pathway. SBTi itself is a beacon, guiding companies to set ambitious and scientifically sound greenhouse gas emission reduction targets. For the first time, SBTi FLAG guidance also allows companies to utilize removals as progress towards targets. In fact, the SBTi FLAG sector pathway is built with the expectation that more than a third of progress towards targets will be achieved through removals rather than emission reductions.
For companies considering FLAG goals and wanting to meet those goals on a set timeline—in most cases in the fashion industry it’s 2030 or earlier—the process involves considering carbon removals. Companies that set SBTi FLAG targets must address their land-based emissions with land-based solutions. The opportunity to pull back greenhouse gasses that have entered the atmosphere since the Industrial Revolution in geologically unprecedented amounts is an impactful and rapid way to make a difference—but, initially, the concept can be daunting. How will we measure it? How do we know the drawdown is permanent? How can we prove the drawdown really happened? These are serious questions.
But there’s a silver lining: nature-based carbon removals. The natural process of photosynthesis is to fix carbon from the atmosphere, use this building block for its leaves and roots and shoots, and then store any remaining carbon within the soil. This opportunity makes accounting for removals, not just reductions within a supply chain, a cost-effective, immediate, and impactful avenue for fashion brands to achieve their climate targets. To get it right, though, necessitates unique technology and strong partner relationships. What’s being measured here is soil carbon levels—not a one-and-done scenario but a nuanced biogeochemical process. One of the alternatives, technologically based removals, are expensive, not at scale, and not ready to be deployed.
Learn more about Indigo Ag's sustainability solutions for corporations.
Why?
The reason behind FLAG goals echoes in the numbers—22% of global greenhouse gas emissions stem from agriculture, forestry, and other land use activities, according to the Intergovernmental Panel on Climate Change (IPCC). How farmers cultivate the land becomes a crucial lever in the race to preserve our land and its ecosystems.
The IPCC, a scientific body under the United Nations, warns that surpassing the 1.5 degrees Celsius threshold could usher in severe consequences. There are many negative downstream consequences from this seemingly minor jump. For the farmers and ranchers who work the land, these consequences include disruptions to their land and the ecosystems that comprise it. Downturns in biodiversity, migration patterns, and the availability of habitats—all these factors intertwine to affect food security, water resources, and livelihoods tied to natural systems.
Who?
Believe it or not, even though fashion companies draw heavily from forestry, land use, and agriculture to create their products, but not all fashion brands are obligated to set FLAG goals under SBTi—except for certain exceptions. These exceptions help to create a more sustainable and resilient climate. FLAG targets for any company who has set, or in the process of setting an SBTi goal become mandatory if 20% or more of their emissions originate from FLAG-related sources – this rule applies to fashion as well.
This is where the sustainability teams in the space have been spending a majority of the last year, working to determine if they cross that 20% threshold—and even if they don’t, whether or not they should still move to set FLAG goals anyway. Interestingly, beyond mandatory requirements, many companies, including some of the world's most prominent fashion brands, are voluntarily embracing FLAG goals due to perceived benefits in sustainability and environmental impact before knowing whether they are above 20%.
Fashion companies know they rely on the work and efforts of farmers and ranchers, their land, and the communities they live in, to not only grow the fiber but get the fiber transported to produce a garment consumers are interested in buying.
When?
So all brands who’ve set, or are setting SBTi goals and meet the 20% threshold category must set a FLAG goal, But when? And that answer depends where you are on your SBTi goal setting journey.
Fashion companies who’ve already set existing SBTi goals and meet the 20% threshold are required to set a FLAG target within 6 months of the GHG Protocols LSRG (Land Sector & Removals Guidance). So current estimates put the FLAG deadline at Q1 or Q2 2025, which is coming really quickly.
Companies that are setting their SBTs for the first time, or who are updating their existing SBTs and/or adding net zero SBTs have been required to set FLAG targets (if they meet the criteria) since April 30, 2023.
How?
That’s the question. Knowing what’s at stake, why it matters, and who is in the space, all that’s left is the operational aspect: How does one go about setting and achieving FLAG goals? This is where Indigo Ag can help.
Through Indigo Ag’s scope 3 solution, Indigo has pioneered crop programs that connect fashion brands with regeneratively-produced cotton. This goes beyond getting the sustainably-grown cotton into the supply chains for brands—we have started to actively quantify the Emission Factor (EF) of the cotton itself, giving bales an associated carbon intensity score based on the exact tons of carbon removed and reduced during the production of cotton, otherwise referred to as cradle-to-farmgate. This number is a key part of the accounting that goes into actually proving FLAG goals have been met.
Indigo is currently running pilots for a number of fashion brands to identify regenerative cotton farmers, quantify the emissions factor of their cotton and trace that cotton into participating brands supply chains. This will provide brands with a range of emissions factors that can aid them in setting their FLAG targets. After all, how can brands set a FLAG goal unless they have some idea of the range of net emissions reductions that is achievable from regenerative cotton farming practices and different soil types?
Our sustainability program work has been validated by third-party entities like Verra and CAR, and has become a pivotal tool for brands to establish realistic and manageable targets. Indigo’s scientists and engineers are continually refining the models that generate these insights, incorporating trillions of data points from millions of acres under all of Indigo's programs. This transparency provides companies with the insights necessary for informed decision-making and strategic planning.
As a testament to their dedication, Indigo is currently working on establishing an emissions baseline for the entire U.S. cotton industry.
As far as other process requirements, companies that set SBTi FLAG targets will need to:
• Update their inventories in line with the draft LSRG (or finalized guidance once published)
• Potentially update their baseline inventory in line with the draft LSRG (or finalized guidance once published)
• Set their target in line with SBTi criteria and either FLAG sector and/or commodity pathways (supported by the SBTi FLAG tool)
• Go through the SBTi target validation process
What You Need to Know When Setting Targets
The integration of FLAG goals into the sustainability initiatives of apparel and other fashion companies marks a paradigm shift towards a more sustainable, more responsible future. As companies grapple with the complexities of these goals, a partnership with Indigo Ag can set a path forward—one that not only meets regulatory requirements but also goes above and beyond to prove a positive impact on farmers and the world’s soil.
The commitment to FLAG goals shouldn’t just be a corporate obligation; it's a collective endeavor to safeguard our land and our climate for the future. We recognize that and we want to help you get there.
Learn more about Indigo Ag's sustainability solutions for corporations.