OA and Project-Level Finance

1. Outcome

This Circular provides guidance on using Ocean Accounts to support project-level finance instruments, including debt-for-nature swaps, blue bonds, payments for ecosystem services, and other sustainable finance mechanisms. It explains how accounting frameworks can strengthen the design, structuring, verification, and impact reporting of ocean-focused financial instruments while demonstrating how account data enable decision-makers to evaluate project-level interventions using internationally standardized baseline information.

Ocean Accounts provide an essential foundation for project-level finance by establishing baselines for marine and coastal natural capital, quantifying ecosystem service flows, and enabling verification of conservation and restoration outcomes. The 2025 System of National Accounts recognizes sustainable finance as a key measurement domain, defining ESG (Environmental, Social, Governance) finance and green finance as important components of financial instruments that sustain or improve environmental and social conditions.^[1] Ocean Accounts operationalize these concepts for marine contexts by providing the structured data needed to assess ocean-related risks, dependencies, and opportunities.

Sustainable ocean finance directly supports SDG 14 ("Life Below Water") targets, including Target 14.7 on increasing economic benefits from sustainable use of marine resources.^[2] The Kunming-Montreal Global Biodiversity Framework Target 15 further calls on businesses and financial institutions to regularly monitor, assess, and transparently disclose their nature-related risks, dependencies, and impacts--a requirement that Ocean Accounts are well-positioned to support.^[3]

Decision Use Cases

Project-level finance decisions supported by Ocean Accounts include:

1. Cost-benefit analysis for restoration projects -- Using ecosystem service values from Ocean Accounts to assess whether expected benefits of mangrove restoration, seagrass rehabilitation, or coral reef protection exceed project costs over the relevant time horizon.^[4]

2. TNFD-aligned impact reporting -- Demonstrating changes in ecosystem condition, extent, and service provision resulting from financed activities, meeting TNFD disclosure requirements for nature-related impacts and dependencies.^[5]

3. Project ROI assessment -- Calculating return on investment for blue economy projects by quantifying multiple ecosystem service benefits (carbon sequestration, coastal protection, fisheries habitat, tourism amenity) using comparable monetary valuation methods from TG-1.9 Safe Usage of Monetary Valuation.^[6]

4. Baseline and counterfactual scenarios -- Establishing pre-project conditions and projected no-action baselines against which project impacts can be measured, enabling additionality demonstration required by carbon credit standards and impact investors.^[7]

This Circular is relevant to project developers, conservation finance practitioners, sovereign debt managers, development finance institutions, and account compilers supporting sustainable ocean finance initiatives. Readers will understand how to leverage Ocean Accounts for structuring innovative finance instruments, establishing measurable conservation commitments, and meeting emerging disclosure requirements under frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) and IFRS Sustainability Disclosure Standards. The guidance builds on the multilateral finance context described in TG-1.7 OA and Multilateral Development Finance, the valuation methods presented in TG-1.9 Safe Usage of Monetary Valuation, and the ecosystem asset foundations in TG-3.1 Assets. It also supports the ecosystem-specific accounting methodologies in TG-6.2 Mangrove and Coastal Wetland Accounting and TG-6.3 Seagrass Ecosystem Accounting, which provide blue carbon measurement foundations relevant to many of the finance instruments discussed here.

2. Requirements

This Circular requires familiarity with:

• TG-0.1 General Introduction to Ocean Accounts -- for the conceptual framework and key components of Ocean Accounts
• TG-1.7 OA and Multilateral Development Finance -- for the multilateral finance context and how development finance institutions engage with ocean accounting
• TG-1.9 Safe Usage of Monetary Valuation -- for appropriate valuation methodology selection and the exchange value hierarchy
• TG-3.1 Assets -- for ecosystem asset accounting foundations and natural capital measurement

Related Circulars

For detailed guidance on specific topics referenced in this Circular, see:

