Homebuilders Sector Analysis

Transcription

1 27 Homebuilders ector Analysis Pacific ustainability Index cores J. mil Morhardt lgeritte Adidjaja Jeniffer Aleman-Zometa Britta Beckstead Courtney Cikach Meghan Wilson

2 Contents Company Rankings ummary Director's Foreword Lead Analyst's Comments The Pacific ustainability Index in a Nutshell coring Criteria nvironmental Intent lement of the PI cores nvironmental Reporting lement of the PI cores ocial Intent lement of the PI cores ocial Reporting lement of the PI cores nvironmental cores Ranking ocial cores Ranking ummary of Depth of nvironmental Topic Discussion ummary of Depth of ocial Topic Discussion Visual Cluster Analysis Relationship between overall PI core and Companies' conomic Indicators Analysts Comments, alphabetically listed by company name Page The publishes analyses of corporate environmental and social reports together called sustainability reports on the web and in special reports. We also write books about environmental and sustainability reporting, the first of which is Clean, Green, and Read All Over: Ten Rules for Corporate nvironmental and ustainability Reporting, available from AQ Press, and publish articles in academic technical journals. All of our sector reports are available for free download at /PI/ectorReports.asp. Printed copies are available for purchase from the same site. Airline (27) Chemicals (24, 26, 27) College and Universities (26) Computer, Office quipment, and ervices (27) Consumer Food, Beverages, Food Production (, 27) lectronics, emiconductor and Peripherals (24, 26) nergy (, 26) ntertainment (27) Forbes Largest Private and Public Companies (27) Food ervices (27) Forest and Paper Products (, 27) Fortune 1 Companies in California (27) General Merchandisers (27) Homebuilders (27) Industrial and Farm quipment (26) Metals (26) Mining, Crude-Oil Production (26, 27) Motor Vehicles and Parts (24, 26) Oil and Gas quipment and ervices (27) Pharmaceuticals (24, 26, 27) Petroleum and Refining (24, 27) Railroads (27) cientific, Photo, and Control quipment (27) Questions should be addressed to: Dr. J. mil Morhardt, Director (emorhardt@cmc.edu) Claremont McKenna College 9 N. Mills Ave. Claremont, CA , UA Direct line: (99) lgeritte Adidjaja, Research Fellow: (99) (eadidjaja@cmc.edu) Departmental secretaries: (99) The goal of corporate report analysis conducted by the is to acquaint students with environmental and social issues facing the world s industries, and the ways in which industry approaches and resolves these issues. The data presented in this report were collected by student research assistants and a research fellow at the. Copyright 27 by J. mil Morhardt. All rights reserved. 2

3 Homebuilders ector Corporate nvironmental and ustainability Reporting Company Rankings Overall Grade Centex Corp Meritage Homes A+ C+ C+ Centex Corp (U..) Meritage Homes (U..) WCI Communities (U..) W CI Communities 1.28 C+ Beazer Homes UA (U..) Beazer Homes UA 1.19 C KB Home (U..) KB Home William Lyon Homes tandard Pacific C C C- C- William Lyon Homes (U..) tandard Pacific (U..) M.D.C. Holdings, Inc. (U..) NVR Inc. (U..) M.D.C. Holdings, Inc C- Lennar Corp. (U..) NVR Inc. Lennar Corp. Pulte Homes D+ D D F Pulte Homes (U..) Toll Brothers (U..) Hovnanian nterprises (U..) Ryland Group Inc (U..) Toll Brothers 3.31 F D.R. Horton (U..) Hovnanian nterprises 2.94 Ryland Group Inc.67 D.R. Horton This report is an analysis of the voluntary environmental and social reporting of companies on the 26 Global 5 and Fortune 1 Homebuilders sector lists. Data were collected from corporate websites during the initial analysis period (dates shown below). A draft sector report was then made available online and letters were sent to all companies inviting them to review the analysis, to identify anything missed by our analysts, and to post additional material on their websites if they wished to improve their scores. One of the 15 companies, Centex responded with a plethora of brochures indicating a substantial sense of social responsibility and a management intent to produce a GRI based report. Because the sector scored so poorly we best our rules and rescored Centex based on the printed materials, moving Centex into first place. Analysis Period: Draft sector report available for review: 12/1/26 through 5/16/27 7/18/27 through 8/31/27 3

