Appendix C: SEEA EA Accounts Mapped to NbS Project Scale

The System of Environmental-Economic Accounting --- Ecosystem Accounting (SEEA EA) was adopted by the United Nations Statistical Commission in March 2021 as an international statistical standard for organising data about ecosystems and their contributions to the economy and human well-being [1]. The framework was designed primarily for national-level statistical offices to construct accounts that measure the extent, condition, and service flows of ecosystems within national boundaries, and to value those ecosystems as assets within a System of National Accounts-compatible structure.

However, the SEEA EA framework is explicitly scale-independent. The Technical Recommendations on the SEEA EA note that "the accounting structure can be applied at any spatial scale --- global, national, sub-national, or site level --- provided that the ecosystem types are defined and spatially delineated" [2]. This property makes SEEA EA directly applicable to NbS project accounting, where the "accounting area" is the project boundary rather than the national territory, and the "reporting entity" is the project sponsor or the financing institution rather than the national statistical office.

This appendix maps each of the five core SEEA EA account types to NbS project-scale application. For each account type, it specifies the national-level purpose, the project-level adaptation, the data requirements for project-scale implementation, a worked example using a mangrove restoration project, and the connection to the NbS rating methodology presented in Section 4 (Layer 3) of this report.

1. Ecosystem Extent Account

1.1 Definition

The Ecosystem Extent Account records the total area of ecosystem assets classified by ecosystem type within a defined accounting area. It measures the opening area at the start of an accounting period, the closing area at the end of the period, and the additions and reductions that explain the change between the two dates [1]. Additions include managed expansion (e.g., restoration planting), natural regeneration, and reclassification from a degraded type to a higher-quality type. Reductions include conversion to a different land use (e.g., forest to agriculture), degradation below the threshold for classification as the original type, and loss from natural disturbance.

1.2 National-Level Application

At national scale, ecosystem extent accounts aggregate the total area of each ecosystem type within national boundaries. Australia's Bureau of Meteorology and the Australian Bureau of Statistics have produced experimental ecosystem extent accounts showing, for example, that between 2011 and 2021 Australia's native forest extent declined by approximately 0.7 million hectares while grassland extent increased by approximately 1.2 million hectares, reflecting both land clearing and land abandonment dynamics [3]. Indonesia's pilot SEEA EA accounts for Kalimantan mapped the extent of peat swamp forest, lowland dipterocarp forest, and mangrove across four provinces, tracking the loss of approximately 2.3 million hectares of forest between 2000 and 2020 [4].

1.3 Project-Level Application

At NbS project scale, the ecosystem extent account records:

• Opening extent: the total area (in hectares) of each ecosystem type within the project boundary at the commencement of the accounting period (typically the project's baseline date or the date of the most recent rating assessment).
• Additions: hectares of ecosystem restored, regenerated, or reclassified upward (e.g., degraded mangrove reclassified as functional mangrove following successful replanting and natural regeneration).
• Reductions: hectares of ecosystem converted, degraded, or lost (e.g., mangrove area lost to coastal erosion, encroachment, or storm damage).
• Closing extent: the total area of each ecosystem type at the end of the accounting period.
• Net change: closing extent minus opening extent, expressed in hectares and as a percentage of opening extent.

The extent account provides the foundational spatial metric for the NbS rating methodology's Ecosystem Extent Change sub-indicator (Section 4.3 of the main report). A project demonstrating a net increase of 10% or more in ecosystem extent receives the highest score (5), while a project experiencing net loss receives the lowest score (1).

1.4 Data Requirements at Project Scale

1.5 Worked Example: Mangrove Restoration Project, Mekong Delta, Vietnam

Project context: A community-led mangrove restoration project in Ca Mau and Ben Tre provinces, Mekong Delta, Vietnam. Total project boundary area: 2,400 hectares. The project commenced in 2018 on degraded aquaculture ponds and coastal mudflats with relict mangrove stands.