• TG-2.6 Ocean-related Investment -- for investment indicator compilation using the GFCF framework
• TG-6.2 Mangrove and Coastal Wetland Accounting -- for blue carbon accounting in mangroves and coastal wetlands
• TG-6.3 Seagrass Ecosystem Accounting -- for seagrass carbon and ecosystem services measurement
• TG-6.9 Offshore Energy Thematic Methods -- for project-level accounting in offshore renewable energy developments

3. Guidance Material

3.1 Blue Bonds and Ocean-Linked Securities

Blue bonds are debt instruments where proceeds are earmarked for ocean conservation, sustainable marine resource management, or ocean-based climate adaptation.^[8] They represent a growing segment of sustainable finance, building on the success of green bonds while addressing ocean-specific challenges. Ocean Accounts provide the foundational information architecture needed to structure, monitor, and verify blue bond instruments.

Structuring Blue Bonds with Account Data

Ocean Accounts support blue bond structuring in several key ways:

1. Baseline Establishment: Ecosystem extent and condition accounts establish pre-project baselines for marine natural capital assets such as mangroves, seagrass meadows, coral reefs, and fish stocks. These baselines are essential for defining conservation targets and measuring additionality.^[9]

2. Service Quantification: Ecosystem service flow accounts quantify the value of services such as coastal protection, carbon sequestration, and fisheries production that blue bond proceeds aim to protect or enhance. The SEEA EA provides internationally recognized methodologies for valuing these services using exchange value concepts consistent with national accounts.^[10]

3. Use-of-Proceeds Verification: Physical supply and use tables enable tracking of how marine resources and ecosystem services are utilized, supporting verification that bond proceeds support intended ocean-positive activities.

4. Outcome Measurement: Time-series account data enables measurement of changes in ecosystem extent, condition, and service delivery, providing the basis for impact reporting to bondholders and regulators.

Sustainability-Linked Bond Structures

Beyond use-of-proceeds bonds, Ocean Accounts support sustainability-linked bonds (SLBs) where bond characteristics such as coupon rates are tied to achieving pre-defined sustainability performance targets.^[11] Account data can inform key performance indicators (KPIs) for ocean-linked SLBs, including:

• Changes in marine protected area extent (from extent accounts)
• Improvements in reef or mangrove ecosystem condition scores (from condition accounts)
• Sustainable fisheries catch rates relative to maximum sustainable yield (from flow accounts)
• Blue carbon sequestration rates (from carbon accounts)

The 2025 SNA recommends compilation of supplementary measures for sustainability-linked debt securities as "of which" items within the financial accounts framework, facilitating monitoring of these instruments.^[12]

Blue Bond KPI-Account Mapping

Table 1 illustrates how blue bond issuers can use Ocean Accounts data to report on key performance indicators. By linking each KPI category to a specific account source and measurement frequency, issuers can establish transparent, reproducible reporting frameworks that align with both investor expectations and statistical standards. This mapping is indicative; countries and issuers should adapt the KPI selection to their specific ocean contexts and bond covenants.

Table 1: Blue Bond KPI-Account Mapping

This mapping enables issuers to draw directly on compiled Ocean Accounts when preparing bondholder impact reports, ensuring that KPI metrics are grounded in internationally recognized accounting frameworks rather than ad hoc measurement approaches. For guidance on compiling the underlying condition and extent accounts referenced in Table 1, see TG-3.1 Assets.

3.2 Debt-for-Nature Swaps

Debt-for-nature swaps involve the restructuring of sovereign debt in exchange for commitments to conservation investments and outcomes. Ocean Accounts provide the technical foundation for quantifying conservation commitments, monitoring implementation, and verifying outcomes in marine debt swaps.

Quantifying Conservation Commitments

When structuring debt-for-nature swaps, parties must agree on the nature and scale of conservation commitments that justify debt relief. Ocean Accounts support this process by providing:

1. Asset Valuation: Monetary ecosystem asset accounts estimate the present value of expected ecosystem service flows from marine natural capital.^[13] These valuations inform negotiations over the conservation value being exchanged for debt relief. For guidance on appropriate valuation methods, see TG-1.9 Safe Usage of Monetary Valuation.

