Natural Asset Companies and the plan to financialize the commons

November 13th, 2021

Awake Goy

“The rise of capitalist practice and morality brought with it a radical revision of how the commons are treated, and also of how they are conceived.” -Noam Chomsky

Following the COP 26 climate conference in Glasgow, Scotland, which seems at times like an exercise in public relations for the leaders of richer nations who mostly left after the first week, it’s hard not to feel cynical about the chances that real action will be taken to avoid the worst impacts of climate change in the decades ahead. While tireless activists like Greta Thunberg and the student strikers she inspired still offer some hope through their efforts, the truth is that the neoliberal economic order based on the unending accumulation of riches by the already wealthy and almost religious zeal for ‘free markets’ is in direct conflict with humanity’s ability to confront the crisis.

Thunberg made this point herself earlier this week, “Are we fighting to save ourselves and our living planet or are we fighting to maintain business as usual? Our leaders say we can have both, but the harsh truth is that is not possible.”

For an example of this, we need only look at the latest attempt by Wall Street plutocrats to create infinite revenue streams for the 1% from the work done for free until now by Mother Nature.

In mid-September, the New York Stock Exchange announced it was working with the Intrinsic Exchange Group (IEG) to create what are to be called Natural Asset Companies (NACs) that will allow investors to profit from natural ‘assets’ like clean water. Although it won’t be mentioned in the business press, which has already shown quite a bit of enthusiasm for the idea, the end of this scheme seems to be the final privatization of the commons that used to belong to all.

The groups involved in IEG are the Rockefeller Foundation, somewhat ironically created by the family that built its spectacular wealth through its practical monopoly over the fossil fuel industry in the US at the end of the 19^th and the first half of the 20^th century, Aberdare Ventures and the Inter-American Development Bank (IADB).

The involvement of the IADB should ring some alarm bells as it has acted as a kind of World Bank in miniature in Latin America and the Caribbean since 1959, forcing austerity on some of the world’s poorest nations in the name of multilateral ‘development’. Indeed, one of the most troubling things about NACs, the operations of which have yet to be fully explained, is that former colonies in the global south will probably be the first to see their natural wonders like rainforests monetized through these schemes to fill the pockets of investors in richer countries like Canada and the United States.

Using the language of marketing, the IEG vaguely but oh so positively explains the idea of NACs on their web-site, “We are pioneering a new asset class based on natural assets and the mechanism to convert them to financial capital. These assets are essential, making life on Earth possible and enjoyable. They include biological systems that provide clean air, water, foods, medicines, a stable climate, human health and societal potential.”

As Robert Hunziker more coherently broke down the concept on the web-site Counterpunch on Monday, “In simplest of terms, NACs allow for the formation of specialized corporations that hold the rights to the ecosystem services produced on a given chunk of land. The services might be sequestration of carbon or clean water or possibly rare Tibetan mountain air or maybe a lake teeming with trout in the wilderness. The possibilities are endless when auctioning off major chunks of an asset as big as the planet.”

Once these assets are identified and their ‘value’ has been assessed in a process that hasn’t yet been made public, they will be offered up to investors in Initial Public Offerings (IPOs), which is just one of the incentives the NYSE, which is itself a private entity owned by Intercontinental Exchange, has in listing these companies when they’re created.

While IEG has announced a partnership with an unnamed multinational corporation starting sometime this fall to create a NAC or NACs, it’s been reported by Reuters that the company, with the help of its partner the Inter-American Development Bank, has already begun discussions with the government of Costa Rica to form NACs there and “is also in discussions with other sovereign nations, private landowners, and public companies” to create more.

NYSE President Stacey Cunningham explained that, far from looking to fill the pockets of investors with $125 trillion produced by the natural world in a given year, the introduction of NACs is all about protecting the environment, “With the introduction of Natural Asset Companies, the NYSE plans to provide investors an innovative mechanism to financially support the sustainability initiatives they deem critical to our future.” h

Still, the use of buzzwords like ‘sustainibility’ to financialize the commons was undercut by the NYSE’s chief operating officer. who said this about the upcoming launch of NACs, “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.”

One side benefit for those who create or invest in these companies will be the ability to claim that they’re doing good for the environment, taking the concept of ‘greenwashing’ to a whole new level. Perhaps governments will even create tax incentives for these kinds of businesses, a win/win for all, except perhaps those who actually live and depend on the resources in areas now owned by unaccountable corporate entities.

Although IEG insists that the profit from NACs will come from their sustainability, what is being sold as a green solution to a problem that didn’t exist could go very wrong in a number of ways. What if the owners of an asset like a forest discover there is mineral wealth beneath it that is worth more in the short term than the money it produces through medicinal plants, water or carbon offset credits over time?

Although it seems likely that it will be the big investment and vulture capital firms who will control the market for NACs, it’s also not inconceivable that some might be wholly bought or created by billionaires like Elons Musk or Jeff Bezos. If NACs come to include ‘assets’ beyond our planet, some billionaire might realize a dream once exclusively associated with comic book villains: ownership of the moon or other planets.

It has seemed throughout the climate crisis that for every positive step forward in reducing emissions or developing green technologies the greed of big business and the uber wealthy ensures that we take six steps back. Natural Asset Companies are just another extreme example of this in action. Tragically, they also seem to foretell the end of the commons, something not even the absolute monarchs of old could do.