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Intrinsic Exchange Group: A new way to invest in nature via a new asset class to be listed and traded on the NYSE.

Intrinsic Exchange Group Case Study:

We come across many wonderful companies doing great work in impact investing, but it is rare to come across big, bold, investible ideas that have the potential to upend how we all think about investing. Intrinsic Exchange Group (IEG) is one such exciting young company.

I

EG is attempting to solve a shortcoming inherent in our current investment marketplace: we cannot value what we do not measure. For too long nature has been left out of our economic accounting frameworks. As a result, while natural resources are a source of enormous economic value to society, the monetization of that value has been almost entirely extractive.

A rainforest in Indonesia provides much more value to the world and to our economy than just land for planting soy crops and yet those additional, higher, sources of value – commonly referred to as ecosystems services – are mostly not accounted for. Ecosystem services are varied and can include things like carbon sequestration, flood protection, eco-tourism, clean water and species habitat – all the things we have appreciated about nature but have never valued in our economy.

Until now.

This fall, IEG announced a partnership with the New York Stock Exchange (NYSE), a minority investor in IEG, to create a new type of listing, called a Natural Asset Company (NAC), that will trade on the Exchange. NACs are sustainable enterprises that hold the rights to ecosystem services produced by natural, working or hybrid lands.

IEG works with natural asset owners to form and list NACs. Investors in a NAC buy shares in the corporation, as they would in any publicly traded stock, and the financial capital that is raised is used to maintain or improve the lands. As the value of the ecosystem services rises, so too will the value of the Natural Asset Company.

IEG has developed an accounting framework to measure ecological performance to complement GAAP financial statements. Developed in consultation with former FASB Chairman Robert Herz and leading accounting firms, IEG’s framework enables investors to value the ecosystem services generated by NACs. IEG has received initial funding from IDB Lab and Inter-American Development Bank (IADB), The Rockefeller Foundation and Aberdare Ventures and Entertaining Ideas.

Confluence Partners worked with IEG on the launch of their company and the NYSE announcement. IEG knew that a concept as complex and unfamiliar to Wall Street would require a PR firm with a deep grounding in financial and impact concepts to create a narrative that could be easily digested by journalists. Confluence stepped in to answer the call.

The novelty of the partnership and complexity of the venture created enormous communications challenges. Before any ink could be spilled by journalist, we first had to home IEG’s story to maximize receptivity on the buy-side and sell-side on Wall Street. Days and nights were then spent backgrounding journalists in some of the core concepts. We then helped the journalists translate the NYSE announcement stories that would resonate with their audiences.

The work paid off.

Announced at the NYSE at the height of the COVID-19 pandemic, our efforts garnered mainstream media and trade media coverage, including Bloomberg, Reuters, Fortune, ImpactAlpha, Impact Entrepreneur, Kiplinger, leading to IEG CEO Douglas Eger’s being featured on a number of podcasts including The Changemaker Series, hosted by Women of the World Endowment, and Impact Entrepreneur.

More importantly, the media coverage resulted in numerous in-bound inquiries from the buy-side, NGOS and governments seeking to protect their natural resources while creating new economic opportunity through the creation of NACs in their countries.

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