Extent Account (Assessment Period: 2018--2023)

Interpretation: Total mangrove extent (functional plus degraded) increased by 12.4%, exceeding the 10% threshold for the highest extent change score (5) in the NbS rating methodology. The reclassification of 120 ha from degraded to functional mangrove represents a qualitative improvement captured in the Condition Account (see below). The slight reduction in total project area (-20 ha) reflects coastal erosion dynamics at the southern boundary, a physical process that does not indicate project failure but warrants monitoring. The extent account distinguishes between these dynamics by recording additions and reductions separately rather than reporting only net change.

1.6 Connection to Rating Methodology

The Ecosystem Extent Account provides the primary data input for the Environmental Domain's first sub-indicator: Ecosystem Extent Change. The net percentage change in total ecosystem extent (mangrove, forest, peatland, or other NbS-relevant ecosystem type) is assessed against the five-point scoring scale specified in Section 4.3 of the main report. The extent account also provides the denominator (total hectares) used to normalise ecosystem services delivery and cost-effectiveness calculations in the Economic Domain.

2. Ecosystem Condition Account

2.1 Definition

The Ecosystem Condition Account measures the quality or health of ecosystem assets using a suite of biotic and abiotic indicators, each assessed against a reference condition that represents the state of the ecosystem in the absence of significant human degradation [1]. Indicators are normalised to a 0--1 scale, where 1.0 represents reference condition and 0.0 represents complete degradation. Individual indicators are then aggregated into a composite Ecosystem Condition Index (ECI) for each ecosystem type.

The SEEA EA Technical Recommendations specify that reference condition should be "the best available condition for the ecosystem type in the same biogeographic region" [2]. For NbS projects, this means that the reference is not an idealised pristine state but rather the best condition observed in comparable, relatively undisturbed sites within the same region. This approach ensures that condition scores are achievable rather than aspirational.

2.2 Structure

The Condition Account is structured around three indicator groups:

1. Biotic indicators: measures of the living components of the ecosystem, including species richness, vegetation structure (canopy height, basal area, stem density), habitat connectivity, and presence/absence of indicator species.
2. Abiotic indicators: measures of the physical and chemical environment, including water table depth, soil organic carbon concentration, water quality parameters (dissolved oxygen, turbidity, salinity, nutrient loading), sediment accretion rates, and hydrological regime integrity.
3. Landscape-level indicators: measures of the ecosystem's spatial configuration and context, including patch size, edge-to-area ratio, connectivity to adjacent ecosystems, and buffer zone integrity.

2.3 National-Level Application

National-level condition accounts aggregate indicator values across all patches of a given ecosystem type. The European Union's SEEA EA pilot accounts assessed the condition of European forests using indicators including tree cover density, deadwood volume, bird species index, and nitrogen deposition exposure, producing composite condition scores for 23 forest types across EU member states [5]. Australia's experimental condition accounts used satellite-derived fire regime, vegetation cover persistence, and habitat condition indices to assess the condition of Australian terrestrial ecosystems at the statistical area level [3].

2.4 Project-Level Application

At NbS project scale, the Condition Account records:

• Reference condition values: the indicator values observed at the best available reference site(s) for the same ecosystem type in the same biogeographic region. For a mangrove restoration project in the Mekong Delta, the reference site would be an intact, undisturbed mangrove stand in the same tidal zone and salinity regime.
• Baseline condition values: the indicator values observed at the project site at the commencement of the accounting period.
• Current condition values: the indicator values observed at the most recent assessment date.
• Indicator-level condition scores: each indicator's current value divided by its reference value, normalised to 0--1.
• Composite Ecosystem Condition Index: the aggregate of normalised indicator scores, weighted according to ecological significance or averaged equally.

