GOP AGs denounce trading ‘natural asset companies’ on stock exchange

By Jennifer Yachnin | 01/11/2024 04:23 PM EST

Republican state attorneys general have accused the Biden administration of being part of an “interlocking scheme” to constrain use of public lands.

Photo collage of Black Rock Desert Wilderness with an image of stock market ticker

POLITICO illustration/Photos by iStock, Bob Wick/BLM

This story was updated Jan. 12.

Twenty-five states are pushing back against allowing “natural asset companies” to trade on the New York Stock Exchange, with a group of Republican attorneys general accusing the Biden administration of scheming with Wall Street investors to enact limits on how public lands can be used.

In a Tuesday letter to the Securities and Exchange Commission, half of the nation’s state attorneys general urged the oversight agency to reject a proposed investment known as “natural asset companies.”


The proposal currently before the SEC would allow the stock exchange to list companies with missions to improve ecosystems through management, maintenance or restoration of public or privately owned lands. The companies would then evaluate the health of the lands and put a dollar value on the resulting benefits, like clean air or wildlife habitat.

But opponents, including conservative lawmakers and property rights advocates, have asserted the proposal would also boost Biden administration plans to conserve more public lands — and put them out of the hands of extractive industry and ranchers.

In a 16-page letter, led by Utah Attorney General Sean Reyes (R) and Kansas Attorney General Kris Kobach (R), the attorneys general pointed to the pending public lands rule under consideration by the Bureau of Land Management that would put conservation on par with those uses, including offering 10-year leases to restore acreage.

“The proposed rule provides a mechanism for companies whose purpose is not to make money, but instead to lock up land to prohibit productive economic uses thereof, to find investors and capital so they can obtain conservation leases and other ‘ecological performance rights,’” the letter states.

The top attorneys from Alabama, Alaska, Arkansas, Florida, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming also signed the missive. All of the officials are Republicans.

“The proposed 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,’” the letter continues.

But an Interior spokesperson dismissed any connection between the Biden administration’s conservation efforts and Wall Street investments.

“There is no relationship or connection between the New York Stock Exchange’s proposal to adopt a new standard for the listing of natural asset companies and the Bureau of Land Management’s efforts to protect our lands, waters and wildlife habitats,” the spokesperson said. “The BLM is also in no way involved in the Securities and Exchange Commission’s review of this proposal.”

Peter Kadushin, a spokesperson for financial services firm Intrinsic Exchange Group, which launched the idea for natural asset companies two years ago, similarly dismissed allegations that the firm had collaborated with the Biden administration on its proposal.

“NACs were developed exclusively by IEG as a free market solution. IEG is an independent company that has not worked with the Biden administration in developing NACs,” Kadushin said. “They are voluntary tools that cannot be imposed on any landowner. Whoever the landholder is, public or private, has authority of the land and decides what happens on the land.”

Aaron Weiss, deputy director of the Center for Western Priorities, also pushed back against the allegations laid out by the Republican attorneys general, suggesting critics are merely attempting to protect the industries that rely on using those same public lands.

“If your business model is based entirely on extracting value from land, this is a fundamental threat to that thinking,” Weiss said.

He noted that the prospect of Wall Street investors funding analysis of the health of landscapes could also present a concern to some users.

“One of the things that is core to the SEC proposal is that natural asset companies have to measure the health of the land that they own or manage,” Weiss said. “And that gets to one of the biggest failings on public lands right now, which is BLM does not have the resources to measure the health of their public lands.”

The House Natural Resources Committee’s Republican members also raised concerns over the proposal Thursday, issuing a letter to top SEC officials seeking information about the development of the proposal.

That request seeks communications among the SEC, NYSE and IEG.

A spokesperson with the New York Stock Exchange declined to comment.

The panel is also asking for the details of any discussions between the SEC and the White House Council on Environmental Quality, along with any nongovernmental organizations involved in the proposal’s development.

“The Committee is deeply concerned with the potential impact [natural asset companies] may have on the management of federal lands, effective conservation of wildlife habitat, and responsible development of natural resources,” the letter states.