SBTi FLAG Guidance Sets 2025 Deadline for Corporate No-Deforestation Commitments

The Science Based Targets initiative's Forest, Land and Agriculture guidance requires companies in land-intensive sectors to commit to halting deforestation across all supply chain emissions by 31 December 2025. Land use change, primarily from deforestation linked to agriculture, accounts for 11 percent of global carbon emissions.

Companies setting FLAG targets must cover primary deforestation-linked commodities, including soy, cocoa, palm oil, beef and timber, and must implement traceability and monitoring systems to verify compliance. The SBTi recommends a cutoff date of 2020, meaning any deforestation after that year renders sourced commodities non-compliant. In 2023 alone, the world lost 3.7 million hectares of tropical primary forest, generating 2.4 gigatonnes of CO2 emissions, equivalent to nearly half of the United States' annual energy emissions. Transparent annual reporting of emissions and progress against no-deforestation commitments is mandatory for companies with validated targets.

Halting deforestation accounts for 80 percent of the land-use change mitigation capacity in SBTi's FLAG sector pathway, making it the single largest lever available to land-sector companies. Beyond climate impact, deforestation and biodiversity loss are projected to cost the global economy approximately USD 2.7 trillion per year by 2030. The FLAG guidance aligns with the European Union Deforestation Regulation, the UN High-Level Expert Group recommendations and the Accountability Framework initiative, increasing its relevance for Indian companies exporting to EU markets.

Companies are expected to have full implementation in place by end-2025, meaning that all or nearly all products in their supply chains are sourced from land not deforested after the 2020 cutoff date. The SBTi acknowledges that traceability in complex global supply chains presents practical challenges, and encourages use of the Accountability Framework for supplier engagement and monitoring system guidance. Looking beyond 2025, the initiative calls on businesses to eliminate all forms of land conversion and restore degraded ecosystems to support net-zero goals by 2050. Version 1.2 of the FLAG Guidance, released in March 2026, provides updated target-setting information.

Key figure — 3.7 million hectares of tropical primary forest lost in 2023, generating 2.4 Gt CO2