NYSE withdraws Biden-backed rule that would stymie development on millions of acres
Facing growing public resistance and the near certainty of a resounding defeat in the courts, the New York Stock Exchange (NYSE) Jan. 17 withdrew a proposed rule that would have created a new asset class — known as “Natural Asset Companies” (NACs) — designed not to make money for investors, but to serve as an instrument for the imposition of illegal and unconstitutional environmental policy on millions of acres of private and public lands across the United States.
The NYSE’s stunning retreat was announced without comment by the Securities and Exchange Commission (SEC), which was tasked with either approving or disapproving the creation of NACs.
Under the proposed rule, the NYSE was to add to its Listed Company Manual the listing of common equity securities of NACs. According to the proposed rule, this would be “a corporation whose primary purpose would be to actively manage, maintain, restore (as applicable), and grow the values of natural assets and their production of ecosystem services.” The NYSE’s proposed rule characterized “the distinct purpose of a NAC” as “protect[ing] and grow[ing] the natural assets under its management.” The proposed rule specifically defined NACs as “[c]orporations that hold the rights to the ecological performance of a defined area and have the authority to manage the area for conservation, restoration, or sustainable management.”
An Idea Rooted in Cronyism
NACs, as a concept, owe their existence to Intrinsic Exchange Group Inc (IEG). According to a September 2021 press release by the Rockefeller Foundation, “IEG was founded in 2017 by entrepreneur and environmentalist Douglas Eger. IEG received critical funding from IDB Lab, Inter-American Development Bank, The Rockefeller Foundation, Aberdare Ventures, and Intrinsic Entertainment Ideas.” The Rockefeller Foundation alone donated $750,000 to IEG in 2019 and $1 million to IEG in 2021, according to public comments submitted Jan. 9 to the SEC by 25 state attorneys general, led by Sean D. Reyes of Utah and Kris W. Kobach of Kansas.
The Rockefeller Foundation press release indicates that NACs are a joint project of the NYSE and IEG.
“The new asset class on the NYSE will create a virtuous cycle of investment with an innovation mechanism to finance sustainable development for communities, companies, and countries. … Together, IEG and NYSE will enable investors to access nature’s store of wealth and transform our industrial economy into one that is more equitable.” (emphasis added)
The Rockefeller Foundation goes on to quote the NYSE’s then-president, Stacey Cunningham, as follows:
“With the introduction of Natural Asset Companies, the NYSE will provide investors with an innovative mechanism to financially support the sustainability initiatives they deem critical to our future. Our partnership with the Intrinsic Exchange Group is another example of the NYSE tapping into our community to drive meaningful progress on ESG [environmental, social, and governance] issues with a solutions-based approach.” (emphasis added)
In addition to the open acknowledgment of a cozy relationship between the NYSE and other entities supporting the creation of NACs, key terms or phrases like “community,” “communities,” “equitable,” “our future,” “virtuous,” “sustainable,” “sustainability,” “sustainable development,” and “transform” are left conspicuously undefined in both the Rockefeller Foundation press release and in the proposed rule. Furthermore, the release admits that “the value created by NACs is not fully captured by traditional economic metrics.” This is another way of saying that NACs will not and cannot make a profit. NACs will invest in “nature”, where the only value created is the purported protection of nature.
In other words, NACs would not be traditional investment vehicles into which everyday Americans could put their money with a reasonable expectation of receiving a good return. Instead, they would be state-sanctioned instruments of environmental policy as favored by powerful elites ensconced in wealthy foundations, the NYSE, corporate boardrooms, and federal regulatory agencies.
Violating the Law
Nowhere is this more obvious than in the role NACs would play in serving as a funding mechanism for the Bureau of Land Management’s (BLM) recent proposed rule, “Conservation and Landscape Health,” which authorizes BLM to grant “conservation leases” on public lands. BLM assures the public that such leases would be “for the purpose of ensuring ecosystem resilience through protecting, managing, or restoring natural environments, cultural or historic resources, and ecological communities, including species and their habitats.” The proposed BLM rule provides that ”once the BLM has issued a conservation lease, the BLM shall not authorize any other use of the leased lands that are inconsistent with the authorized conservation use.” (emphasis added)
In short, the BLM rule is an effort to circumvent federal laws governing how public lands are to be managed, not least the 1976 Federal Land Policy and Management Act (FLMPA). FLPMA mandates that BLM manage public lands “on the basis of multiple use and sustained yield.” This means that BLM must provide for a “combination of balanced and diverse uses,” of which the “principle or major uses” include “and are limited to, domestic livestock grazing, fish and wildlife development and utilization, mineral exploration and development, rights-of-way, outdoor recreation, and timber production.” Nothing in FLPMA authorizes the granting of “conservation leases,” and the BLM rule’s restrictions on productive economic uses of lands under such leases put it at odds with congressional intent as clearly laid out in FLPMA.
By violating the clear language of FLPMA, the proposed BLM rule is illegal and destined to be overturned by the courts. Yet, its provision creating “conservation leases” is inextricably linked to the NYSE NACs rule submitted to the SEC. Such leases will not provide financial returns to the leaseholders. On the contrary, they are specifically designed to lock up lands by prohibiting any significant economic activity on them. So, which entities would sink money into these unprofitable leases?
The answer in NACs. Like the BLM’s conservation leases, the NYSE’s NACs are not designed to make money. As the 25 state attorneys general noted in their public comments submitted to the SEC:
“The BLM rule authorizes BLM to issue leases that limit public lands to no use or to extremely limited uses. The NYSE’s proposed rule, in turn, provides the mechanism by which companies can obtain the funding necessary to pay for those money-loosing leases. In this way, the proposed [NYSE] rule is part of an interlocking scheme designed to facilitate another agency’s violation of the law – namely, BLM’s issuance of illegal conservation leases. Facilitating another agency’s violations is a textbook example of ultra vires agency action ‘not in accordance with law.’”
Given the shaky legal ground on which both the NYSE NACs rule and the BLM conservation-lease rule stand, the powers that be at the NYSE decided to cut their losses and withdraw their proposal. The economic and social harm to everyday Americans by the scheme’s plan to lock up so much of the nation’s natural resources in perpetuity is incalculable. And, as noted in The Washington Times (Jan. 17) by Carla Sands, vice chair of the Center for Energy & Environment at the America First Policy Institute, the grandiose undertaking “would outsource the stewardship of precious American resources, including public lands, to companies like BlackRock and even foreign investors in places like Russia China.”
Impact on “30 X 30″
The demise of NACs also represents a stinging setback to the Biden administration’s plan to “protect” (meaning to remove from economic use) “at least” 30 percent of the nation’s land and water by 2030. One of the ways of reaching the “30 X 30 Plan’s” goal was to use NACs in combination with the BLM’s conservation leases to take as much land as possible out of productive use. The White House’s landgrabbers will now have to look elsewhere.
CFACT was honored to join the American Stewards of Liberty, the Competitive Enterprise Institute, the state attorneys general, and many other grassroots groups in exposing and ultimately bringing down this patently illegal scheme by elites to deny ordinary Americans access to their land’s bountiful resources.
Once again, David took out Goliath.
From cfact.org