The New York Stock Exchange has dropped a proposal to create a new class of publicly traded companies that invest in the value of nature, called Natural Asset Companies, following a barrage of complaints about the idea from conservative lawmakers and activists.
"After reviewing feedback from regulators, market participants and others, we have withdrawn our proposed rule filing to enable the listing of Natural Asset Companies," an NYSE spokesperson said in an email statement to Newsweek.
The NYSE had sought permission from the Securities and Exchange Commission for a change in the exchange's rules to allow for the creation of Natural Asset Companies. The SEC confirmed in a release Wednesday that the proposal was being withdrawn.
The company Intrinsic Exchange Group, IEG, developed the idea for Natural Asset Companies as a way to enable investment in the valuable services that nature provides.
Environmental economists estimate that the services ecosystems provide, such as clean water, pollination of crops, storage of carbon dioxide and many other natural products, contribute more than $100 trillion annually to the global economy. IEG Chairman and CEO Douglas Eger said the company developed an accounting framework to measure that ecological performance and convert the value of nature into financial capital.
"It's our way to have a market-based methodology to include the value of nature in the capital markets so that we can get investment across all sectors," Eger told Newsweek.
The idea got early support from the Rockefeller Foundation, which provided grants to IEG to further develop the Natural Asset Companies concept.
"The world urgently needs more innovative solutions and financing mechanisms to protect vulnerable ecosystems and communities," the foundation said in an email statement to Newsweek.
However, Natural Asset Companies met fierce opposition from several conservative lawmakers and activist groups once the NYSE filed its request with the SEC. Republican attorneys general from 25 states sent a letter of opposition to the SEC claiming that the proposed asset class "provides a mechanism for companies whose purpose is not to make money, but instead to lock up land to prohibit productive economic uses."
A group of 15 Republican House members signed a letter authored by Arkansas Republican Representative Bruce Westerman, who chairs the House Committee on Natural Resources, urging the SEC to reject the proposal, calling it "an unprecedented power grab."
Wyoming Senator John Barrasso, the ranking Republican member on the Senate's Energy and Natural Resources Committee, celebrated Wednesday's news that the NYSE had withdrawn the idea.
"The New York Stock Exchange's overreaching proposal would have surrendered America's public lands to the highest bidder," Barrasso said in a statement.
IEG's Eger said most of the criticism was based on misinformation about the Natural Asset Companies, or NACs.
"I think there were the misconceptions that NACs would lock away resources or force government controls onto private lands, and none of that is accurate," he said, adding that few of the opponents bothered to contact IEG for any clarification.
"When you start with misinformation, those conspiracies can grow and we got caught up in it," he said.
Eger said he is disappointed that the NYSE withdrew the proposal but remains committed to bringing Natural Asset Companies to investors.
"Everyone should have the opportunity to invest in the most important asset we have and that's the natural infrastructure that makes life on Earth possible," he said.
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