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September 2022



Developments in US Natural Capital Accounting and Finance:

US Government's Draft NCA Plan is Released and Natural Asset Companies to be Considered by the SEC as a New Asset Class

There has been recent progress in the USA on the development of Natural Capital Accounting, through the release of the US Government’s draft national strategy to develop statistics for environmental economic decisions, and on a novel proposition to finance conservation projects through the development of Natural Asset Companies by the NYSE and the Intrinsic Exchange Group (IEG).

Draft natural capital accounting plan

The draft natural capital accounting plan, which is open for comment until October 21st, has been built on the framework developed through the UN System of Environmental-Economic Accounting (SEEA), which is being implemented by 90 countries but not by the US.

The plans outline three classes of income that the US natural capital accounting system should address:

  1. The direct contribution of natural capital to income (such as pollinator populations),

  2. Accounting for expenditures based on Net Present Value (NPV) rather than cost of provision,

  3. and Individual and household production, such as the value of outdoor leisure activities.

Natural Asset Companies

The concept of 'natural asset companies' (NACs) will be submitted for consideration to the US Securities Exchange Committee (SEC), which could turn conservation areas into publicly traded companies.

Proposed by the New York Stock Exchange and the Intrinsic Exchange Group (IEG), NACs are a corporate structure that enable natural assets to be publicly traded. Douglas Eger, CEO at IEG, hopes the first NACs could be realised as soon as early 2023. IEG plans to submit listing rules to the SEC this month.

The value of NACs relies upon an IEG accounting framework, the exact details of which are unclear. The framework values traditional cash-based services, such as tourism revenue, as well as ecosystem services.

To form an NAC, first the value of the natural asset is quantified through IEG’s framework, which would then be used in the creation of a Natural Asset Company that held the rights to the asset’s productivity (not to the asset itself). This company would then be listed on the stock exchange via IPO, thereby associating financial capital with the natural asset.

This method would rely on both initial and future investors accepting the valuations assigned to the NAC. It remains to be seen whether NACs will sufficiently attract investment without compromising the interests of other stakeholders and land owners, or the value or condition of the natural assets themselves.


BIOECON Conference on Biodiversity, Finance, and Economy takes place in Exeter

Environmental economists from around the world gathered in Exeter this week for the BIOECON Conference on Biodiversity, Finance, and Economy. Along with a hike in Dartmoor and visit local beaver populations, the conference featured keynotes from Eyal Frank on the role of quazi-experimental evidence in justifying biodiversity financing and Rachael Garnett on the effectiveness of supply-chain efforts to conserve forest and biodiversity. Panels focused on measuring biodiversity for policy purposes and natural capital and ecosystem services solutions in finance, and parallel sessions ranged from environmental market design to blue biodiversity. The full programme can be viewed here.

The conference also saw a call for submissions to Ecological Economics, guidance for which can be viewed here. We also encourage you to submit your paper to present at envecon 2023, which will take place in March 2023. The deadline for submissions is 30th November 2021.


IPBES Values Assessment Overview - UKNEE Webinar with IPBES Co-Chair Prof. Mike Christie

Next week will see our highly anticipated webinar with IPBES Co-Chair Professor Mike Christie take place, where will take us through an overview of the IPBES Values Assessment.

If you haven't already, you can Click here to register.

In the UKNEE webinar, Mike will provide an overview of the Values Assessment and its key findings. In doing so, he will highlight how the Values Assessment extends beyond the core focus of TEEB-style assessments and will demonstrate how accounting for a wider range of nature’s values can improve decision-making.

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