2. Spatial Prioritization: Spatially explicit extent and condition accounts help identify priority areas for conservation investment, ensuring debt swap proceeds target areas of highest ecological and economic value.

3. Commitment Specificity: Account structures provide the precision needed to define specific, measurable, achievable, relevant, and time-bound (SMART) conservation commitments, such as protecting a defined area of mangroves or achieving specified improvements in reef condition scores.

Monitoring and Verification

Post-swap monitoring requires systematic tracking of conservation outcomes over time. Ocean Accounts provide:

• Physical Accounts: Track changes in ecosystem extent (hectares of seagrass protected), condition (coral cover percentage), and flows (fish biomass sustained)
• Monetary Accounts: Quantify the economic value of ecosystem services protected or restored, enabling comparison with the cost of debt relief
• Governance Accounts: Document changes in protected area designation, management effectiveness, and enforcement capacity

Recent Debt-for-Nature Swap Experience

Recent high-profile debt-for-nature swaps demonstrate the growing scale and sophistication of these instruments, and the critical role that systematic environmental data plays in their design. The Seychelles debt swap (2018) restructured approximately USD 21 million of sovereign debt in exchange for marine protected area commitments covering 30 per cent of the country's exclusive economic zone. Belize (2021) completed a USD 553 million "blue bond" debt conversion that committed the country to expanding marine protection to 30 per cent of its ocean area and maintaining a marine conservation endowment fund. Ecuador (2023) executed the largest debt-for-nature swap to date, restructuring approximately USD 1.6 billion of debt in exchange for conservation commitments for the Galapagos Islands marine reserve. In each case, the structuring and ongoing monitoring of conservation commitments relied on systematic spatial and biophysical data of the kind that Ocean Accounts are designed to produce--including ecosystem extent baselines, condition indicators, and protected area management effectiveness metrics. These experiences underscore the value of pre-existing account compilation for countries seeking to negotiate debt-for-nature instruments.

Example: Blue Carbon in Debt Swaps

Coastal and marine ecosystems including mangroves, seagrass meadows, and salt marshes store significant quantities of carbon in biomass and sediments.^[14] Debt-for-nature swaps increasingly incorporate blue carbon commitments, where Ocean Accounts track:

• Extent of blue carbon ecosystems protected (extent accounts)
• Carbon stock density and sequestration rates (carbon accounts)
• Avoided emissions from prevented ecosystem degradation (flow accounts)
• Economic value of carbon storage services (monetary accounts)

For detailed methodology on blue carbon accounting, see TG-6.2 Mangrove and Coastal Wetland Accounting and TG-6.3 Seagrass Ecosystem Accounting.

3.3 Payments for Ecosystem Services

Payments for Ecosystem Services (PES) schemes create financial incentives for maintaining or enhancing ecosystem service provision. In marine and coastal contexts, PES schemes may target services including coastal protection, water quality regulation, fisheries habitat, and carbon sequestration.^[15] Ocean Accounts provide the measurement foundation for designing and operating effective ocean PES schemes.

Valuation Foundations for PES

The SEEA EA establishes a hierarchy of valuation methods appropriate for accounting purposes, with a preference for methods based on observable market prices or revealed preferences.^[16] For ocean PES schemes, relevant valuation approaches include:

1. Directly Observable Prices: Where ecosystem services are already traded in markets (e.g., recreational fishing licenses, dive permits), observed prices provide exchange values for accounting and PES pricing.

