by Greg Walcher, E&E Legal Senior Policy Fellow
As appearing in the Daily Sentinel
The New York Stock Exchange (NYSE) recently announced the launch of a new “asset class,” one whose members will be referred to as “Natural Asset Companies.” The project was developed by NYSE and Intrinsic Exchange Group, which is a partnership of the Inter-American Development Bank and the Rockefeller Foundation. Uncharacteristically, NYSE itself is a part owner.
Asset classes are simply a grouping of investments that have similar characteristics and are subject to the same rules. Generally, that includes classes like stocks, bonds, cash, real estate and commodities. Financial advisors use asset classes as a tool to ensure that investors diversify their portfolios. That has been fairly routine thinking on Wall Street for decades. But this new class of Natural Asset Companies (NACs) is designed to include something completely new — “sustainable enterprises” that hold the rights to “ecosystem services” produced by natural lands. In other words, companies that own lands that naturally produce valuable assets.
The launch of the NAC asset class attracted considerable attention in the financial press, and NYSE’s Michael Blaugrund explained the excitement. “Our hope is that owning a natural asset company is going to be a way that an increasingly broad range of investors have the ability to invest in something that’s intrinsically valuable, but, up to this point, was really excluded from the financial markets.”