4 ummary Highest Overall cores Centex Corp Meritage Homes William Lyon Homes Lowest Overall cores D.R. Horton Ryland Group Inc Hovnanian nterprises Highest nvironmental Reporting cores KB Home WCI Communities Centex Corp Highest ocial Reporting cores Centex Corp Meritage Homes Beazer Homes UA Most Frequent nvironmental Reporting Topic Accountability Most Frequent nvironmental Performance Topic Most Frequent social reporting Topic Water Recycling nergy Vision Most Frequent ocial Performance Topic Qualitative ocial 4

5 Director's Foreword The homebuilding sector is in a position to champion and deliver energy efficient homes that could substantially decrease U energy consumption, but it doesn t often go very far in that direction. For example, Federal and tate tax incentives for thermal and photovoltaic solar panels, combined with the purchasing power of large homebuilders and the low incremental costs of installation on new construction would make it possible for owners of new homes in many locations across the U to have minimal water heating and substantially lowered electricity bills at not much additional cost, especially if financed over a 3-year mortgage. In many places the installation, during construction, of a modern evaporative cooling system would obviate the need for refrigeration-based cooling and at much lower initial and operating costs. I own such a cooling system and I like it far better than refrigeration cooling: I can keep the windows open, be a little more in touch with the environment, and still be cool. But as I drive through the massive new housing developments in California s Mojave Desert next to Los Angeles, one of the best places in the world for solar power and evaporative cooling, and one of the fastest growing, there is nary a photovoltaic or thermal hot water panel or evaporative cooling system in sight. I m sure that the homebuilders would tell me that this is a highly competitive market and that the potential buyers would never pay for such amenities after all, the payback time is (or maybe was, before $99/barrel oil) longer than these buyers are likely to own their homes. On the other hand, it is clear that the homebuilders believe that advertising can influence home buyers choices, and that some kind of competitive advantage other than the most acrobatic sign twirlers or most clever development name would be useful to them. New car buyers are often more interested in their monthly payments than in the underlying economics. I wouldn t be surprised if an enterprising builder could think of a way to build the reduced energy costs into the mortgage payments, or at least convince the buyer that that was the proper way to view them. If we as a society are going to decrease our carbon footprint, someone is going to have to exert some leadership, and it seems to me that the homebuilding industry might just be able to do it and make some additional money too. J. mil Morhardt 12/7/27 Claremont, California 5

6 Lead Analyst's Comments The homebuilding sector is small, yet has a large social and environmental impact on society. The companies did not have environmental and social responsibility reports; instead the information about the companies is based on their web pages. Generally this sector provides very little information and gets very low PI scores. The companies in this sector need to start reporting more on environmental and social issues. These issues are important and should be clearly detailed in a formal report and not casually talked about on their web pages. The companies that comprise the homebuilder sector do not talk much about their environmental intent. Fewer than 2% of the companies talked about environmental issues in general, such as habitat conservation and impact on global warming. This sector is responsible for the use of vast quantities of materials for homebuilding, materials ranging from metals to wood. These companies should include their usage of materials, water, energy and their contribution to waste. ince these materials are being used and they come from the natural environment, the companies should touch on their responsibility to sustaining a healthy environment. ince this is the homebuilder sector, the homes being built can be more environmentally friendly in terms of conserving energy and water. Although this is more expensive, the bar could be raised across the board and all companies should be expected to build more environmentally friendly homes. Resources are not inexhaustible and land development causes major changes on ecosystems. The companies should at least address issues of biodiversity since extinct species cannot come back. Building homes on wetlands and estuaries poses a huge threat to migratory birds and diminishes valuable land used for breeding or as a stop-over for birds that need to refuel during migration. These are some reasons why homebuilders should feel a responsibility towards maintaining a healthy environment and reporting their contributions to its improvement. There was more reporting on social intent in the web pages. Most companies contributed socially to the community in which they were based and also had a formally detailed code of ethics. This sector completely neglected reporting on the demographics of their workforce and their employment of individuals with social disabilities. Although a fair number of companies have community development programs as well as employee volunteerism, fewer than 3% of the companies report having made a social community investment. Fewer than 2% of companies report on important issues such as bribery, anti-corruption practices, and sexual harassment. None of the companies in the sector reported on advancement of women and free association and collective bargaining of employees. Most companies do some type of social reporting, however the issues would be better served with a more detailed and formal approach to these topics. Overall, the homebuilding companies need to invest in efforts to report on social and environmental issues. It is their responsibility as major contributors to land development to enhance environmental sustainability, especially in an era where this issue is starting to escalate. 6