2. Resource Rent Methods: For provisioning services like fisheries, resource rent calculations estimate the ecosystem contribution to production by deducting labor, capital, and intermediate input costs from gross output value.^[17]

3. Replacement Cost Methods: For regulating services like coastal protection, replacement costs estimate what it would cost to provide equivalent protection through engineered infrastructure.^[18]

4. Productivity Change Methods: For supporting services that enhance economic production (e.g., nursery habitat supporting commercial fisheries), production function approaches estimate the marginal contribution of ecosystem inputs.^[19]

For comprehensive guidance on valuation methodology selection, see TG-1.9 Safe Usage of Monetary Valuation.

Designing Account-Based PES Schemes

Ocean Accounts support PES scheme design by:

1. Identifying Beneficiaries: Supply and use tables identify economic units that benefit from marine ecosystem services, informing who should pay for service provision.

2. Quantifying Services: Physical ecosystem service flow accounts measure the quantity of services provided (e.g., tonnes of carbon sequestered, hectares of shoreline protected), informing payment amounts.

3. Targeting Payments: Spatial accounts identify where ecosystem services are produced and consumed, enabling geographic targeting of payments to providers.

4. Monitoring Outcomes: Time-series accounts track whether service provision is maintained or enhanced under PES schemes.

Limitations and Considerations

The SEEA EA notes that data from payments for ecosystem services schemes should generally not be used directly to estimate prices for ecosystem services in accounts, unless there is clear evidence the scheme provides a proxy for market exchange of a specific service.^[20] Many PES payments are designed for income support or restoration funding rather than to reveal service prices. Account compilers should document the nature of PES schemes and exercise caution when using PES payment data for valuation purposes.

3.4 Carbon and Blue Carbon Finance

Blue carbon ecosystems--mangroves, seagrass meadows, tidal marshes, and kelp forests--sequester carbon at rates significantly higher per unit area than many terrestrial ecosystems.^[21] Carbon finance mechanisms including voluntary carbon markets, compliance markets, and results-based climate finance increasingly target blue carbon. Ocean Accounts provide essential measurement infrastructure for blue carbon finance.

Account-Based Carbon Quantification

Carbon accounts within the Ocean Accounts framework measure:

1. Carbon Stocks: Total carbon stored in ecosystem biomass and sediments, measured in tonnes of carbon per ecosystem type and location.

2. Sequestration Flows: Annual carbon uptake and storage by blue carbon ecosystems, providing the basis for calculating annual carbon credits.

3. Emission Flows: Carbon releases from ecosystem degradation or destruction, informing avoided deforestation/degradation (REDD+) style crediting approaches.

4. Net Carbon Balance: The difference between sequestration and emissions, indicating whether an ecosystem is a net carbon sink or source.

Verification Requirements

Carbon credit issuance requires robust measurement, reporting, and verification (MRV). Ocean Accounts contribute to MRV by:

• Establishing baselines against which additionality can be assessed
• Providing standardized methodologies for carbon quantification aligned with IPCC guidelines
• Enabling independent verification through transparent, replicable account compilation
• Supporting permanence monitoring through time-series tracking of carbon stocks

When selecting a crediting standard, project developers should ensure that the chosen methodology aligns with the carbon quantification approaches used in the underlying Ocean Accounts. Several major voluntary carbon market standards--including the Verified Carbon Standard (VCS, administered by Verra), the Gold Standard, and the American Carbon Registry--have developed or are developing blue carbon methodologies. These standards differ in their requirements for baseline setting, additionality demonstration, permanence buffers, and leakage assessment. Account compilers can support project developers by ensuring that the physical carbon stock and flow data compiled in Ocean Accounts are structured to meet the data requirements of the relevant crediting standard, while maintaining the methodological consistency needed for national-level reporting. The choice of standard is a project-level decision; this Circular does not recommend one standard over another but emphasizes the importance of consistency between project-level MRV and national account compilation.

Integration with Ecosystem Service Accounts

Blue carbon ecosystems provide multiple ecosystem services beyond carbon sequestration, including coastal protection, fisheries habitat, and water quality regulation.^[22] Ocean Accounts enable integrated valuation across multiple services, informing decisions about:

• Stacking carbon credits with payments for other services
• Prioritizing restoration investments based on total service value
• Avoiding perverse incentives that might optimize carbon at the expense of other services

For ecosystem-specific carbon accounting guidance, see TG-6.2 Mangrove and Coastal Wetland Accounting.

