The Land Sector and Removals Standard: What it means for your sustainability reporting

The Greenhouse Gas (GHG) Protocol has released its Land Sector and Removals (LSR) Standard, addressing one of the most complex and previously inconsistent areas of corporate greenhouse gas accounting: emissions and removals associated with land use, land-use change, and agriculture.

For many organisations, particularly those with agricultural supply chains, land holdings, or exposure to land-based commodities, this standard closes a long-standing gap in emissions reporting. It provides a globally recognised framework for quantifying, reporting and tracking land sector emissions and carbon dioxide (CO₂) removals in a consistent and comparable way.

Why the land sector matters

Land use and land use change are a material source of global emissions, yet corporate reporting in this area has historically relied on a mix of internally developed methods, representations and assumptions. In the absence of agreed-upon guidance, several important land-sector activities and their associated greenhouse gas impacts have often been excluded from corporate inventories. This has led to under-reporting, significant divergence in practice and limited comparability between entities.

The LSR Standard responds directly to this challenge. It explains how companies should account for:

• Emissions from land management and land use change
• CO₂ removals stored in land and geological carbon pools
• Emissions and removals associated with biogenic products across the value chain
• Selected technological CO₂ removals, such as direct air capture with geological storage.

Importantly, the Standard is designed to be used alongside the existing GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, enabling land sector impacts to be integrated into broader emissions inventories rather than treated as a separate or optional exercise.

What has changed with the release of the Standard

The publication of the LSR Standard does not create new categories of greenhouse gas emissions. Emissions from land use and land use change have always existed and, in many cases, have already been identified by reporting entities.

What the Standard does is clarify how those emissions and removals should be measured and reported. Prior to its release, entities often developed bespoke methodologies, resulting in inconsistent assumptions, boundary setting and estimation techniques. The LSR Standard provides a common reference point, improving transparency, consistency and credibility in reporting.

The Standard takes effect from 1 January 2027, with additional guidance materials to be published during 2026.

Implications for Australian sustainability reporting

For Australian entities preparing sustainability reports under AASB S2 Climate-related Disclosures, the release of the LSR Standard is particularly relevant.

AASB S2 requires entities to identify, measure and disclose all their gross greenhouse gas emissions, including those that require estimation, and to explain the methods used to measure those emissions. This includes emissions arising from land use and land use change.

For entities with a 31 December 2025 reporting date, the best available guidance was the LSR exposure draft. However, the final Standard was issued on 30 January 2026, before most entities will finalise and publish their first mandatory sustainability report.

As a result, while the Standard is not formally effective for the 31 December 2025 reporting period, it represents the most authoritative guidance available at the time of report finalisation. Using the final Standard to measure land-use and land-use change emissions aligns with AASB S2’s requirement to explain estimation methods and supports more robust, defensible disclosures.

Who should be paying attention

The LSR Standard is relevant to a broad range of entities, including those that:

• Own, manage or control land
• Source agricultural products or land-based commodities
• Have land use change impacts embedded in their value chains
• Are considering reporting on natural or technological carbon removals as part of their climate strategy.

Even where land-sector emissions are reported within Scope 3, the Standard introduces clearer expectations around boundary setting and the treatment of removals, which may require changes to existing data collection and estimation approaches.

What organisations should do now?

Organisations impacted by the land sector should consider:

• Assessing whether land use and land use change emissions are material to their emissions profile
• Reviewing existing methodologies used to estimate those emissions
• Identifying gaps between current practice and the approaches set out in the LSR Standard
• Planning for how the Standard will be applied consistently in future reporting periods.

Given the technical complexity of land sector accounting, entities are encouraged to refer directly to the GHG Protocol materials for detailed requirements, definitions and methodological guidance.

How BDO can help

We can help you assess whether land use and land use change emissions are material to your business and value chain, understand how the Land Sector and Removals Standard interacts with AASB S2, and review the methodologies and assumptions currently used to estimate land sector emissions and removals. We can also support you in identifying gaps between existing practices and GHG guidance, and in planning for the consistent and defensible application of the Standard in future reporting periods.

While the GHG Protocol remains the authoritative source for technical accounting requirements, our sustainability reporting specialists can help you interpret those requirements in practice for your organisation, your data, and your reporting timelines.