7 Corporations have a general responsibility to society to helping those in need and contributing time and money to improve their living standards. Homebuilders should be held responsible for making contributions to communities and reporting it. Jeniffer Aleman-Zometa Pitzer College '7 Claremont, California 12/7/27 7

8 The Pacific ustainability Index (PI) Overview the PI coring ystem The Pacific ustainability Index (PI) uses two systematic questionnaires to analyze the quality of the sustainability reporting a base questionnaire for reports across sectors and a sector-specific questionnaire for companies within the same sector. The selection of questions is based on, and periodically adjusted to, the most frequently-mentioned topics in over 9 corporate sustainability reports analyzed from 22 through 27 at the. The The is an environmental research institute at Claremont McKenna College (CMC). Its mission is to provide students of all the Claremont colleges with a comprehensive and realistic understanding of today s environmental issues and the ways in which they are being and can be resolved, and to identify, publicize, and encourage policies and practices that achieve economic and social goals in the most environmentally benign and protective manner. The Center is partially funded by an endowment from George R. Roberts (Founding Partner of Kohlberg Kravis Roberts Co. and CMC alumnus), other grants, and gifts, and is staffed by faculty and students from the Claremont Colleges. Methodology tudent analysts download relevant nglish language web pages from the main corporate web site for analysis. Our scoring excludes data independently stored outside the main corporate web site or available only in hard copy. When a corporate subsidiary has its own sustainability reporting, partial credit is given to the parent company when a direct link is provided in the main corporate web site. We archive these web pages as PDF files for future reference. Our analysts use a keyword search function to search reporting of specific topics and, they fill out a PI scoring sheet ( and track the coverage and depths of different sustainability issues mentioned in all online materials. scores and ranks When they are finished scoring, the analysts enter their scoring results into the PI database. The PI database calculates scores and publishes them on the Center s web site. This sector report provides an in-depth analysis on sustainability reporting of all the largest companies in California, as listed in the 26 Fortune 1 lists. Prior to publishing our sector report, we notify companies analyzed and encourage them to provide feedback and additional new online materials, which often improve their scores. What do the scores mean? We normalize all the scores to the potential maximum score. cores of subsets of the overall score are also normalized to their potential maxima. The letter grades (A+, A, A-, B+, etc.), however, are normalized to the highest scoring company analyzed in the report. Grades of individual companies in the report might be different from grades posted online on the 's web site, since the normalization of scores of an individual company online is not limited to the companies analyzed in the sector report, but also includes other companies of the same sector irrespective of the year of analysis. Companies with scores in the highest 4% get A+ and any in the bottom 4% get F. We assign these by dividing the maximum PI score obtained in the sector into 12 equal parts then rounding fractional score up or down. This means that A+ and F are under-represented compared the other grades. The same technique applies to the separate categories of environmental and social scores. Thus, we grade on the curve. We assume that the highest score obtained in the sector and any scores near it represent the state of the art for that sector and deserve an A Global 5 and Fortune 1

