Natural Asset Companies are an abomination in the process of being considered for listing as public companies on the New York Stock Exchange, by the US Securities and Exchange Commission. The evils of this new type of entity cannot be overstated. We reproduce by permission Carol Roth’s letter to the SEC explaining what these types of entities are and why they should not be approved to exist.
My letter sent to the SEC against NACs:
To: rule-comments@sec.gov
Subject: File No. SR-NYSE-2023-09 Asking the SEC to NOT ALLOW NACs
To all involved at the SEC:
I am urging the SEC to NOT allow the NYSE to list “Natural Asset Companies” or NACs, pursuant to File No. SR-NYSE-2023-09.
I am a capitalist to my core, but believing in free markets requires some ground rules, which cannot and must not be manipulated to keep the playing feel level and fair and to engender positive outcomes. The continued efforts to financialize productive natural resources to subvert the legal system, to pervert the capital markets, and to cause harmful outcomes for both investors and the US alike cannot be enabled.
I have been in and around the capital markets my entire career. I owned my own broker-dealer at one point. I have advised on many IPOs and follow-on offerings in corporate finance. I have held various financial licenses. And, with such experience, it is clear that from an investor protection perspective, NACs bastardize the capital markets for a political objective.
NACs are not only a “new type of company”, something that is highly irregular and should require much scrutiny, but also have employed their own type of accounting system. This comes directly from the creator of the “NACs”, IEG’s Chairman & CEO, who said has said, “We created a new accounting system, which we called Statements of Ecological Performance, which account for the flow of ecosystem services in financial terms.”
(Source: https://investinginregenerativeagriculture.com/2022/11/29/douglas-eger/). Even if they use GAAP accounting within NAC financial reporting, their hubris that there is some separate accounting measures to be used within the financial markets raises too many red flags to count and should be immediately disqualifying.
NACs seek to use others’ money, including that obtained via the capital markets, to buy the ability to control or “manage” productive public and private land and other natural resources. Their stated purpose in doing so is not to make a profit or to be productive, but rather to protect, conserve, restore and preserve these natural “assets”, based on whatever their own definitions of those activities are.
As you well know, there is a very clear reason that a company goes public. It is to broadly access capital to provide both funding for growth and liquidity for existing investors, providing opportunities for investors to participate in future growth for the risk they take on. Companies are supposed to have strong merits and provide a path to growth for public investors in exchange. It is a rigorous and costly process both to become public and to stay public, and it is not for every business.
These NACs are a bastardization of that purpose.
Not only could this impact our ability to generate and access energy, critical minerals, water and food, but it could also put those decisions in the hands of institutions, such as foreign governments and their sovereign wealth funds, who could invest in these NACs and have de facto control over America’s resources.
The focus on the SEC is protecting investors. NACs allow investor money, particularly those deployed through entities that they may not control, such as pension funds, for example, to be used to decommission resources and make them non-productive for political means. Americans and the SEC cannot allow that to happen.
If you have any questions on whether this is a political tool meant to subvert the legal process, read the words of IEG’s Chairman, who said, “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.” (Source: https://eenews.net/articles/invest-in-nature-might-be-possible-with-natural-asset-companies/).
The bad outcomes here will include the subjugation of the fiduciary duty to do what is in the best interest of investors. Critical natural resources will be subject to the consolidation of a handful of wealthy and powerful individuals. And, even more frightening, control of productive resources- as well as our food supply, water, energy, tourism and more- could end up in the hands of foreign nations and their sovereign wealth funds or other bad actors.
Wall Street often cultivates a bad reputation and the SEC is supposed to be a counterbalance to make sure the markets are free and fair for everyone and have the interests of all investors at heart. Do the right thing, and not that which is politically-pushed and elite power-driven; do not allow NACs to access our capital markets via NYSE listings or otherwise.
For more from Carol Roth, visit CarolRoth.com or follow here on X (formerly Twitter) @caroljsroth
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“Greenwashing Wolves”
Gosh. Something the EU missed? Surely, left to itself without human interference nature is just fine….
