Today, House Committee on Natural Resources Chairman Bruce Westerman (R-Ark.) and Subcommittee on Oversight and Investigations Chairman Paul Gosar (R-Ariz.) led a letter to U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler and Director Haoxiang Zhu, seeking information on a proposed rule change to permit the listing of Natural Asset Companies (NACs) on the New York Stock Exchange (NYSE). In part, the members wrote:

"The Committee is deeply concerned with the potential impact NACs may have on the management of federal lands, effective conservation of wildlife habitat, and responsible development of natural resources. Most notably, the proposed rule would allow private investment interests to control and manage national parks and other publicly owned lands—an unprecedented power-grab and usurpation of federal authority. 

"This possibility is alarming, but, when coupled with the proposal’s arbitrary designations and ill-defined terms, it may prove calamitous to the statutory multiple-use mandates of federal lands  and responsible development of America’s natural resources. For example, the proposal designates 'unsustainable activities' as activities that cause any 'material adverse impact,' without defining what classifies as a 'material adverse impact.' Thus, this critical determination is seemingly outsourced to IEG—a private company with its own interests and shareholders to answer to. IEG’s Reporting Framework also does not define 'material adverse impact,' effectively deferring to an individual assessor’s determination. Hence, approved activity on federal land controlled by NACs will be determined by the whims of eco-activists rather than government scientists or Congress, via statute. Furthermore, it is possible that in defining 'material adverse impact,' IEG could create conditions that result in offshoring resource production to countries with undesirable labor, environmental, and human rights records—countries that are not held accountable to U.S. or IEG standards.

"Additionally, as part of the Committee’s ongoing oversight of foreign interests that attempt to influence America’s environmental, natural resource, and energy policies, the Committee is concerned with allowing foreign investment into America’s most precious assets. For example, allowing foreign interests to fund companies that will control public land and explicitly prohibit domestic mineral production is a surefire way to increase our nation’s critical mineral dependence while weakening America’s economic competitiveness, our national security, and that of our allies. This is unacceptable."

Background

On October 4, 2023, the SEC issued notice of a proposed rule change to allow the NYSE to list NACs, a new type of public company that would hold rights over prescribed areas such as national parks, federal lands, and private land. However, unlike other companies that are created to provide services or produce items of value, a NAC is "a corporation whose primary purpose is to actively manage, maintain, restore (as applicable), and grow the value of natural assets and their production of ecosystem services."

In short, NACs would obtain rights to U.S. land and could then prevent that land from being used for the production of natural resources, including fossil fuel development, mining, most logging and large-scale farming, all of which are specifically prohibited by NACs under the current proposal. Hence, NACs would allow shareholders, including foreign interests, to buy shares of companies whose express purpose is to lock up land and prevent productive natural resource development, particularly on America’s national parks and public lands.

The concept of NACs was developed by Intrinsic Exchange Group Inc. (IEG), a private company incorporated in Delaware. The NYSE has acquired a minority stake in IEG and has a seat on IEG’s board of directors. Other investors in IEG include the Inter-American Development Bank, the Rockefeller Foundation and Roger Sant, the former chair of the World Wildlife Fund.