9 coring Criteria intent The intent category measures the coverage and company s involvement in general environmental or social issues. The criteria for achieving a score in the Intent category are a discussion of the topic and an example of an initiative or action taken by the reporting company on the topic. reporting Reporting scores reflect transparency in publicly discussing the company s dealings with environmental issues independent of success in making improvements. The maximum score for each topic in the Reporting category is five points, relating to both qualitative and quantative elements. Three points are available for a qualitative topics: 1. Discussion of the topic 2. Initiative or action taken by the company on the topic 3. Demonstration of an external context that shows how performance relates to that of peer companies, to that of industry standards, or demonstrates recognition from third parties, such as awards. Five points are available for quantitative topics:: 1. A discussion on the topic 2. An external context 3. One or more explicit numerical goals 4. A numerical measure of performance of the topic 5. One or more previous measures of numerical performance. In addition to these scores, in the social reporting category, there is a series of 11 human rights topics that are given seven points each if they are mentioned. Performance For quantitative topics, when the current performance is superior to that previously reported, we give one point. Another point is awarded if the latest numerical value of the quantitative performance is above the mean value of all of the performance values we have for the particular sector analyzed. Thus, individual companies cannot be scored fully independent of data from other companies in the sector. Distribution of cores by topics ocial, Quantitative Data 9% nvironmental, Qualitative Data 21% ocial, Qualitative Data 28% nvironmental, Quantitative Data % ocial, Human Rights Data 17% 9

10 Homebuilders nvironmental Intent lement of the PI cores Habitat/ecosystem conservation nvironmental visionary statement Report contact person nvironmental education Green purchasing Biodiversity Climate change/global warming nvironmental policy statement nvironmental structure or management nvironmental accounting nvironmental impediments and challenges nvironmental management system takeholder consultation % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% = Reporters = Non-reporters = Depth of discussion The Reporters and Non-Reporters bars reflect the percentage of companies addressing the topics. The Depth of Discussion bars reflect the percentage of the total possible number of points awarded to all companies combined. 1

11 Homebuilders nvironmental Reporting lement of the PI cores Renewable energy or energy efficiency Water used Waste recycled nergy used nvironmental expenses and/or investments Office recycling rate Hazardous waste released Waste water released Waste disposed of Volatile organic carbon (VOC) ulfur oxides (Ox) Ozone depleting substances from refrigerant Life Cycle Analysis (LCA) Biochemical Oxygen Demand (BOD) Hazardous waste produced/disposed Greenhouse gases, total nvironmental notices of violation nvironmental fines nergy produced from renewable resources Carbon dioxide (CO2) Nitrogen oxides (NOx) % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% = Reporters = Non-reporters = Depth of discussion The Reporters and Non-Reporters bars reflect the percentage of companies addressing the topics. The Depth of Discussion bars reflect the percentage of the total possible number of points awarded to all companies combined. 11

12 Homebuilders ocial Intent lement of the PI cores ocial visionary statement Code of conduct or business ethics mployee training, skills, and learning ocial policy statement mergency preparedness program mployment for individuals with disabilities ocial impediments and challenges ocial or Health and afety organization structure or management Demographic nature of the workforce: Age ocial initiatives, including donations and grants upplier screening based on social or environmental performance. Third party validation % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% = Reporters = Non-reporters = Depth of discussion The Reporters and Non-Reporters bars reflect the percentage of companies addressing the topics. The Depth of Discussion bars reflect the percentage of the total possible number of points awarded to all companies combined. 12

