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Nature has value. could we literally invest in it?

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The New York Times or enjoy below:

🗞️ Driving the news: The concept of "natural asset companies" (NACs) proposes putting a market price on the value of ecosystems, aiming to protect nature by integrating its value into the financial system
• This innovative idea seeks to lease land for its natural benefits, like clean air and water, rather than for development into subdivisions or malls
• Although the New York Stock Exchange recently withdrew a proposal to list NACs amid opposition, the movement to assign market value to natural assets continues to gain support among environmentalists, investors, and philanthropists

🔭 The context: Traditional economic models only recognize the value of natural resources like forests when they are converted into goods
• NACs challenge this by recognizing and capitalizing on the ecosystem services that intact natural environments provide
• This approach aligns with broader movements to incorporate natural capital accounting into economic metrics, aiming to ensure that the benefits of nature are recognized and preserved

🌍 Why it matters for the planet: Assigning a market value to natural assets could revolutionize conservation efforts by providing financial incentives to preserve ecosystems
• This model promises to attract investment towards maintaining and enhancing natural habitats, potentially offering a sustainable solution to biodiversity loss and environmental degradation

⏭️ What's next: Despite setbacks in public market recognition, the development of NACs continues in private markets
• Proponents are working on prototypes to demonstrate the viability and benefits of investing in natural assets. Success in these endeavors could pave the way for broader acceptance and implementation of the NAC model, influencing future conservation and investment strategies

💬 One quote: "All of these things, if you think about it, are social agreements to a degree," - Douglas Eger, founder of the Intrinsic Exchange Group

Click for more news covering the latest on environmental sustainability

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