3.5 Disclosure and Verification Requirements

Project-level ocean finance increasingly operates within disclosure frameworks that require systematic reporting on nature-related risks, dependencies, impacts, and opportunities. Ocean Accounts provide the data foundation for meeting emerging disclosure requirements.

TNFD Alignment

The Taskforce on Nature-related Financial Disclosures (TNFD) recommends 14 disclosures covering governance, strategy, risk and impact management, and metrics and targets for nature-related issues.^[23] Ocean Accounts support TNFD-aligned disclosure by providing:

1. Location Data: Spatial ecosystem extent accounts identify where business activities interact with ocean ecosystems, supporting TNFD Strategy Disclosure D on locations of assets in priority areas.^[24]

2. Dependency Assessment: Ecosystem service supply and use tables quantify business dependencies on marine ecosystem services, informing Strategy Disclosure A on nature-related dependencies.

3. Impact Measurement: Physical flow accounts track pressures on marine ecosystems from economic activities, supporting Risk & Impact Management disclosures.

4. Metrics and Targets: Account-derived indicators provide standardized metrics for nature-related disclosure, including ecosystem extent, condition, and service flow indicators.

The TNFD explicitly recognizes the value of sustainable finance instruments, including Additional Global Disclosure Metric A16.0: "Value of green finance instruments used, such as green bonds and sustainability-linked bonds."^[25]

The TNFD has also published sector-specific guidance relevant to ocean industries, including guidance for aquaculture, fisheries, and marine transport sectors. These sector pathways identify priority metrics related to water quality, biodiversity impacts, and resource use that can be populated using data from Ocean Accounts. Financial institutions and enterprises operating in ocean industries should consult the relevant TNFD sector guidance alongside this Circular to identify the specific account-derived indicators most relevant to their disclosure obligations.

IFRS Sustainability Standards

IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) establish a global baseline for sustainability disclosure.^[26] While initially focused on climate, the ISSB framework increasingly addresses nature. Ocean Accounts support IFRS-aligned disclosure by:

• Providing climate-related data on blue carbon stocks and flows
• Quantifying material dependencies on marine natural capital
• Enabling scenario analysis of nature-related risks
• Supporting targets and transition planning for nature-positive outcomes

The IFRS foundation has emphasized that an organization's ability to generate cash flows is "inextricably linked to the interactions between the entity and its stakeholders, society, the economy and the natural environment throughout the entity's value chain."^[27]

Verification and Assurance

Third-party assurance of sustainability disclosures requires verifiable underlying data. Ocean Accounts compiled according to international statistical standards provide:

• Transparent methodologies that can be independently reviewed
• Documented data sources and quality indicators
• Time-series consistency enabling trend verification
• Spatial precision supporting site-specific assurance

3.6 Downward Connections to Accounts, Indicators, and Data

Project-level finance decisions require linking high-level policy objectives to specific accounting structures, indicators, and data sources. This section describes how Ocean Accounts translate strategic finance objectives into operational measurement frameworks.

Account Components Supporting Project Finance

Project finance instruments draw on multiple Ocean Account components:

Ecosystem Condition Accounts: Provide baseline and monitoring data for ecosystem health indicators referenced in bond covenants, PES agreements, and debt swap commitments. Condition indicators include species richness, structural complexity, water quality parameters, and functional state metrics. For methodology, see TG-3.1 Assets.

Ecosystem Extent Accounts: Track changes in spatial coverage of marine habitats resulting from conservation or restoration investments. Extent changes enable verification of protection commitments in debt-for-nature swaps and blue bonds. Spatial data should be compiled in formats compatible with project boundaries defined in finance agreements.

