America’s 10 largest publicly traded home builders have started to improve their policies and practices relating to the environment and resources, but much progress remains to be achieved, according to a new study by Calvert Investments , a sustainable and responsible investment firm. KB Home and Pulte ranked at the top of Calvert's list, while Meritage Homes, Toll Brothers, and Standard Pacific all improved against Calvert’s previous ranking. DR Horton and Ryland Group lost ground. (Pictured: Primrose models by KB Home at the Irvine Village of Portola Springs, Irvine, Calif.)
According to the report: “Out of 42 possible points, the average total score was just over six points, or 15 percent. While all 10 home builders 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 home builders were ranked as follows for 2010:
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. Homes account for about 21 percent of U.S. energy-related carbon dioxide emissions, a figure which places considerable responsibility on home builders 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 home builders’ 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 home builders 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. home builders 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 home builders,” 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 home builders 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.”
OTHER KEY FINDINGS
For a full copy of the report, go to http://www.calvert.com .