In a significant development, a coalition of 22 Republican state attorneys general has expressed their opposition to a proposal by the Securities and Exchange Commission (SEC) that would pave the way for the creation of natural asset companies (NACs). Led by Utah Attorney General Sean Reyes and Kansas Attorney General Kris Kobach, these officials have raised concerns about the legality and potential threats posed by NACs, arguing that they may subordinate the interests of millions of Americans to the aims of environmental activists and United Nations policies.
Under the proposed rule, the SEC would allow NACs to be listed on the New York Stock Exchange (NYSE) for the first time. NACs are a new type of company that aims to protect, restore, and grow natural assets to foster healthy ecosystems. The Intrinsic Exchange Group (IEG), in collaboration with the NYSE, has developed a corporate taxonomy for NACs. If the rule is finalized, NACs would be able to be publicly traded.
The coalition of attorneys general argues that the SEC and the NYSE are attempting to implement a radical environmental agenda outside of the legislative process. They believe that this proposal, if enacted, would have far-reaching consequences for consumers and various sectors of the economy. Will Hild, the executive director of watchdog group Consumers’ Research, concurs with this view, stating that the proposed rule is part of a larger fraudulent scheme that assesses value without considering the harm it may cause.
The attorneys general from Alabama, Alaska, Arkansas, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wyoming have all joined forces with Utah and Kansas in opposing the SEC’s proposal. Their comment letter comes shortly after the SEC agreed to delay its rulemaking to allow for a more comprehensive public comment process.
The NYSE argues that NACs capture the intrinsic and productive value of nature and provide a store of value based on vital assets that underpin the entire economy. These assets include forests, wetlands, coral reefs, and working lands such as farms. However, Republicans and industry groups have expressed concerns that this proposal could lead to the locking up of natural resources, such as fossil fuels or minerals, which could harm local communities dependent on those activities.
The attorneys general highlight that the proposed rule would enable private entities to lock up public lands indefinitely, depriving access for recreational purposes and important economic activities like agriculture, grazing, mining, logging, and fossil fuel extraction. They argue that this is not in the public interest and could have negative implications for America’s national security, as it may allow foreign actors to obtain a financial stake in American public lands.
Furthermore, the coalition suggests that the SEC proposal aligns with a Bureau of Land Management proposal that would enable environmental organizations opposed to fossil fuel drilling and mining projects to lease public land for conservation purposes, effectively blocking resource development.
As this debate continues, it remains to be seen how the SEC will address the concerns raised by these Republican state attorneys general. The opposition to the proposed rule reflects a broader divide between Republicans and Democrats on environmental policies, with Republicans emphasizing the potential negative impacts on consumers and the economy, while Democrats prioritize environmental conservation and sustainability.
