Douglas Eger is not deterred, but he is willing to concede that he and other backers of a concept called “natural asset companies” made tactical errors in the way they described NACs in their effort to get the companies listed on the New York Stock Exchange.
NACs, says his firm, Intrinsic Exchange Group, are companies "designed to foster regenerative economic activities that will sustain resource use long into the future, such as food, feed, fibers, and forest products. NACs allow landowners to garner investment in exchange for voluntarily agreeing to operate in a way that aims to maximize ecological health, all while maintaining ownership of their land. A NAC does not prohibit use in any activities as long as it is maintaining or growing the ecological health of the land."
The NYSE last week withdrew its proposal filed with the SEC to enable the listing of NACs, but Eger says that decision won't stop IEG from moving ahead with the idea. He's long been involved in advancing a variety of concepts and businesses and produced several documentary films. Prior to forming IEG, he was chairman of Pet 360, which he sold to PetSmart in 2014.
“We're committed,” Eger told Agri-Pulse in an interview. “We're committed to the farm communities, to the farmers and ranchers that we've been speaking to over the last five or six years.
“We will come to the private markets and we'll find appropriate outlet to the public markets — domestically or internationally.”
The NYSE decision came “after reviewing feedback from regulators, market participants and others,” an exchange spokesperson said.
The proposed rule change had garnered widespread opposition from conservative lawmakers, 25 state attorneys general, individual farmers and ranchers and groups, and groups including American Agri-Women and R-CALF, among others.
Douglas Eger, Intrinsic Exchange GroupThey said the listing of NACs on the exchange would threaten control of both private and public lands, notions that Eger took pains to dispute.
However, given the controversy surrounding the proposal, “I think [the exchange] just felt that it would be better to withdraw the filing at this point,” he said.
Despite his continued commitment, Eger will likely have an uphill battle. Kip Tom, managing member of Tom Farms in Indiana and former ambassador to the United Nations Agencies for Food and Agriculture, says action is underway by congressional appropriators to prevent NACs from ever becoming reality.
He says NACs could enable other nations' sovereign wealth funds to invest in U.S. public lands.
“It moves the land ownership of our country into hands we don't want it in,” he said.
Eger expressed regret in the interview with Agri-Pulse about the way IEG went about trying to get the NYSE listing.
NYSE’s proposal said a NAC would be “prohibited from engaging directly or indirectly in unsustainable activities,” defined as “activities that cause any material adverse impact on the condition of the natural assets under its control, and that extract resources without replenishing them (including, but not limited to, traditional fossil fuel development, mining, unsustainable logging, or perpetuating industrial agriculture). The NAC will be prohibited from using its funds to finance such unsustainable activities.”
“We called out industries we didn't need to,” Eger said. “We should have stuck to what the NACs are designed to do, and that's to maintain and grow the natural capital base, to improve it. It doesn’t preclude you from growing food, harvesting timber. It doesn't preclude you from doing any of those things, but it allows you to invest in doing that in a better way” in agriculture by moving to “regenerative” practices.
Eger said he didn’t expect as much opposition to the idea from conservative forces.
“We were kind of quiet about [the proposal],” he said, adding that “hindsight’s 20/20. We would have liked to been out with a lot more people … and explain it to them.”
“Let's have the conversation,” he said, noting that last week he had dinner in Washington “with very, very conservative folks” who he said are in the “political sphere,” but not elected officials. Some of them own farmland, he said.
“And we got through most of these issues. … Most of them came away … and said, we need something like this.”
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Nevertheless, “I think we have a job ahead of us to get people to understand what this is meant to do,” he said.
Eger said “misinformation” was responsible for theories voiced by opponents that NACs would threaten activities such as grazing, forestry or conservation and could lead to foreign countries taking over management of public lands.
American Agri-Women, for example, said it was “opposed to any effort that threatens food production and prioritizes environmentalism over a basic human necessity to thrive. The proposed rule is a direct threat to farmers and ranchers across the country, as well as oil and gas production, mineral development and food production.”
AAW continued, “We cannot allow investors, including foreign interests, to have the ability to purchase or manage our national and state parks, conservation easements on private land without landowner permission, federal land or farmland.”
Eger, however, said, “You can't sell off public lands. The sovereign land stays the sovereign land.”
As for private land, Eger said a farmer or rancher would have to agree to license the ecological attributes of their land to the NAC through a contractual arrangement.
The farmer or rancher would “get the benefit of stock or cash, or both,” he said. “You get investment and we go forward. If you ever wanted to leave, you could do that. It’s not like an easement where you're locked in forever.”
“It's like a carbon credit writ large, but covering all the ecosystem services,” he said. “And for that, they can get stock in the NAC, they can get payments, they can get a premium for their product, plus the investment necessary for them to convert that farm practice.”
“We wanted something that was voluntary and free market to be able to come in and address this problem, which is the lack of value provided for natural capital,” such as soil health, he said.
“The biology of the soil is our greatest asset. And if we treat it well and we grow it, we're going to have a more resilient food supply, we'll have better flood control, drought resistance, and healthier crops, which leads to healthier food, which is great for human health,” Eger said.
“We're trying to help the farm community to get through some very difficult times,” he said.
Eger said far from taking away property rights, allowing NACs would strengthen them. “It's an additional codified property right for ecological attributes. It adds value to the land.”
Rep. Matt Rosendale, R-Mont.
Many critics of the proposal said it was tied to a separate Bureau of Land Management proposal on landscape health.
“The proposed rule plainly is intended to serve as the funding mechanism for [BLM’s] recent proposed rule, ‘Conservation and Landscape Health,’ which would authorize BLM to grant ‘conservation leases’ for public lands,” attorneys general from 25 states wrote in comments to the SEC.
Matt Rosendale, a Republican congressman from Montana, said the BLM proposal “goes hand in hand with the proposed SEC rules.”
But Eger said that the types of activities allowed on public lands are “decided at a public policy level” and that IEG isn’t even pursuing projects on public lands.
“I'm not exactly sure how you'd enter into a contract or even if it's possible in the U.S.,” he said.
He also called “not true” the claim that “the government would tell [producers] how to manage the farm via a NAC.”
NACs would allow investors to tap into the value of nature, IEG and supporters say.
“On a global basis, natural assets produce an estimated $125 trillion annually in ecosystem services, such as carbon sequestration, biodiversity, and clean water,” the Rockefeller Foundation said in 2021 when it announced it was backing the effort. “The formidable output underscores the financial potential of an asset class that is wholly based on environmental investment.”
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This story was edited to clarify Eger's comments about IEG's effort to get NACs listed on the NYSE and about the way NACs are structured.
