The Biden administration abruptly rescinded a proposal that would have opened public lands to private ownership, a policy that received opposition from federal and state lawmakers over potential national security concerns.
The Securities and Exchange Commission’s (SEC) Division of Trading and Markets said in a filing Wednesday that it had withdrawn the proposal which would have allowed a new type of public company, so-called Natural Asset Companies (NACs), to be traded on the New York Stock Exchange (NYSE).
NACs are a type of company that is chartered to “protect, restore and grow the natural assets,” according to the Intrinsic Exchange Group, a non-profit which collaborated with the NYSE to develop the new corporate taxonomy. The Rockefeller Foundation, a left-wing non-profit and an early supporter of Intrinsic Exchange Group’s efforts, said the proposal would help combat climate change.
“Of all the objectionable and extreme policies in the ESG menagerie, NACs are among the most egregious and least defensible legally,” Utah Attorney General Sean Reyes previously told Fox News Digital. “Not only do NACs suffer the same deficiencies as other ESG investments, but they represent a host of additional dangers to the American public.”
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Gary Gensler, chairman of the Securities and Exchange Commission, speaks during a House Appropriations Subcommittee hearing on March 29, 2023. (Al Drago/Bloomberg via Getty Images)
“While masquerading as a novel tool for the public good, NACs are a brutish vehicle to accomplish an activist political agenda,” the attorney general added. “They deprive public use of land in multiple ways that will further jeopardize US energy independence and grid stability while illegally opening management, use and ownership of these lands to private parties, including hostile countries or entities.”
Earlier this month, Reyes and Kansas Attorney General Kris Kobach led a coalition of 25 state attorneys general in penning a comment letter opposing the SEC’s proposal. They argued NACs may pose a threat to national security and subordinate the interests of millions of Americans “to the aims of environmental activists as well as to United Nations policies and mandates.”
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That comment letter came less than a month after the SEC agreed to delay its rulemaking on the issue and allow stakeholders more time to weigh in on the proposal. The delay was requested by Republican state financial officers from 22 states who requested a “reasonable public comment process,” instead of a rushed process.
And last week House Republicans, led by Natural Resources Committee Chairman Bruce Westerman, R-Ark., opened an investigation into the SEC’s rulemaking process related to NACs.
Utah Attorney General Sean Reyes said NACs “rely on unproven models focused not on returns and value for investors but rather restrictions of legal and productive use of natural resources, with dollars deployed in amorphous and undefined categories such as ‘natural assets’ and ‘ecosystem services.'” ( Drew Angerer/Getty Images)
“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,” the Republicans wrote to SEC Chairman Gary Gensler and Haoxiang Zhu, the director of the SEC’s Division of Trading and Markets.
“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,” they continued. “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.”
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Republicans and experts have further warned that activity on federal lands controlled by NACs may be “determined by the whims of eco-activists” rather than Congress or government scientists. And they said NACs could lead to the offshoring of energy production to countries with poor human rights and environmental records while opening the door to foreign ownership of public property.
However, environmentalists have lobbied for the federal government to open lands up for conservation purposes, a move the Bureau of Land Management is actively pursuing and which would align with the SEC’s NAC proposal.
According to NYSE — which argues that NACs “capture the intrinsic and productive value of nature and provide a store of value based on the vital assets that underpin our entire economy and make life on earth possible” — natural assets that could be grouped into a NAC include forests, wetlands and coral reefs, as well as working lands such as farms.