“EU chief von der Leyen backs proposal to reintroduce wolf hunting”
https://www.ft.com/content/7494d61c-89aa-48d4-b712-8c30e2214f33
“Ursula von der Leyen, the president of the commission, whose pony, Dolly, was killed by a wolf in Germany in 2022, said: “The comeback of wolves is good news for biodiversity in Europe. But the concentration of wolf packs in some European regions has become a real danger, especially for livestock. To manage critical wolf concentrations more actively, local authorities have been asking for more flexibility.”
https://www.theguardian.com/environment/2023/dec/20/wolf-hunting-could-return-to-western-europe-with-eu-move
As far as I can see, Natural Asset Companies are an US phenomenon. Thus far….
It’s easy to support Rewilding until your horse gets eaten by wolves.
As a child , I listened to an old man ( an actual pioneer ) tell of his experiences with wolves .
His conclusion ?
“The only good wolf is a dead wolf .”
a Rhime of an ancient mariner perhaps
I sort of got it, but the article should be more clear about what these things are. I have no doubt it ain’t good coming from the weasels behind it
Imagine a company that makes nothing, produces nothing, but controls or owns massive amounts of forests, farmland, or mineral rich regions, and by making them sit idle, through creative accounting claims they increased their capital assets by billions and are paid for that function and can continue to sell shares to capitalize on the fictional increased equity.
A Ponzi scheme, in other words…
No.
Well, a variation thereupon.
Both foreign countries, e.g. China, private individuals, e.g. Bill Gates, and charities, e.g. The Nature Conservancy can already purchase large swaths of productive land to use for current purpose or totally redefined use. So far they just can’t solicit and use investors’ money via the stock exchanges to do so.
However, allowing a Ponzi scheme (thanks atticman) to solicit ‘investors’ (i.e. useful idiots) by promising them no return on investment other than some dreamed up increase in equity, should never be permitted. It becomes nothing more than an accounting trick to allow use of OPM for someone’s own nefarious purpose.
It’s not a ponzi scheme: Per Wikipedia: In a Ponzi scheme, a con artist offers investments that promise very high returns with little or no risk to their victims. The returns are said to originate from a business or a secret idea run by the con artist. In reality, the business does not exist or the idea does not work in the way it is described. The con artist pays the high returns promised to their earlier investors by using the money obtained from later investors. Instead of engaging in a legitimate business activity, the con artist attempts to attract new investors to make the payments that were promised to earlier investors. The operator of the scheme also diverts clients’ funds for the operator’s personal use.
Correct. Just a Leftist scam dressed up to look like a free market investment. If people who feel guilty about being wealthy really want to throw their money away, that’s fine with me. The problem with bringing NACs under the aegis of the SEC is the that it would enable Leftists to utilize the money of the non-wealthy to support their activism.
There’s nothing leftist about it. First of all, it’s designed to entice people with money, more than they need. But no one is ever satisfied with X amount of money, they always want X+ more. Swindlers like Madoff don’t pull their schemes in the ghetto, it’s always among the wealthy. They were also the target of Elizabeth Holmes and her Theranos fraud, not a Ponzi scheme. Only the government is willing to devote the money and effort to extort cash from the poor and their leftist advocates. Capitalists have bigger fish to fry, each other.
e.g.Social Security
The most recent example of a big ponzi scheme was the one run by Bernie Madoff.
Thanks gc for defending the meaning of words. Language evolves but culture pressures all the words to mean whatever culture cares about at the time language is used.
Thank you, Charles.
I can see where many Left ‘libertarians’ would argue that this is all about the use of private property, hence, nothing to get bent out of shape over, which is eerily similar to their justification of on-line censorship.
What’s missing from such ‘market’ discussions, of course, is the role of government-controlled central banks, which through their monetary interventions, have vastly distorted financial markets. In the US, as elsewhere, this has favored growth in government and financial assets over growth in productive physical assets.
