What unbalanced representation on an advisory committee looks like
The Climate-related Financial Risk Advisory Committee in the context of FACA
Back row from left (standing): James Stock, Ed Kearns, Wendy Cromwell, Ilmi Granoff, Sandra Lee, Bob Litterman, Noah Kaufman, Allen Fawcett, Emily Grover-Kopec, Cecilia Martinez
Front row from left: William Pizer, Peter Wilcoxen, Ivan Frishberg, Janine Guillot, Michael Panfil, Julie Renderos, Karen Diver, Catherine Ansell
Not pictured: Laura Bakkensen, Viral Acharya, and Tracey Lewis
Deep in the bowels of writings on government oversight one comes across FACA, or the Federal Advisory Committee Act. Passed into law in 1972, FACA provides a framework for managing government’s approximately 1,000 expert advisory committees.
One thousand certainly sounds like a lot. But it is considerably less than the estimated 2,600- 3,200 committees advising the government in 1971.
In 2020, the government enlisted the advice of at least 76,563 experts sitting on committees. At least about 10,000 of these were categorized as “representative members” and not subject to Federal ethics disclosures.
FACA was born from several decades of concern about the potential for advisory committees to do inappropriately influence government decision making and regulation.
A particular concern of Congress’ was balanced representation in advisory committee design. Specifically, FACA,
require[s] the membership of the advisory committee to be fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee
The US General Services Administration that now oversees FACA administration and data collection notes that towards balancing representation,
agencies are expected to consider a cross-section of those directly affected, interested, and qualified, as appropriate to the nature and function of the advisory committee.
Earlier this year, the Climate related Financial Advisory Committee (CFRAC) held its first meeting. The CFRAC was created by the Financial Stability Oversight Council, an interagency group with the responsibility of ensuring national financial stability.
The CFRAC charter outlines the following for membership
Scholars have noted that “fairly balanced” has a controversial history for FACA. Still, if just looking at the 21 members of CFRAC that met this year, it is apparent that a variety of stakeholders can also represent a singular special interest.
Below is a graph showing the range of connections between the members and their organizations. Not all the members are shown below, I only highlight the most obvious of connections. You might know of some others.
I am out of time for today to detail each connection in depth. But there are some clarifications in order.
First, Rob Litterman, of Kepos Capital, is everywhere and nowhere. He is well represented on boards of important organizations in climate finance and even sits on the board at Stanford’s Woods Institute for the Environment. Litterman chaired the notable report of the CFTC on climate risk.
Because of his tremendous network his appearance on advisory committees such as these implies representation of a good number of influential groups. Which then has connections to even more groups.
Second, WWF, Ceres, and SASB/ISSB are all affiliated through their work with CDP. An excellent comment was left on my previous post related to the collaborative work of these organizations.
Third, Bezos Earth Fund gave a sizable chunk of change to EDF for their private business in methane observation.
*Update 8/4: Fourth, I received an emailed question that led me to realize that there are more links between First Street and EDF and First Street and Rhodium. A rep of EDF and Rhodium sit on the First Street Board which is in addition to the collaborations.
Well, I’ll leave it at that. I’m sure there is more here that you might see that I missed.
I cannot imagine that the CFRAC meets FACA requirements for fairly balanced representation. But if it does there are clearly serious shortcomings to the design and implementation of the FACA.