2.5 Indicators by NbS Typology

The SEEA EA framework allows flexibility in indicator selection, provided that indicators are relevant to the ecosystem type and can be measured consistently over time. The following table specifies the recommended indicators for each NbS typology used in this report:

2.6 Data Requirements at Project Scale

2.7 Worked Example: Mangrove Restoration Project, Mekong Delta, Vietnam

Reference site: An intact mangrove stand in the Ca Mau National Park buffer zone, same tidal zone and salinity regime as the project site. Reference condition indicators were measured through a comprehensive ecological survey in 2018.

Condition Account (Assessment Period: 2018--2023)

Interpretation: The composite Ecosystem Condition Index improved from 0.23 (severely degraded) at baseline to 0.64 (good condition) after five years of active restoration and natural regeneration. This improvement of +0.41 reflects substantial ecological recovery across all indicator groups. Biotic indicators show the strongest recovery (average normalised score improvement of +0.40), driven by canopy growth and colonisation by fauna. Abiotic indicators improved as tidal connectivity was restored through the removal of aquaculture pond bunds. Landscape indicators show the weakest recovery (average improvement of +0.35) because patch consolidation and shoreline connectivity take longer to develop than within-patch condition improvements.

The current ECI of 0.64 falls within the "Good condition" band (0.60--0.79) of the NbS rating methodology, scoring 4 on the Ecosystem Condition Index sub-indicator.

2.8 Connection to Rating Methodology

The Ecosystem Condition Account provides the primary data input for the Environmental Domain's second sub-indicator: Ecosystem Condition Index. The composite ECI value is assessed against the five-point scoring scale in Section 4.3. The condition trajectory (change in ECI over the assessment period) also informs the TNFD LEAP assessment's Evaluate phase, providing evidence of positive or negative impact on ecosystem health.

3. Ecosystem Service Supply and Use Account (Physical)

3.1 Definition

The Ecosystem Service Supply and Use Account (Physical) records the quantity of ecosystem services generated by ecosystem assets and used by economic units, measured in biophysical units [1]. Unlike carbon-only accounting, which captures a single regulating service, the physical service account captures the full suite of services across three categories:

• Provisioning services: tangible material outputs extracted from ecosystems, including timber, non-timber forest products (honey, rattan, medicinal plants, resin), fisheries catch, freshwater supply, and genetic resources.
• Regulating services: functions provided by ecosystem processes that moderate environmental conditions, including carbon sequestration and storage, water purification and filtration, coastal protection from storm surge and erosion, flood mitigation, pollination, pest and disease regulation, and air quality regulation.
• Cultural services: non-material benefits derived from ecosystems, including recreation and tourism, aesthetic appreciation, spiritual and religious significance, educational and scientific value, and cultural identity.

3.2 National-Level Application

National-level physical service accounts aggregate ecosystem service flows across all ecosystems within the national boundary. The United Kingdom's Office for National Statistics has produced physical ecosystem service accounts covering carbon sequestration (118 million tonnes CO2e/yr), timber provisioning (11.5 million m3/yr), water purification (estimated through avoided treatment costs), crop pollination (valued at GBP 690 million/yr), and recreation visits (3.2 billion visits/yr to natural environments) [6]. These accounts enable governments to assess the contribution of ecosystems to economic welfare and to identify service flows at risk from ecosystem degradation.

3.3 Project-Level Application

At NbS project scale, the physical service account records:

• Service type: each distinct ecosystem service generated by the project site.
• Biophysical unit: the appropriate measurement unit for each service (e.g., tCO2e/yr for carbon sequestration, km of coastline protected for coastal protection, tonnes/yr for fisheries yield, visitor-days/yr for recreation).
• Reference-condition flow: the estimated service delivery from the same area in reference condition, providing a benchmark for assessing the project's service delivery as a proportion of its potential.
• Current flow: the actual measured or modelled service delivery during the accounting period.
• Percentage of reference: current flow divided by reference-condition flow, expressed as a percentage. This metric feeds directly into the NbS rating methodology's Ecosystem Services Delivery sub-indicator.