13 Homebuilders ocial Reporting lement of the PI cores Community Development mployee volunteerism Fair compensation of employees qual opportunity, elimination of discrimination, promotion of diversity, or non-discrimination policy ocial community investment Community ducation mployee atisfaction urvey Corporal punishment of employees Bribery Anti-Corruption practices Occupational health and safety protection Working hours exual harassment Political Contributions Demographic nature of the workforce: thnicities/race Turnover Rate Recordable incident rate Use of illegal child labor Lost workday case rate Health and safety fines Health and safety citations Forced labor of employees Advancement of women Demographic nature of the workforce: Gender Free association and collective bargaining of employees % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% = Reporters = Non-reporters = Depth of discussion The Reporters and Non-Reporters bars reflect the percentage of companies addressing the topics. The Depth of Discussion bars reflect the percentage of the total possible number of points awarded to all companies combined. 13

14 nvironmental Intent cores WCI Communit ies Toll Brot hers Cent ex Corp KB Home t andard Pacif ic Ryland Group Inc Merit age Homes Beazer Homes UA William Lyon Homes M.D.C. Holdings, Inc. NVR Inc. Lennar Corp. Pulte Homes Hovnanian nt erprises D.R. Hort on nvironmental Reporting cores A+ B- C C- D D- F F F F Ten Highest Ranked cores nvironmental Intent WCI Communities Toll Brothers Centex Corp KB Home tandard Pacific Ryland Group Inc William Lyon Homes Meritage Homes M.D.C. Holdings, Inc. Beazer Homes UA nvironmental intent scores include topics about the firm s products, environmental organization, vision and commitment, stakeholders, environmental policy and certifications, environmental aspects and impacts, choice of environmental performance indicators and those used by the industry, environmental initiatives and mitigations, and environmental goals and targets. KB Home Cent ex Corp WCI Communit ies Merit age Homes Beazer Homes UA William Lyon Homes t andard Pacif ic M.D.C. Holdings, Inc. NVR Inc. Lennar Corp. Pulte Homes Toll Brot hers Hovnanian nt erprises Ryland Group Inc D.R. Hort on nvironmental Performance cores Cent ex Corp A+ C- D+ F F F F F F F nvironmental Reporting KB Home Centex Corp WCI Communities William Lyon Homes tandard Pacific Ryland Group Inc Meritage Homes M.D.C. Holdings, Inc. Beazer Homes UA NVR Inc. nvironmental reporting scores are based on the degree to which the company discusses its emissions, energy sources and consumption, environmental incidents and violations, materials use, mitigations and remediation, waste produced, and water used. They also include use of life cycle analysis, environmental performance and stewardship of products, and environmental performance of suppliers and contractors. nvironmental Performance Merit age Homes WCI Communit ies Beazer Homes UA KB Home William Lyon Homes t andard Pacif ic M.D.C. Holdings, Inc. NVR Inc. Lennar Corp. Pulte Homes Toll Brot hers Hovnanian nt erprises Ryland Group Inc D.R. Hort on nvironmental performance scores are based on whether or not the firm has improved its performance on each of the topics discussed under the heading of environmental reporting, and on whether the quality of the performance is better than that of the firm s peers. coring for each topic is one point if performance is better than in previous reports, two points if better than industry peers, three points if both. 14

