NACs hold rights to ecosystem services produced by natural or human-controlled lands and profit from trading the ecosystem services they provide. This incentivises them to maximise ecological performance as their primary purpose. The companies, conceived and defined by the NYSE in conjunction with dedicated US firm Intrinsic Exchange Group (IEG), will be listed and traded within their own class on the NYSE.
The new asset class, says IEG, will enable "the conversion of natural assets into financial capital".
"We believe that investment in nature via IEG can create financial value for natural asset owners and investors, while providing environmental and social benefits at scale and powering a transition to a truly sustainable, circular economy," states IEG on its website.
"Our vision is to bring to market hundreds of Natural Asset Companies representing several trillion dollars’ worth of natural assets."
IEG says it is advising a number of private landowners, public companies and countries on the potential of NACs, and is working with the government of Costa Rica on using NACs as a foundation for preserving the country’s natural assets.
IEG was founded with support from investors including the Inter-American Development Bank (IADB) and the Rockefeller Foundation. The NYSE has taken a minority stake in the company and will license its accounting framework to support the development of the new asset class. IEG anticipates that the new asset class will tap into opportunities from a global ecosystem services market worth an estimated $125tn annually.