3.4 Data Requirements at Project Scale

3.5 Worked Example: Mangrove Restoration Project, Mekong Delta, Vietnam

Physical Ecosystem Service Account (Annual, 2023)

Interpretation: The project delivers approximately 62% of reference-condition ecosystem services across all categories. Regulating services (carbon, coastal protection, water purification) are the strongest performers at 65--67% of reference, reflecting the relatively rapid recovery of these functions as mangrove biomass and root structure develop. Provisioning services are lower (42--53%) because fisheries productivity and NTFP availability require more mature ecosystems with greater structural complexity. Cultural services are the weakest (38% for recreation) because the eco-tourism programme is in early development, though educational use is high (80%) due to the project's partnership with Vietnamese universities and international research institutions.

The aggregate service delivery of 62% falls within the "Delivering 60% to 79% of reference-condition services" band, scoring 4 on the Ecosystem Services Delivery sub-indicator of the NbS rating methodology.

3.6 Connection to Rating Methodology

The Physical Ecosystem Service Supply and Use Account provides the primary data input for the Environmental Domain's third sub-indicator: Ecosystem Services Delivery. The percentage-of-reference metric ensures cross-ecosystem comparability: a mangrove delivering 65% of its reference services and a peatland delivering 65% of its reference services are scored equivalently, even though the underlying services differ entirely. The physical service account also provides the foundation for the monetary valuation in the Monetary Ecosystem Service Account (Section 4 below) and feeds into TNFD LEAP Evaluate phase disclosures on the organisation's positive impacts on nature.

4. Ecosystem Service Supply and Use Account (Monetary)

4.1 Definition

The Ecosystem Service Supply and Use Account (Monetary) assigns monetary values to the physical flows of ecosystem services recorded in the physical service account [1]. Monetary valuation enables comparison of ecosystem service values with other economic flows in the System of National Accounts, supports cost-benefit analysis of NbS interventions, and provides the inputs for the Monetary Ecosystem Asset Account (Section 5).

4.2 Valuation Methods

The SEEA EA specifies that monetary valuation should use exchange values --- the prices at which services would be traded in markets --- where these are observable. Where market prices are not available, the framework allows the following valuation approaches [1][2]:

4.3 Project-Level Application

At NbS project scale, the monetary service account translates each physical service flow into an annual monetary value using the most appropriate valuation method. The total annual ecosystem service value provides a measure of the project's contribution to economic welfare and serves as the numerator in the net present value calculation for the Monetary Ecosystem Asset Account.

4.4 Worked Example: Mangrove Restoration Project, Mekong Delta, Vietnam

Monetary Ecosystem Service Account (Annual, 2023, in US$)

Interpretation: The mangrove restoration project generates an estimated US$1.29 million per year in ecosystem services. Coastal protection dominates the service value (40.3%), followed by carbon sequestration (29.1%) and fisheries (14.0%). This distribution is consistent with the global literature on mangrove ecosystem service valuation, which consistently finds that the non-carbon services of mangroves --- particularly coastal protection and fisheries --- exceed the value of carbon storage alone [7][8]. This finding underscores the limitation of carbon-only rating frameworks: a carbon-only assessment would capture less than one-third of this project's total economic value.

The monetary service account also reveals the project's revenue model structure. Of the US$1.29 million in total service value, only three categories currently generate market-based revenue: carbon credits (US$375,000), fisheries (US$180,000), and eco-tourism (US$125,000), totalling US$680,000 per year. The remaining US$609,200 (47.3%) represents non-market value --- coastal protection and water purification --- that benefits the broader community but does not generate direct project revenue. This gap between total ecosystem value and capturable revenue is a key consideration for the Economic Domain of the NbS rating.

4.5 Connection to Rating Methodology

The Monetary Ecosystem Service Account provides data for both the Environmental Domain (by expressing the diversity and magnitude of service flows in comparable monetary terms) and the Economic Domain (by establishing the total economic value that the project generates, which is then compared to project costs in the cost-effectiveness sub-indicator). The monetary values also feed into the Monetary Ecosystem Asset Account, where they are discounted to produce the project's net present value.