15 ocial Intent cores Cent ex Corp KB Home William Lyon Homes t andard Pacif ic Merit age Homes NVR Inc. WCI Communit ies Beazer Homes UA Pulte Homes Hovnanian nt erprises M.D.C. Holdings, Inc. Ryland Group Inc Lennar Corp. Toll Brot hers D.R. Hort on ocial Reporting cores A+ A+ A+ A+ B+ B+ C+ C+ C+ C+ Ten Highest Ranked cores William Lyon Homes tandard Pacific KB Home Centex Corp Meritage Homes NVR Inc. WCI Communities Beazer Homes UA Hovnanian nterprises Pulte Homes ocial Intent ocial intent scores include topics about the firm s financials, employees, safety reporting, social management organization, social vision and commitment, stakeholders, social policy and certifications, social aspects and impacts, choice of social performance indicators and those used by the industry, social initiatives and mitigations, and social goals and targets. ocial Reporting Cent ex Corp Beazer Homes UA Merit age Homes Lennar Corp. M.D.C. Holdings, Inc. WCI Communit ies William Lyon Homes NVR Inc. t andard Pacif ic Pulte Homes KB Home Hovnanian nt erprises A+ B B C+ C C C C- C- C- Centex Corp Beazer Homes UA Meritage Homes Lennar Corp. M.D.C. Holdings, Inc. WCI Communities William Lyon Homes NVR Inc. tandard Pacific Pulte Homes Toll Brot hers Ryland Group Inc D.R. Hort on ocial Performance cores Cent ex Corp Merit age Homes Beazer Homes UA William Lyon Homes NVR Inc. t andard Pacif ic M.D.C. Holdings, Inc. Lennar Corp. Pulte Homes WCI Communit ies KB Home Hovnanian nt erprises Toll Brot hers ocial reporting scores are based on the degree to which the company discusses various aspects of its dealings with its employees and contractors. They also include social costs and investments. A+ A- B C+ C C- C- C- C- D+ ocial Performance Centex Corp Meritage Homes Beazer Homes UA William Lyon Homes NVR Inc. tandard Pacific M.D.C. Holdings, Inc. Lennar Corp. Pulte Homes WCI Communities ocial performance scores are based on improvement, performance better than the sector average, or statements of compliance with established social standards. Ryland Group Inc D.R. Hort on

16 Homebuilders ummary of the Depth of nvironmental Topic Discussions The thicker lines are the percentages of total average scores for all companies combined. The thinner lines are the total possible scores (1%). nvironmental Intent Accountability Vision Management Policy nvironmental Reporting and Performance nergy Water 4 2 Management and Misc. Waste Recycling 16

17 Homebuilders ummary of the Depth of ocial Topic Discussions The thicker lines are the percentages of total average scores for all companies combined. The thinner lines are the total possible scores (1%). ocial Intent Accountability Vision 4 2 Management ocial Demographic Policy ocial Reporting and Performance Human Rights Quantitative ocial Management Qualitative ocial 17

18 Visual Cluster Analysis Visual cluster analysis multivariate data of the sort produced by the PI are difficult to summarize. Here we have created radar diagrams of the performance of each company analysed in the sector by its environmental and social intent, reporting, and performance sorted by company ranking. Maximum scores will match the outer sides of the hexagon which total up to 1 percent. I = nvironmental Intent, R = nvironmental Reporting, P = nvironmental Performance I = ocial Intent, R = ocial Reporting, P = ocial Performance R 1 R 1 R 1 R 1 R 1 I 75 5 P I 75 5 P I 75 5 P I 75 5 P I 75 5 P I P I P I P I P I P R R R R R Centex Corp Meritage Homes WCI Communities Beazer Homes UA KB Home R 1 R 1 R 1 R 1 R 1 I 75 5 P I 75 5 P I 75 5 P I 75 5 P I 75 5 P I P I P I P I P I P R R R R R William Lyon Homes tandard Pacific M.D.C. Holdings, Inc. NVR Inc. Lennar Corp. R 1 R 1 R 1 R 1 R 1 I 75 5 P I 75 5 P I 75 5 P I 75 5 P I 75 5 P I P I P I P I P I P R R R R R Pulte Homes Toll Brothers Hovnanian nterprises Ryland Group Inc D.R. Horton 18

19 Relationships Between Overall PI core and Companies' conomic Indicators Overall PI cores R 2 = Revenue ($M) Company Name Overall core Revenue ($million) Net Income ($million) Net Profit Margin* Number of mployees nd Fiscal Year Centex Corp $12,859.7 $1, Mar Meritage Homes 1.93 $3,1.1 $ Dec WCI Communities 1.28 $2,61.8 $ Dec Beazer Homes UA 1.19 $4,995.4 $ ep KB Home 9. $9,441.7 $ Nov William Lyon Homes 8.89 $1,856. $ Dec tandard Pacific 8.33 $4,11.4 $ Dec M.D.C. Holdings, Inc $4,884.2 $ Dec NVR Inc $5,275.1 $ Dec Lennar Corp $13,867. $1, Nov Pulte Homes 5.33 $13,867. $1, Nov Toll Brothers 3.31 $5,793.4 $ Oct Hovnanian nterprises 2.94 $5,348.4 $ Oct Ryland Group Inc.67 $4,817.6 $ Dec D.R. Horton. $13,863.7 $1, ep ource: Latest available data for all companies of the same year from Hoovers.com (*calculated) Data with no month on the nd Fiscal Year column were extracted and converted to U Dollar from the companies' annual reports 19

