Natural Asset Companies

Description

Louise Borreani and Pat Rawson:

"Natural Asset Companies (NACs) are legal entities that manage and govern natural capital, but do not have the right to liquidate/privatize the natural asset. Instead, they “are chartered to protect, restore, and grow the natural assets under their management to foster healthy ecosystems.”[60] In Web3, NAC-like entities tend to be attached to sister DAO entities through some sort of legal tethering. This process enables DAOs to “delegate limited authority over assets transferred from DAO community treasuries (including potentially tokens and IP) to a board/council that is subject to fiduciary obligations solely to the community and DAO”.[61] This is a common requirement for handling natural assets, as direct DAO ownership of natural assets is operationally unfeasible primarily due to legal constraints.

Tokenized shares of Natural Asset Companies, or other institutional control-bearing instruments like network governance tokens, are relevant to this mapping as they have a more or less direct impact on supply and demand for high quality natural capital. Fractionalized control of such entities implies community ownership of a commons, a historically proven governance form that is particularly useful for natural capital co-management.[62] For example, as Nepal’s forests were being threatened to disappear, the government voted in 1993 a forestry act allowing “Nepal’s forest rangers to hand over national forests to community forest groups. The result of this community-led management was a near-doubling of forest cover.

NACs often divert from traditional for-profits. For example, Benefit Corporations (B Corps) are a type of for-profit corporate entity that includes positive impact on society, workers, the community, and the environment in addition to profit as its legally defined goals. Similarly, "steward-ownership" companies prioritize enterprise ethics and mission over financial gain and seek to balance the interests of all stakeholders (including employees, customers, and the community). Steward-owned companies typically embed principles into their legal structure that ensure they remain independent, mission-driven, and governed by those who are most closely involved with the business. One of the most known steward-owned companies is the outdoor clothing brand Patagonia.

In Web3, novel concepts are emerging where NAC shares are being tokenized. One example is the Traditional Dream Factory (TDF),[66] a Web3 co-living space situated in Portugal. TDF oversees diverse food forests and reforestation initiatives, with a unique legal approach where "the land owns itself." In practice, the land is held by OASA, an Association akin to a Land Trust, and legally represents the TDF DAO. TDF Members possess the right to utilize the constructed facilities on the land, coupled with the responsibility to nurture the soil and enhance its vitality. The TDF token facilitates governance over the TDF DAO / OASA, operating similarly to a tokenized NAC share."

(https://mirror.xyz/ecofrontiers.eth/zkh2LoADInAgr7GLbXnsuUOEcwJKFE4GuUSYuYU22io)