Some Green Progress Seen Among Homebuilders

Some Green Progress Seen Among Homebuilders
BETHESDA, MD - America's 10 largest publicly traded homebuilders have started to improve their policies and practices relating to the environment and resources, but much progress remains to be achieved, according to a major new study by Calvert – one of the nation's leaders in the field of sustainable and responsible investing. KB Home and Pulte were ranked as the top industry firms. Improvement from Calvert's earlier 2008 "green homebuilder" report was noted for Meritage Homes, Toll Brothers, and Standard Pacific, while DR Horton and Ryland Group lost ground.

Titled "A Green Recovery for America's Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry," Calvert's 2010 survey of major homebuilder sustainability notes: "Out of 42 [possible] points, the average total score was just over six points, or 15 percent. While all 10 homebuilders have made some effort to develop environmental policies or practices, or to offer environmental products, there is strong differentiation in the level of commitment to sustainability and the penetration of 'green' homes in each company's product mix. Without leading companies KB Home and Pulte Homes, the overall analytical performance of the industry in our study would have been far worse — scoring an average of less than 6 percent against key green data points."

The top 10 homebuilders were ranked as follows for 2010: #1 KB Home, Los Angeles (#1 in 2008); #2 Pulte Homes, Bloomfield Hills, MI (tied for #2 in 2008); #3 Meritage Homes, Scottsdale, AZ (#8 in 2008); #4 Toll Brothers, Horsham, PA (#9 in 2008); #5 Lennar, Miami, FL (#5 in 2008); #6 DR Horton, Fort Worth, TX (tied for #2 in 2008); #7 Standard Pacific, Irvine, CA (tied for #11 in 2008); #8 NVR, Reston, VA. (last at #13 in 2008); #9 Ryland Group, Calabasas, CA (#6 in 2008); and #10 MDC Holdings Denver, CO (tied for #11 in 2008).

Green building represents a major opportunity to the industry as it focuses on rebuilding its market and restoring financial profitability. Estimated at $36-49 billion, the green building market is expected to increase twofold between 2009 and 2013(1). Homes account for about 21 percent of U.S. energy-related carbon dioxide (CO2) emissions, a figure which places considerable responsibility on homebuilders to manage their contribution to climate change by addressing, among other things, the energy efficiency of their products.

"KB Home has maintained its #1 spot in our rankings. Toll Brothers, Meritage, and Standard Pacific have made modest to significant progress since our last review. Overall, the economic crisis has not thwarted many homebuilders' efforts to become more sustainable companies," said Stu Dalheim, Director, Shareholder Advocacy, at Calvert Asset Management Co., Inc. "With the increasing importance of issues such as energy supply, climate change, and smart growth, investors will need far greater disclosure from homebuilders in order to understand their capacity to address these major drivers. As with our previous survey, we found that the homebuilding industry still does not provide the information investors and consumers need. We believe that if these companies wish to continue as market leaders in new residential construction, they must not only embrace green building as a core business strategy, but also make information about their sustainability practices publicly available so that stakeholders can better understand, assess, and appreciate the efforts being undertaken."

"Our survey of the 10 largest publicly traded U.S. homebuilders finds an evolving landscape. Whereas two years ago the industry had not yet begun to embrace sustainability as a core part of building design and construction, companies today have taken many meaningful steps toward developing greener and cleaner homes," said Rebecca Henson, Sustainability Analyst at Calvert Asset Management Co., Inc. and co-author of the report. "Much of this progress may be attributable to companies' recognition of the environmental, societal, and economic benefits of green building, as well as the critical roles that engaged stakeholders have diligently played over the past decade. However, given the environmental impact that homebuilding has, the industry has significantly more progress to make."

"We are proud to maintain the #1 ranking among homebuilders," said Jeffrey Mezger, President and Chief Executive Officer, KB Home. "While we realize there is more for us to accomplish as a company and as an industry to better the environment, we look forward to further educating consumers and paving the way through innovation and collaboration with other like minded companies."

"Our in-depth review analyzes five areas that present significant challenges to the industry- land, building materials, energy, water, and climate change. While many homebuilders have made some regional efforts to address these five areas, we are witnessing the stirrings of an industry shift towards nation-wide implementation," said Jennifer Green, Associate Sustainability Analyst at Calvert Asset Management Co., Inc. and co-author of the Report. "We are heartened to see that more companies are now favoring greater transparency than they were at the time of our last review. The leading companies in our survey have the first mover's advantage in that they can influence industry trends and can be more flexible in responding to the stress a changing climate will no doubt place upon their operations."

For a full copy of the report, go to:
Source: Calvert

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