5. Monetary Ecosystem Asset Account

5.1 Definition

The Monetary Ecosystem Asset Account records the monetary value of the ecosystem asset itself, calculated as the net present value (NPV) of the expected stream of ecosystem services over the asset's expected life or the project's crediting/management period [1]. This is analogous to the way a financial asset's value is determined by the discounted sum of its expected future cash flows. The SEEA EA framework treats ecosystems as capital assets that produce a flow of services (analogous to interest or dividend income), and the asset value is the capitalised value of that flow.

5.2 Calculation Methodology

The NPV is calculated as:

NPV = Sum from t=1 to T of [ES(t) / (1 + r)^t]

Where:

• ES(t) = total annual ecosystem service value in year t (from the Monetary Ecosystem Service Account)
• r = discount rate
• T = project lifetime or assessment horizon (in years)

The SEEA EA Technical Recommendations suggest using the social discount rate appropriate to the jurisdiction [2]. For ASEAN NbS projects, a real discount rate of 5% is commonly applied, consistent with rates used by multilateral development banks for environmental and social project appraisal in developing countries [9]. Sensitivity analysis at 3% and 8% discount rates is recommended to assess the robustness of asset valuations.

5.3 Project-Level Application

At NbS project scale, the monetary ecosystem asset account requires:

• Service flow projections: annual ecosystem service values projected over the project lifetime, incorporating assumptions about ecosystem condition trajectory (improving, stable, or declining), market price trends for traded services (carbon credits, timber, fisheries), and the development of currently nascent service flows (eco-tourism, NTFP).
• Discount rate selection: the social discount rate appropriate to the project jurisdiction, adjusted for project-specific risk where appropriate.
• NPV calculation: the discounted sum of projected service flows.
• Sensitivity analysis: NPV calculated under base-case, optimistic, and pessimistic scenarios to assess the range of plausible asset values.

5.4 Worked Example: Mangrove Restoration Project, Mekong Delta, Vietnam

Asset Valuation Assumptions:

• Project lifetime: 25 years (consistent with VCS crediting period for tidal wetland projects)
• Base-case discount rate: 5% real
• Service flow growth: regulating services assumed to grow at 3% per year for years 1--10 (reflecting continued ecosystem maturation) and stabilise thereafter; provisioning services assumed to grow at 5% per year for years 1--8 (reflecting eco-tourism and fisheries development) and 2% per year thereafter; cultural services assumed to grow at 8% per year for years 1--5 and 3% per year thereafter.
• Annual service value in year 1 (2023): US$1,289,200 (from the Monetary Ecosystem Service Account above).

NPV Calculation Summary

Interpretation: Under base-case assumptions, the mangrove restoration project has a monetary ecosystem asset value of approximately US$22.4 million. This represents the capitalised value of 25 years of ecosystem service flows, discounted at a 5% real rate. The asset value is sensitive to the discount rate: at 3%, the asset is worth 54% more; at 8%, 43% less. This sensitivity underscores the importance of discount rate selection in NbS valuation and the need for transparent disclosure of assumptions.

For comparison, the project's total cost over 25 years (including initial planting, ongoing management, monitoring, community programmes, and administration) is estimated at US$8.5 million in present-value terms. The benefit-cost ratio under base-case assumptions is therefore 2.6:1, indicating that the project generates more than two and a half dollars of ecosystem value for every dollar invested. This ratio provides strong evidence for the Economic Domain's financial viability and cost-effectiveness sub-indicators.

5.5 Connection to Rating Methodology

The Monetary Ecosystem Asset Account provides the primary data input for the Economic Domain's Financial Viability sub-indicator. A positive NPV under base-case assumptions is a prerequisite for scores of 3 or above. The benefit-cost ratio and the NPV under stress scenarios (pessimistic case) inform the assessment of revenue model resilience. The asset value also enables the bank to assess the NbS project as a balance-sheet-compatible asset, facilitating comparison with other asset classes in the bank's portfolio and supporting the TNFD LEAP Assess phase for nature-related financial risk quantification.

