The New York Stock Exchange (NYSE) announced the launch of a new asset class, jointly developed with Intrinsic Exchange Group (IEG), for Natural Asset Companies, sustainable enterprises that hold the rights to ecosystem services produced by natural, working or hybrid lands. The new NACs will be listed and traded on the NYSE.
IEG’s founding investors include the Inter-American Development Bank and Rockefeller Foundation. The NYSE has also taken a minority stake in the company. According to IEG, NACs enable natural asset owners to convert nature’s value into financial capital, providing additional resources necessary to power a sustainable future. The asset class was developed to enable exposure to the market created by the estimated $125 trillion annual global ecosystem services opportunity, encompassing areas such as carbon sequestration, biodiversity and clean water.
Douglas Eger, CEO of IEG, said:
“This new asset class on the NYSE will create a virtuous cycle of investment in nature that will help finance sustainable development for communities, companies and countries. Together, IEG and the NYSE will enable investors to access nature’s store of wealth and transform our industrial economy into one that is more equitable.”
In order to enable investors to value the ecosystem services generated by NACs, IEG has also developed an accounting framework to measure ecological performance to complement GAAP financial statements, in consultation with former FASB Chairman Robert Herz and leading accounting firms.
The NYSE stated that it will develop and seek SEC approval for unique listing requirements tailored to NACs and incorporating IEG’s accounting methodology. IEG and the NYSE would then begin working with the first NACs to help prepare them for listing and trading as publicly held entities on the NYSE.
Stacey Cunningham, President of NYSE Group, said:
“With the introduction of Natural Asset Companies, the NYSE plans to provide investors an innovative mechanism to financially support the sustainability initiatives they deem critical to our future. Our work with Intrinsic Exchange Group is another example of the NYSE tapping into our community to drive meaningful progress on Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More issues with a solutions-based approach.”
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