Ecosystem Service Flow Accounts: Quantify physical and monetary flows of provisioning, regulating, and cultural services. Service flow accounts provide the basis for valuing project benefits in cost-benefit analysis and for structuring PES payment schedules.

Asset Accounts: Record opening stocks, additions, reductions, and closing stocks of marine ecosystem assets. Asset accounts enable net present value calculations used in restoration project appraisal and in valuing conservation commitments for debt swaps.

Key Indicators for Project-Level Decisions

Table 2 identifies key indicators derived from Ocean Accounts that support common project-level finance decisions, specifying the account source and typical application context.

Table 2: Project Finance Indicators from Ocean Accounts

Data Requirements and Sources

Effective project-level application requires fit-for-purpose data at appropriate spatial and temporal resolution:

• Spatial resolution: Project boundaries typically range from <1 km² (local restoration sites) to 10,000s km² (large marine protected areas). Account data should be compiled at Basic Spatial Unit (BSU) resolution that enables aggregation to project scales.

• Temporal frequency: Finance instruments require baseline measurements (pre-project), implementation monitoring (annual or more frequent), and ex-post evaluation (typically 3-10 years post-project). Account compilation cycles should align with financing instrument reporting requirements.

• Data sources: Combining remote sensing (for extent and some condition indicators), field surveys (for detailed biophysical parameters), administrative data (for economic activity and regulatory enforcement), and scientific studies (for service flow quantification and valuation coefficients).

3.7 Worked Example: Mangrove Restoration Project Cost-Benefit Analysis

This section presents a synthetic worked example demonstrating how Ocean Accounts data support cost-benefit analysis for a coastal mangrove restoration project. The example is entirely illustrative and uses simplified assumptions to demonstrate accounting logic; actual project appraisals would draw on site-specific biophysical and economic data.

Project Context

A coastal state proposes to restore 200 hectares of degraded mangrove habitat in a coastal lagoon system. The restoration involves hydrological reconnection, seedling planting, and management of invasive species over a 5-year implementation period. Project costs are estimated at USD 3 million (capital costs) plus USD 200,000 per year (ongoing management) over a 20-year evaluation horizon.

Account-Based Baseline

Ocean Accounts provide pre-project baseline data:

Project Scenario: Ecosystem Changes

Post-restoration trajectory based on comparable restoration projects (Years 0-20):

Ecosystem Service Valuation

Using methods from TG-1.9 Safe Usage of Monetary Valuation and the SEEA Valuation Guidelines:

Coastal Protection Service (Avoided Damage Cost Method, Tier 1)

Mangrove restoration reduces flood risk to 150 coastal properties. Based on flood risk modeling, expected annual damages decline from USD 400,000 (baseline) to USD 100,000 (post-restoration). Annual benefit = USD 300,000/year (reached at Year 10; linear increase Years 0-10).

Blue Carbon Sequestration (Directly Observable Prices, Tier 3)

Restored mangroves sequester carbon at an average rate of 2.5 tC/ha/year over the 20-year horizon. At 200 ha and a carbon price of USD 15/tCO2e (voluntary market), annual carbon benefit = 200 ha × 2.5 tC/ha/yr × 3.67 tCO2e/tC × USD 15/tCO2e = USD 27,500/year (Years 5-20, zero Years 0-5 due to establishment lag).

Fisheries Productivity Enhancement (Productivity Change Method, Tier 3)

Production function analysis indicates that each 10% improvement in nursery habitat quality increases local fishery catch value by USD 25,000/year. From baseline (10%) to mature condition (90%), the fishery benefit reaches USD 200,000/year (linear increase over 20 years).

Cost-Benefit Analysis Results

Table 3: Project CBA Summary (20-year horizon, 4% discount rate)

Interpretation

The positive NPV indicates the project generates net economic benefits over the 20-year horizon. The benefit-cost ratio of 1.09 suggests the project is economically viable but not highly profitable, which is typical for ecosystem restoration where non-monetized co-benefits (biodiversity, cultural services, resilience) are significant but not captured in exchange-value-based CBA.