6. Summary Mapping Table

The following table synthesises the mapping from SEEA EA accounts to NbS project-level application, data sources, and rating methodology connections.

7. Implications for Banking Product Design

The project-level application of SEEA EA accounts has four practical implications for the NbS Impact Term Deposit proposed in this report:

1. Data standardisation enables portfolio aggregation. Because all NbS projects in the ring-fenced deposit pool are assessed using the same SEEA EA account structure, the bank can aggregate extent, condition, service delivery, and asset value data across the portfolio. This enables portfolio-level reporting on total hectares under management, weighted average condition index, aggregate ecosystem service delivery, and total ecosystem asset value --- metrics that are directly transferable to TNFD and ISSB disclosures.

2. The cost of SEEA EA-compatible data collection is manageable at project scale. While national-level SEEA EA accounting requires comprehensive coverage of all ecosystem types across the national territory, project-level accounting requires data collection only within the project boundary and at a limited number of reference sites. The data requirements specified in this appendix --- satellite imagery, periodic field surveys, community monitoring, and financial records --- are already standard components of well-designed NbS project monitoring plans. The incremental cost of structuring this data according to SEEA EA accounts is primarily an analytical and reporting investment, not a new data collection burden.

3. SEEA EA accounts align with emerging regulatory requirements. Both Australia and Singapore are developing national-level ecosystem accounting capacity. Australia's Bureau of Statistics has published experimental ecosystem accounts, and Indonesia's statistical office has conducted SEEA EA pilots with UN Environment Programme technical assistance [3][4]. As these national programmes mature, NbS project data structured according to SEEA EA accounts can feed directly into national statistics, creating a positive feedback loop where project-level monitoring contributes to national environmental reporting and national-level data infrastructure reduces the cost of project-level assessment.

4. The monetary asset account bridges ecology and finance. By expressing ecosystem value in NPV terms, the Monetary Ecosystem Asset Account translates ecological performance into a metric that credit analysts, loan committee members, and portfolio managers can intuitively interpret. A mangrove project with an ecosystem asset value of US$22.4 million and a benefit-cost ratio of 2.6:1 can be compared --- at the level of economic logic, if not risk profile --- with other infrastructure and natural resource investments on the bank's balance sheet. This bridging function is essential for mainstreaming NbS within banking workflows that are built around financial return metrics.

References

[1] United Nations et al., System of Environmental-Economic Accounting --- Ecosystem Accounting (SEEA EA), White Cover Publication (New York: United Nations, 2021).

[2] United Nations et al., System of Environmental-Economic Accounting --- Ecosystem Accounting: Technical Recommendations, Revision 1 (New York: United Nations, 2022).

[3] Australian Bureau of Statistics, "Experimental Ecosystem Accounts," Cat. No. 4655.0 (Canberra: ABS, 2024).

[4] UN Environment Programme, "Indonesia Ecosystem Extent Accounts: Kalimantan and Sumatra Pilot," SEEA Technical Assistance Programme (Nairobi: UNEP, 2023).

[5] European Commission and European Environment Agency, "EU Ecosystem Accounting: SEEA EA Pilot Results," (Luxembourg: Publications Office of the European Union, 2024).

[6] Office for National Statistics, "UK Natural Capital Accounts," (London: ONS, 2023).

[7] Menendez, P., Losada, I.J., Torres-Ortega, S., et al. (2020). "The global flood protection benefits of mangroves." Scientific Reports, 10, 4404.

[8] Barbier, E.B., Hacker, S.D., Kennedy, C., et al. (2011). "The value of estuarine and coastal ecosystem services." Ecological Monographs, 81(2), 169--193.

[9] Asian Development Bank, Guidelines for the Economic Analysis of Projects (Manila: ADB, 2017). Recommends a 5% real social discount rate for developing Asian economies.