In effect, it seems that those who have benefited the most from past central bank distortion of the money supply, i.e., the government and its favored financial operators, are now teaming up to buy out and remove productive assets from use.
Thanks, Charles. Isn’t there a jail term just for cooking up such a conspiracy in the securities business?
… melding a non-profit ideology without any of the restrictions of the non-profit.
The Appraisal definition of ‘best’ use is going to have to be creatively redefined.
(Also, there is the future scenario of a make believe take-over and (per Mitt) taking apart the ‘business’ and selling off the pieces for a good profit.)
Local/State taxing authorities need to see this coming and work towards being able to tax the property at a higher rate … ‘property intentionally taken out of economically productive use (for the claimed benefit of regional, national, or global purposes) shall be taxed at a higher rate than property that is continued to support the local economy’.
Conservation easements that are purchased through one of these schemes, by the fed govt, need to be given no property tax waiver, and the income needs to be taxed at a very high rate.
States with no, or little, property tax need play the game and look at ‘tax credits’ for owner occupied & managed lands. Properties owned by Gates & make-believe companies need to have the rates go up.
OR, just say no to the whole concept since entities like the Nature Conservancy can waste peoples money just as, if not more, efficiently.
Sounds like Enron
They’ll use investors money to buy up swathes of US land, shut down and remove any development on that land then ‘rewild’ it; and they’ll be the ones to decide what areas to buy up. Coal mines, refineries, power plants, farms, small towns – pretty much anything and everything they can buy will be fair game.
They’re already doing it. They simply want listing on the NYSE to enable a veneer of legitimacy that adds to their profits.
And their profits are not from the facilities they close. Their profits are from alternative facilities that they persuade governments to subsidise. So the money flow looks like this: The public invests money in a profitable enterprise – a coal mine, say. The government taxes the enterprise and uses the tax raised to subsidise a NACker’s enterprise – a wind facility, say. The NACker then persuades the public to invest their remainig money in the purchase of the coal mine. [Yes, I know that the public already owns the coal mine, but this is the new NACkerland]. Having raised this money, using honest brokers to portray the proposition as highly profitable in NACkerland brownie points, the NACker then closes the coal mine. When the wind facility fails, as it must, it is not replaced, because the public now has no money, no industry, no electricity and no jobs. The public therefore cannot be taxed to subsidise a new wind facility. The NACker cannot be taxed, because they too have no existing business or income. The government therefore also has no income. All the dollars given to the NACker have been converted into brownie points and have disappeared in a puff of wind (not smoke).
The NACker ends up owning everything – which is of course their objective – except that ‘everything’ is now worth nothing- which is of course their second objective. Can the USA beat Germany in this race to the bottom? They are a long way behind in this race but I think they really can win – once the American people turn their mind to something they are unstoppable. If they can just get the NACkers onto the NYSE they will be well on their way.
it sounds very much like the US stock market craze before Black Friday when the market crashed and took the economy with it leaving the country in the Great Depression.
Custer,
Yes. Examine the rapacity of the United Nations world heritage mechanism. Geoff S
They don’t want to be clear. Keeping it mystical works better for them.
This sounds like another and quite significant step in the destructive takeover of the West. It’s kind of like BlackRock which uses our capital to control us. It’s yet another thing I need to talk about widely because no one I know will hear about it.
Wow, you got my attention. I could spend hours commenting about this topic.
“Statements of Ecological Performance, which account for the flow of ecosystem services in financial terms”
The problem is that there is no agreement on ecosystem services. The concept has been around for several decades and mostly ignored because it’s so difficult to put dollar values on those “services”.
Again, there is no way to price those assets that can be proven to be true and correct. It would be nice if there was such a way.