Sensitivity to Valuation Assumptions

Project viability is sensitive to key assumptions:

• Discount rate: At 3% (lower rate reflecting long-term social preference), NPV increases to USD 1.2 million; at 6% (higher rate), NPV becomes negative (-USD 0.8 million).
• Carbon price: At USD 30/tCO2e (premium voluntary market), carbon benefit doubles to USD 0.6 million, increasing BCR to 1.19.
• Coastal protection: If storm surge damages are underestimated and true baseline risk is USD 600,000/year, coastal protection benefit increases to USD 5.7 million, yielding NPV of USD 2.4 million.

Account Integration

This CBA draws entirely on Ocean Accounts components:

• Extent and condition baselines establish the "no action" counterfactual.
• Carbon accounts provide sequestration rates consistent with IPCC methodologies.
• Service flow accounts (coastal protection, fisheries nursery) provide the physical and monetary valuation basis.
• Spatial accounts enable allocation of benefits to specific beneficiary groups (coastal property owners, fishing communities).

Project developers preparing finance proposals for multilateral development banks or impact investors can reference this account-based CBA structure to demonstrate alignment with international statistical standards while meeting MDB economic analysis requirements described in TG-1.7 OA and Multilateral Development Finance.

3.8 Application Procedure for Project Developers

This section provides a step-by-step procedure for project developers seeking to use Ocean Accounts to structure project-level finance instruments. The procedure assumes that national or subnational Ocean Accounts have been compiled and are accessible to project developers, or that project-specific accounting can be undertaken using SEEA-consistent methodologies.

Step 1: Define Project Scope and Boundaries

Identify the geographic extent, temporal horizon, and intended outcomes of the financed activity:

• Map project boundaries to Ocean Accounts spatial units (Basic Spatial Units or aggregated zones)
• Specify project timeline (implementation period, monitoring duration, benefit accrual period)
• List intended conservation, restoration, or sustainable use outcomes in measurable terms

Step 2: Establish Account-Based Baselines

Extract pre-project baseline data from Ocean Accounts or compile project-specific accounts:

• Ecosystem extent and condition for relevant habitat types (mangroves, seagrass, coral reefs, etc.)
• Current ecosystem service flows (provisioning, regulating, cultural services)
• Economic activity levels (fisheries extraction, tourism, coastal development)
• Carbon stocks and sequestration rates (for blue carbon projects)

Consult TG-3.1 Assets for extent and condition account methodology and relevant ecosystem-specific circulars (e.g., TG-6.2 Mangrove and Coastal Wetland Accounting) for detailed measurement guidance.

Step 3: Define Counterfactual and Project Scenarios

Develop "without project" and "with project" scenarios:

• Counterfactual (baseline): Project ecosystem trajectories under business-as-usual (e.g., continued degradation, stable but low condition, regulatory-driven slow improvement)
• Project scenario: Project ecosystem trajectories with intervention (e.g., extent increase from restoration, condition improvement from management, service flow enhancement)

Scenario development should be grounded in scientific evidence from comparable projects and ecological understanding of recovery trajectories.

Step 4: Value Ecosystem Service Changes

Apply valuation methods from TG-1.9 Safe Usage of Monetary Valuation to quantify project benefits:

• Identify ecosystem services affected by the project (e.g., coastal protection, carbon sequestration, fisheries habitat)
• Select appropriate valuation methods following the SEEA preference order (directly observable prices > resource rent > replacement cost > avoided damage)
• Calculate annual ecosystem service values under counterfactual and project scenarios
• Compute incremental benefits as the difference between scenarios

For project-level cost-benefit analysis submitted to multilateral development banks, supplement exchange values from accounts with welfare values as described in TG-1.7 OA and Multilateral Development Finance Section 3.2.

