FAQ

Natural asset companies are a new, innovative instrument designed to ensure that nature’s fundamental value to the global economy is reflected and captured in capital markets. NACs represent the first nature-positive investment vehicle to incorporate the total economic value of nature.

NACs are corporations that hold the rights to the value of natural assets and the ecosystem services they produce. These corporations manage a specific land area and grow the value of the natural assets under management. NACs have an equity capital structure: their value includes traditional cash flows and the value of the nature and ecosystem services under their management. Natural asset owners have an equity stake in the NAC, retain their property ownership, and have authority on how it is managed. For investors, NACs are a direct, nature-positive investment into climate, biodiversity, resiliency, and improved social outcomes.

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More than half of global GDP is dependent on nature. The clean air, clean water, healthy soil, natural infrastructure, and healthy ecosystems produced by nature are valued at an estimated $125 trillion annually. Too much of nature’s value, however, is measured indirectly, or not at all. The result: good stewardship of natural assets is not rewarded while the costs of mismanagement rise: greater flood risk, more severe wildfires, pressures on water supplies, and higher prices due to less resilient supply chains. By fully valuing nature’s productivity, NACs enable direct investment to conserve and restore the vital natural infrastructure that supports a vibrant economy, human wellbeing, and biodiversity.

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Intrinsic Exchange Group (IEG) is a financial innovation company that develops market-based solutions to enable nature, people, and economies to thrive. IEG has pioneered a new market structure, the natural asset company, or NAC, that makes nature and its productivity a valued, investable asset – driving conservation, restoration, natural infrastructure resilience, and investment returns. IEG advises on the formation and structuring of NACs; develops proprietary NACs; and identifies investment opportunities in synergy with NACs. 

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NACs are the first scalable, equity-based instrument for nature-positive investment. While credit-based instruments, such as carbon and biodiversity credits, have been successful in driving nature-based investment, challenges have kept them from scaling up to fulfill the mission of conservation, restoration, and transition to a circular economy. NACs expand on this groundbreaking work with important additions that overcome design aspects that limit other approaches. For example, a NAC investment is not solely reliant on credit pricing and policy-driven demand. NACs incorporate the full value of nature: intrinsic value, ecosystem services value, and option value, which reflects the potential for monetization of ecosystem services in the future. The NAC serves as a stabilizing umbrella structure that integrates existing credits and incentives – which can be monetized now – with the value of ecosystem services that have historically been left out of the economy and the option value of ecosystem services that could be monetized in the future.

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Natural asset owners have equity ownership in the NAC.  Owners, who may have a role in management of the NAC and/or representation on the board of directors, retain authority on how the natural asset is managed. Management is responsible for maximizing the ecological performance of the land, which increases the value of NAC shares. Learn more

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NACs are a versatile tool designed to deliver benefits across society.

Stewards of natural assets have had few options to fund their budgets for conservation, land restoration, adopting regenerative agriculture practices, or other goals. NACs can help owners of farms, ranches, forests and other natural assets to keep land productive while raising capital without debt, or selling land that has been in families for generations.

Companies, from food and fashion to consumer products, have regarded environmental, climate and supply chain resilience initiatives as an expense, or as philanthropy. NACs are a way to turn sustainability and supply chain resilience costs into investment opportunities that reduce financial exposure and offer potential long-term returns from capital appreciation.

For investors, NACs are a direct, nature-positive investment with measurable impact on climate, biodiversity, resiliency, and social outcomes. Investors may earn financial returns through asset appreciation, cash-flow generation, growing market acceptance, and increased capital inflows.

A defining attribute of a NAC is an equitable benefit sharing policy that articulates the commitment for sharing benefits with communities. The goal is that communities that depend on nature will be stakeholders in the enterprise: beneficiaries from the improved quality and quantity of ecosystem services produced, and also shareholders in the NAC.

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Capital appreciation of a NAC's equity can be driven by various factors, including an increase in the quality and quantity of ecosystem services; maximization of current and new revenue streams from payment for ecosystem services; nature’s inherent ability to reinvest in itself in perpetuity; and price discovery in the open market.

The return profile of a natural asset company is amplified by four core demand drivers. The more these demand drivers mature, the more NACs can generate value.

Regulatory pressures: Evolving legislation related to carbon, biodiversity, and land restoration that requires compliance and costly reporting activities

Corporate resiliency: Prioritization of supply chain security and operational resiliency efforts to manage nature dependencies and vulnerabilities.

Scarcity and resource value: Rising demand for ecosystem services (4% est. annual growth) given nature provides critical infrastructure for the global economy.

Investment evolution: Need for a direct investment into nature that provides a market rate of return.

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NACs can be a versatile tool for natural asset owners and the investors who are committing capital to finance the conservation and restoration of natural areas at scale and across generations.

NACs based on natural areas focus on protecting, expanding and restoring natural terrestrial and marine ecosystems. Examples include forests, grasslands, wetlands, and coral reefs.

NACs based on working lands focus on converting agricultural production practices to regenerative methods. Examples include farms, ranches, and sustainably managed forests.

NACs based on hybrid landscapes focus on increasing ecological performance across multiple land use types, including nature, working lands, and built infrastructure. A representative example is a NAC focused on improving the health of a bay, which has a watershed that could include agricultural lands, residential neighborhoods, parks, and towns that possess their own natural asset values. 

NACs can be a transition tool that builds on the traditional net-zero/offset model to include direct investment in nature, climate solutions, and human and social capital. By integrating a broad range of ecosystem services with existing credits and incentives, NACs offer a stabilizing umbrella structure for nature-positive investment. 

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NACs report in a two-part statement. Goods and services that generate cash flows, such as carbon credits, biodiversity credits, or the sale of crops grown on working lands, are accounted for under standard financial reporting: U.S. Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The value of nature that is currently beyond the scope of traditional financial reporting, such as ecosystem service production value, are captured in an Ecological Performance Report (EPR). The EPR includes sections with data on natural production, natural assets, and underlying asset condition.

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NACs can support corporate supply chain resilience in multiple ways.

NACs serve as a key tool in transitioning from the traditional net-zero/offset model to direct investment in nature, climate solutions, and human/social capital. Unlike existing carbon, biodiversity, and water quality credits, a NAC investment is not solely reliant on credit pricing and policy-driven demand. The NAC serves as a stabilizing umbrella structure that integrates existing credits and incentives while absorbing the risk associated with fluctuations in policy or market conditions that could impact the viability of those credits.

NACs offer a way to turn sustainability and supply chain resilience costs into investment opportunities. By structuring their environmental initiatives within a NAC, companies reduce financial exposure while managing projects and generating long-term returns from capital appreciation tied to ecological health improvements.

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Creating a circular economy that works for all requires an alignment of interests. When the interests of the public and healthy nature are aligned, natural assets can be a source of wealth creation, new job opportunities, and economic growth. That’s why one of the defining attributes of a natural asset company is an equitable benefit sharing policy that articulates the NAC’s commitment for sharing benefits with communities.  The goal is that communities that depend on nature will be stakeholders in the enterprise: beneficiaries from the improved quality and quantity of ecosystem services produced, and also shareholders in the NAC.

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