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Roth: Wall Street’s new plan: Control public lands for ‘climate justice’
The New York Stock Exchange is opening a new front in the climate fight for control of America’s natural resources: natural asset companies. And the NYSE is trying to get the Security and Exchange Commission to approve and unleash them on public investors.
It isn’t easy to create a new type of company‚ particularly one that qualifies for listing on the largest stock exchange in the world. It’s quite out of the ordinary‚ in fact. The "natural asset company" designation was dreamed up by the Intrinsic Exchange Group‚ a small group that includes folks from various environmental and ecological backgrounds. The group’s own website is somewhat sketchy about its backers‚ though it lists the Rockefeller Foundation‚ the Inter-American Development Bank‚ Aberdare Ventures‚ the NYSE‚ and AES Corporation co-founder and former World Wildlife Fund chairman Roger Sant among its “investors.”
NACs aren’t seeking to manage resources to improve their earnings potential. Rather‚ they are often seeking to remove the productivity of assets in the name of “climate justice.”
The idea is to allow these NACs to use their money to buy the ability to control or “manage” productive public and private land and other natural resources. Their stated purpose is not to make a profit or to be productive but rather to protect‚ conserve‚ restore‚ and preserve these natural “assets.”
In practice‚ an NAC could offer money to the federal government (which owns about 30% of America’s land) to manage lands that produce or cultivate food‚ water‚ timber‚ or energy or even those that are used for recreation. The company could then decide whether the current activity is bad for the environment and take the land out of productive use in the name of “restoration” or “conservation.”
It’s “environmental‚ social‚ and governance” scoring on steroids.
And where would these NACs attract the capital for all this? Well‚ that’s where this issue becomes even hairier. IEG pitched the world’s largest stock market‚ the NYSE‚ which became a partner. As part of this arrangement‚ the NYSE took a “small minority interest” in IEG‚ including one seat on the organization’s board of directors. The NYSE is now petitioning the SEC‚ a government agency that exists to protect investors and maintain orderly markets‚ to allow NACs to be listed and traded publicly.
As a former investment banker‚ I can tell you exactly why a company goes public: to access capital broadly in order to provide both funding for growth and liquidity for existing investors. Companies are supposed to have strong merits and provide a path of growth for public investors in exchange. It is a rigorous and costly process both to go public and to stay public‚ and it is not for every business.
These NACs are a debasement of that purpose. They aren’t seeking to manage resources to improve their earnings potential. Rather‚ they would often be seeking to remove the productivity of assets in the name of “climate justice.”
Not only could this undermine our ability to generate and access energy‚ critical minerals‚ water‚ and even food‚ but it could also put those decisions in the hands of institutions such as foreign governments and their sovereign wealth funds‚ which could invest in these NACs and have de facto control over America’s resources.
This entire scheme stinks to high heaven and is fraught with myriad potential conflicts and bad outcomes. It also came about in a way that should raise many red flags. Along with conjuring a new company type out of thin air‚ IEG’s chairman and CEO announced last year the group had invented a new type of accounting. “We created a new accounting system‚ which we called Statements of Ecological Performance‚ which account for the flow of ecosystem services in financial terms‚” Douglas Eger told Koen van Seijen of the “Investing in Regenerative Agriculture and Food” podcast.
If making up a new accounting standard with ecology as a base doesn’t raise a red flag‚ I am not sure what will. It is also worth noting that IEG’s Ecological Performance Reporting Framework is based upon a U.N. framework‚ something that shouldn’t raise a lot of confidence.
If you were unaware of natural asset companies before now‚ you are hardly alone. Very few people know about them‚ and IEG’s work has been relatively low-profile. But several conservative lawmakers and officials at the state and federal levels have been trying to draw more attention to the issue‚ including Utah Treasurer Marlo Oakes‚ who penned an op-ed for the Wall Street Journal focusing on the possible misallocation of capital associated with NACs.
Fundamentally‚ the establishment of NACs is part of an effort by climate cultists and social engineers to exploit the financial services sector to push their anti-market‚ anti-growth agenda. IEG’s Eger has said as much. “We were looking for a private-sector approach that wasn’t dependent on policy‚ it wasn’t dependent on traditional taxes‚ regulation‚ or philanthropy to price in these assets and give investors the opportunity to invest directly in nature‚ whether that’s for climate or biodiversity‚” Eger told Politico’s E&;E News.
What can be done to stop NACs? You can call your elected representatives and state officials and make a lot of noise about this quickly‚ as the SEC is set to decide in early January. Tell them to put pressure on the SEC not to allow Release No. 34-98665; File No. SR-NYSE-2023-09. The bottom line: Do not allow the NYSE to list natural asset companies. You can also contact the SEC directly to weigh in here. Again‚ you must include File No. SR-NYSE-2023-09 in the email subject or on any paper drafts.
We really don’t want Wall Street‚ university endowments‚ or even foreign governments to control our natural resources. Let’s make sure that NACs remain merely a crazy idea and do not become a reality.
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