The original proposal for controversial Natural Asset Companies (NACs) on the New York Stock Exchange may have hit a dead end, but that doesn’t mean the idea has been scrapped altogether – and it’s a worrying issue that isn’t getting a lot of attention in the mainstream media.
In October, the Securities and Exchange Commission filed a proposed rule to create NACs and permit them to “hold the right to ecological performance” of private and public lands. This was followed by a 21-day period for comments – half the number that is typically set as a mandatory minimum.
With NACs, major corporations like BlackRock and big investors like Bill Gates – and perhaps even the Chinese government – could purchase the ecosystem rights to NAC-controlled properties, including their air, water, land and natural processes. The NAC itself will have what is described as “management authority” over the land.
Numerous sites would be eligible for NACs, including national wildlife refuges, national parks, conservation areas on federal and private lands, endangered species' critical habitats and wilderness areas. In other words, should something like this proposal eventually pass, U.S. conserved lands could fall under the ownership of some of the world's richest people, who could make decisions about their management.
Not surprisingly, the idea was met with significant opposition, with nearly two dozen state financial officers joining forces to get the proposed rule withdrawn. However, concerns remain that this could still come to fruition in some form and companies could buy up land, even without permission from the owner in some cases, as long as they can prove that acquiring the land will be for the benefit of conservation and has ecological value.
Utah Treasurer Marlo Oaks said that the proposal threatens rural economies because it enables land to be permanently removed from productive use to solve “climate change.”
“Under the proposal, private interests, including foreign-controlled sovereign wealth funds, could use their capital to purchase or manage farmland, national and state parks, and other mineral-rich areas and stop essential economic activities like farming, grazing and energy extraction. Recreating on Utah’s incredible natural lands could also face significant curtailment,” he cautioned.
NACs could still become a reality in some form
And even though the original proposal has not moved forward yet, Oaks is not convinced it is dead.
“The agenda is still alive. After spending 2 1?2 months researching and engaging in national conversations with experts to fight this, I have a heightened awareness of the Biden administration’s efforts to use land to address various policy issues,” he said, adding that the federal approach would entail forming new conservation leases and natural capital accounts based on valuing ecological services such as photosynthesis and pollination.
According to the New York Times, the NYSE’s withdrawal of the proposal to list natural asset companies for public trading is not the end of the road for the concept. In fact, their proponents are reportedly hard at work creating prototypes in private markets to push forward with their agenda.
Journalist Elizabeth Nickson pointed out that there have been numerous attempts by businesses over the years to trade natural assets, starting with Goldman Sachs’ 2005 carbon exchange that never really went anywhere, while their Climate Exchange-Traded Fund is currently facing delisting.
She points out that when land is not maintained and cared for by those who live there and use it, it cannot thrive.
“Natural Asset Companies are an attempt to grab hard assets to make up for an inevitable collapse. But taking more land out of production makes it certain that collapse moves ever closer,” she noted.
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