What I think they’re hoping for is to not actually manage “natural resources” in traditional ways which actually gave evidence of dollar values based on products and services produced and sold in the market place. I think they’re hoping to end forestry, for example- and instead, claim dollar values for the value of locking up forests “to do nothing but sequester carbon” to “save the planet”- since that’s what the climatistas in New England are calling for (they call it proforestation). And, they think by locking up forests they can claim that improves biodiversity- but that’s false. Wildlife mgt. scientists here have said for many years that for wildlife biodiversity- you need a diversity in forest structure, species, age classes, etc. Yet, the current power structure here is now saying we must lock up most of the forests- and they’ve made a point in a recent “final report on climate smart forestry” that they want to end or ignore a state law that mandates that the state wildlife agency manage the few hundred thousand acres that agency has for biodiversity – in order to focus on allowing the forests to grow- to sequester carbon, to …. you know, save the planet.
From the first link in the essay:
They can invest in forests right now- lots of private forests are available for sale. Then they can manage those forests to produce goods and services currently valued in the market place. No magic needed. But, as that quote says, some people would like to get a return- based on mystical ecosystem services.
Unfortunately, they ignorantly have concluded that, in the case of forests, that you get more ecosystem services by locking up the forests- because the only value that really matters is carbon– so much so, that it’s fine to abandon the potential profit from producing valuable wood products, hunting rights, recreation rights, etc. – just maximize the carbon.
I have tried to push the idea that we should indeed count ecosystem services- which are superior from excellent forestry- which includes structural diversity, increased biodiversity, reduced damage from invasive species and pests, improved potential for game species, better protection of watersheds, etc. Most of these values have not been accounted for during debates over forest policies but if they were- then we’d see why MORE forest land should be managed, not less. It’s even well understood that with better forestry, we’d have MORE carbon in the forests than now- since a great deal of forestry is not done well. Perhaps not as much as locking up all the forests- but that too is debatable- since, many forests are loaded with diseased and damaged trees, along with many being fire prone. These issues could be addressed with better forest mgt. These issues result in greater mortality- which results in a LOSS of carbon.
There is no simple way to assign dollar values to ecosystem services. Trying to capitalize on ecosystem services is guaranteed to fail unless OUR tax money is appropriated for this purpose- which these fools will try to argue is necessary.
What forestry haters just can’t grasp is that if we simply focus on high quality, traditional forestry- we can produce a great deal of value that we can all find believable as it’ll show up on price tags. We can increase those values with superior quality work. This will produce more ecosystem services even if we have no way to measure them. The attempt to measure them can be considered a science too far- like climate science!
So, nothing produced and sold, no income, no profits, no dividends, just lots of virtue-signalling “shareholders” who are paying for the priviledge…
More fool them!
As Elizabeth Nickson points out, this strategy is destroying rural America. Communities that were once hubs of economic activity that included small loggers, sawmills and the ancillary businesses that surrounded them have been abandoned because of land purchases by NACs that tie up natural resources for the financial advantages of phony carbon policy. If our eyes are open, we’re observing the destruction of the best part of US culture.
Then watch what happens when lumber prices continue to rise- contributing to a rapid rise in housing costs. Thanks for that link- I’ll pass that along to the greens here in Wokeachusetts.
Do you think they will ‘double dip’ by also offering them as carbon offsets?
Absolutely!
Well said Joseph Zorzin. The fact that this class of investors don’t seem to see an opportunity in the existing mechanisms you describe is very telling. I would also add that there is a significant philosophical split in carbon accounting for forests that likely also plays a role in the calculus. Do we count 100% of the carbon emissions of a tree soon after it is harvested or do we account for the carbon tied up in long-lived wood products (dimensional lumber, panels, furniture, etc.) as sequestered for an appropriate period of time? I’m sure you know which side different ideologies line up on this.
Given that with excellent forestry- just because so me trees are cut- many more are not cut and still growing. Any measuring of carbon (there should be none of course) should account for the entire forest- not just the trees cut.
Sell short!
Waiting for someone to blame the socialists and Marxists for the creation of “NCAs”. Read Elaine Dewar’s “Cloak of Green”, a little out-of-date but still quite pertinent. There’s a serious connection between Wall Street and academia in this enterprise.
