Local elected officials have been asked to oppose a New York Stock Exchange initiative that would create “natural asset companies.”

Warren City Council took such a step on Monday.

But what is a “natural asset company?”

“The NAC is a transformational solution whereby natural ecosystems are not simply a potential resource to extract, but an investable productive asset which provides financial capital to responsible stewards of ecological resources,” according to the New York Stock Exchange. “As a publicly traded equity, NACs will enable investors to allocate capital efficiently to meet their sustainability objectives.”

Partnering with the Intrinsic Exchange Group, the NYSE says that these companies will capture “the value of natural assets and the ecosystem services they produce.

“Natural Asset Companies (NACs) are fundamentally different than traditional companies because they are chartered to protect, restore, and grow the natural assets under their management to foster healthy ecosystems.”

The NYSE says that the move is intended to “address the large and complex challenges of climate change and the transition to a more sustainable economy.”

A December article by Politico states that the Securities and Exchange Commission is concerning the proposal.

“To qualify as an NAC, a company would need to document how it is improving the lands in its portfolio,” Politico reported. “The companies would be responsible for the ‘conservation, restoration, or sustainable management’ of those lands, such as improving wildlife habitat or ensuring clean air.”

LOCAL OPPOSITION

The Allegheny Forest Alliance has opposed the change and called on local municipalities to follow that lead.

“The AFA’s opposition is based in the threat NACs pose to private property rights, community revenues from national forest timber sales, and the collaborative process that allows local review and comment on ANF management plans and projects,” AFA Executive Director Julia McCray said in a release, “as well as the opportunity for foreign control of American land and resources through creation of NACs and purchase of their equities.”

The AFA claims that the creation of NACs would give “unprecedented control by a corporation over the land/resource they license and, potentially, other adjacent land uses, such as agricultural lands, residential neighborhoods, parks, or cities/towns.”

Per the AFA, the investment return would come from ecotourism revenue, carbon credit sales on natural lands, and commodity crop production on working lands.

COUNCIL DISCUSSION

City of Warren Mayor David Wortman said during Monday’s Warren City Council that the Warren County School District, Forest Area School District, Rep. Kathy Rapp, Sen. Scott Hutchinson and Congressman Glenn Thompson have all opposed the rule.

Asking council’s blessing for him to send a letter in opposition, Wortman claimed that this is a “mechanism by which (a company) could gain control of land assets, to include public lands, and lock them up in a natural asset company.”

He said it provides an “opportunity for foreign entities to buy in or take control” and “completely bypasses Congress.”

Those sentiments were not unanimously shared by the city council.

“This is an environmental project that is getting started,” Councilman Maurice Cashman countered. As you acquire the property, (NACs are) going to continue to operate the property under environmentally sustainable rules.

“To me, there’s sort of a fear factor here,” Cashman argued, adding that he’s not aware of any instance when the US government gave land away to private enterprise.

He said the closest example he could come up with is the Western Pennsylvania Conservancy.

“This… is almost herd mentality,” Cashman said. “I had a hard time getting my arms around this whole thing. We need to continue marching to green energy… but there’s a cost to doing that. If they’re going up on the NYSE, they’re going to have to have a return.”

Councilwoman Wendy McCain said more broadly that she didn’t “have enough information or information from opposing sides” to approve sending the letter.

Council Vice President Danielle Flasher said submitting the letter would allow the council to “speak in one voice.”

McCain disagreed.

“It seems like when we’re asking to sign something on behalf of our city, city residents should have a chance to speak, to make sure we’re speaking responsibly,” she said.

McCain was critical of how the issue was listed on the agenda.

“How would anybody have any idea what that means?” she asked. “We received something Friday and something today (on this issue). I don’t think it’s fair to send a letter from our city when city residents haven’t had a chance to weigh in on it.

“We need to stop doing things at the last minute. There’s no reason to rush through things.”

Wortman’s request to send the letter was approved in a decision with Wortman, John Barbera, Flasher and Jared Villella in support and McCain, Cashman and Phil Gilbert in opposition.