Step 5: Structure Finance Instrument

Design the finance instrument drawing on account data:

For blue bonds:

• Define KPIs linked to account indicators (e.g., extent protected, condition index change, service flow targets)
• Establish KPI measurement protocols consistent with account compilation cycles
• Specify reporting frequency and verification mechanisms

For debt-for-nature swaps:

• Quantify conservation commitments using monetary ecosystem asset accounts (NPV of service flows)
• Translate commitments into SMART targets (e.g., "protect 10,000 hectares of mangrove with condition index >60 by Year 5")
• Define monitoring frameworks using account structures

For PES schemes:

• Identify service beneficiaries using supply and use table structures
• Set payment levels based on ecosystem service values from accounts
• Design payment triggers linked to account-measurable outcomes (extent maintained, condition improved, service delivery verified)

Step 6: Establish Monitoring and Reporting Framework

Align project monitoring with Ocean Accounts compilation:

• Schedule monitoring activities to coincide with national account compilation cycles where feasible
• Use consistent methodologies for extent, condition, and service flow measurement
• Adopt spatial data formats compatible with national Ocean Accounts (enable aggregation of project data into national totals)
• Prepare for third-party verification by documenting data sources, methods, and quality indicators

Step 7: Prepare Disclosure Documents

Prepare project disclosure materials aligned with TNFD and IFRS standards:

• Location disclosure: Map project area in relation to priority biomes and protected areas
• Dependency disclosure: Identify and quantify project dependencies on marine ecosystem services using supply and use table logic
• Impact disclosure: Quantify positive impacts (ecosystem extent increase, condition improvement) using account metrics
• Target disclosure: Specify quantitative targets for ecosystem outcomes using account-derived indicators

Consult TNFD sector guidance for ocean industries to identify sector-specific disclosure metrics relevant to the project.

3.9 Practical Implementation Considerations

Building Account-Finance Linkages

Implementing Ocean Accounts for project-level finance requires coordination between:

• National Statistical Offices: Responsible for compiling accounts according to official statistics principles
• Environmental Agencies: Providing biophysical data on ecosystem extent, condition, and services
• Finance Ministries: Integrating account data into sovereign debt management and public finance
• Project Developers: Using account frameworks for project design and impact assessment
• Financial Institutions: Incorporating account data into due diligence and monitoring

Data Requirements

Effective use of Ocean Accounts for finance requires:

1. Baseline Data: Pre-project extent, condition, and service flow data against which changes can be measured
2. Monitoring Frequency: Account compilation schedules aligned with financial reporting cycles
3. Spatial Resolution: Data at scales relevant to project boundaries and impacts
4. Uncertainty Documentation: Clear communication of data quality and limitations

Capacity Building

Many countries require capacity building to compile and use Ocean Accounts for finance, including:

• Training for account compilers on finance-relevant account applications
• Guidance for financial institutions on interpreting and using account data
• Development of standardized indicators linking accounts to financial instrument requirements
• Establishment of institutional arrangements for ongoing account compilation and dissemination

SDG 14 Indicator Linkages

Ocean Accounts provide a direct measurement foundation for several SDG 14 indicators relevant to project-level finance. SDG indicator 14.7.1--sustainable fisheries as a proportion of GDP--can be derived from the economic activity accounts by identifying the value added of sustainably managed fisheries relative to total GDP.^[28] SDG indicator 14.a.1--the proportion of total research budget allocated to marine research--can be compiled from government expenditure accounts classified by function. These indicators, when compiled through Ocean Accounts, provide standardized metrics that project-level finance instruments can reference in their impact reporting frameworks. For example, a blue bond whose proceeds support sustainable fisheries management can report on its contribution to SDG 14.7.1 using data compiled within the same accounting framework that underpins the bond's KPI monitoring.

4. Acknowledgements

This Circular has been approved for public circulation and comment by the GOAP Technical Experts Group in accordance with the Circular Publication Procedure.

Authors: UNSW, IUCN, Australian Government

Reviewers: Dan Whitaker

5. References