“ and academia “
There’s your socialist connection, right there. !
I may start Green Wolf Coin….like Bitcoin but ….of course ….Green….and scary. Both Prof. Lindzen and Dr. William Happer have YouTube videos over the last year which are excellent and Dr. Happer mentioned that he and his family have received death threats.
Story Tip
Slowly but surely: Exposure of communities and infrastructure to subsidence on the US east coast
For what reason they mention CC ?
‘The impacts are real’: New satellite images show East Coast sinking faster than we thought
Why they thougt (headline) instead of measure and compare ?
” Why they thougt …”
These sorts of comments — various forms — are an indication of lazy sloppy wordsmithing. Often the phrase includes “previously”; how could it be otherwise?
It is sometimes said that by the time a person gets advanced degrees and garners research funds the ability to write clearly has been beaten out of them. It might help if science students took a class in writing science fiction and fantasy short stories.
As it’s about science, “as we (…) thought” sounds far away from science… – only my impression. 😀
Forests grow old the same as people and become carbon neutral or worse. I have this problem in the Adirondack Park where I am having my land logged. Rules are very strict no more than 30% of harvestable trees may be removed even though my forest is over crowded with large trees having not been logged since 1957. In addition one member of Lake George Town board is requiring a 100 buffer zone on perimeter. This is a significant hit as many large trees are there. Some of my neighbors would like these trees gone instead of jeopardizing their houses. We will just have to see how this goes during the 2 year life of the contract.
The thing that would make SEPs really profitable, rather than the niggling trickle of subsidies that they’ve gotten to date, would be the “public-private partnership” created by an international carbon-tax scheme. Oligopoly, happily speeding on its way to fascism.
We should be skeptical of the “newness” of this creative accounting system: It resembles the U.S. agricultural central planning system under FDR, the old New Deal. Subsidizing rich farmland, deliberately kept fallow, capitalizes on short-term gain from reduced expenses while transferring control (and often title) to central government planning.
It’s really really simple when you understand the GreenGasEffect – except you use Money instead of HeatEnergy
So, to kick it off ‘someone’ on the ground ‘radiates’ money and the NAC absorbs it.
The NAC then re-radiates it, 3.7 diddlysquats come back to the groundand it is absorbed and bingo: the original someone has MoreMoney (or Heat as was in the original)
This MoreMoney is then radiated by the someone, the NAC absorbs this MoreMoney and re-radiates MoreMoreMoney to be absorbed by the original someone who now has MoreMoreMoneyMoney.
And so on and on and on until the original someone has 1.5 diddlysquats of more and is utterly wasted by it all.
simple
Have I understood this correctly? An NAC seeks to raise dollars from the public in order to run an enterprise which will be accounted for in brownie points, not dollars. The NAC itself defines and determines its own brownie points, and uses a new accounting system to convert brownie points into fictional dollars which can then be used to value the enterprise in a dollar-based market. The nature of the enterprise is to buy and destroy productive assets. In other words, to make those assets unproductive.
If I have understood correctly, this is a further corruption of the free market, where market-like descriptions are used to pretend that something oppressive – like cap and trade for example – is part of a free trade system. Cap and trade is clearly not part of a free trade system, because it is capped not free – it is restriction not freedom that controls the price. This NAC thing goes one large step further into Orwell newspeak territory, by describing destruction as production, and devising an accounting system which counts every minus as a plus.
The CAGW crowd is loaded with really bad people. We need to understand that and act accordingly. Some are really really bad.
Brainwashed by the UN/IPCC and the media.
If public listing is an advantage
And new companies are barred from public listing based on ESG
Then new companies are at a disadvantage based on ESG
The London School of Economics, where numerous studied, such as EU’s Ursula van der Leyen with a fake name Rose Ladson, have this stained glass display :
The British Fabian Society, makes no secret of a wolf in sheep’s clothing.
There are the founding members, HG Wells, Shaw, et al. Notice them hammering the world to their shape!