Jan. 12, 2024
I am writing to oppose proposed rulemaking by the Securities and Exchange Commission (SEC) which would allow the NYSE to list “Natural Asset Companies” or NACs, pursuant to SEC File No. SR-NYSE-2023-09 “Notice of Filing of Proposed Rule Change to Amend the NYSE Listed Company Manual to Adopt Listing Standards for Natural Asset Companies, Release No. 34-98665. This rulemaking would allow the financialization of productive natural resources, subvert the legal system, pervert capital markets, and cause harmful outcomes for both investors and the US alike and must not be enabled. NACs 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 some type of climate justice. Not only could this impact America’s ability to generate and access energy, critical minerals, water and food, but it could also put those decisions in the hands of institutions, including foreign governments and their sovereign wealth funds, who could invest in these NACs and gain de facto control over America’s resources. NACs allow investor money, particularly money 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. NACs subvert the private capital markets for a political objective. Douglas Eger, Chairman & CEO of Intrinsic Exchange Group and the creator of NACs, recently called NACs a “new type of company”, something that is highly irregular and should require much scrutiny. NACs propose to use a new type of accounting system. Eger 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 NACs use GAAP accounting within NAC financial reporting systems, their proposal to use 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. The intent of these NACs is clear. IEG Chairman Eger 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 a company’s 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. 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. Do not allow NACs to access our capital markets via NYSE listings or otherwise. Thank you for your consideration. FRANK MUNN JR [Redacted]