20 Overall PI cores R 2 = Number of mployees Overall PI cores R 2 = Net Profit Margin Overall PI cores R 2 = Net Income ($M) 2

21 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Beazer Homes UA Comparison with sector averages C+ ource of points Beazer Homes UA 27 web pages Beazer Homes UA contributes to HomeAid, a non-profit organization, by helping to build homes and contributing money. The company's social outreach is substantial but environmental reporting is completely missing other than a brief mention of green design for the Family Center for Katrina vacuees. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy 33 Needs improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 27 Needs improvement Qualitative ocial 34 Needs improvement Quantitative ocial 5 Needs substantial improvement 21

22 Centex Corp Comparison with sector averages A A = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core 5 75 A+ ource of points 23% 77% Centex Corp 27 Web Pages and ubmittals ven though Centex Corp. does not have an nvironmental or ocial Responsibility Report, the company s web site does provide some insight into its environmental and social aspects. The website discussed information about Centex s contributions to environmental conservation projects as well as to communities around the company. Also, The Centex Way (found on their web page) provided a discussion about the company s code of conduct. ome factors were left out of The Centex Way, such as quantitative data of any sort, and policies preventing incidents such as child and forced labor from occurring. Overall, more quantitative data need to be provided by the company, socially and environmentally. Discussions about the company s environmental policy or plan are left out as well. This A+, by the way, doesn't reflect particularly good reporting. The PI score connected to it is only a third of the A+ score in our 27 Petroleum Refining ector report. For a discussion of grading on the curve see Director's comments in our 27 Mining, Crude Oil Production ector report. ~ Wilson nvironmental Intent Accountability Needs improvement Policy 3 Needs improvement Vision Needs improvement nvironmental Reporting nergy Needs substantial improvement Management and Misc. 1 Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Management 33 Needs improvement Policy 33 Needs improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 55 Good Qualitative ocial 23 Needs substantial improvement Quantitative ocial 5 Needs substantial improvement 22

23 D.R. Horton Comparison with sector averages A A = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core ource of points 1% F D.R. Horton 27 web pages There is no information provided on the D.R. Horton web site dealing with environmental or social issues. ~ Aleman-Zometa 5 75 nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights Needs substantial improvement Qualitative ocial Needs substantial improvement Quantitative ocial Needs substantial improvement 23

24 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Hovnanian nterprises Comparison with sector averages D ource of points Hovnanian nterprises 27 web pages The Hovnanian nterprises web site briefly discusses equal housing opportunities, employee satisfaction, and employee surveys. It needs more information concerning other social and environmental matters. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Management 17 Needs substantial improvement Policy 17 Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 9 Needs substantial improvement Qualitative ocial 6 Needs substantial improvement Quantitative ocial Needs substantial improvement 24

25 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core KB Home Comparison with sector averages C ource of points KB Home 26 web pages In KB Home's web pages there is only a very brief section overviewing environmental efforts and very little on the social side of reporting. A A 47% 53% ~ Beckstead 5 75 nvironmental Intent Accountability 5 Good Policy 2 Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting nergy 1 Needs substantial improvement Management and Misc. Needs substantial improvement Recycling 29 Needs improvement Waste Needs substantial improvement Water 14 Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision 1 xcellent ocial Reporting Human Rights Needs substantial improvement Qualitative ocial 34 Needs improvement Quantitative ocial Needs substantial improvement

26 Lennar Corp. Comparison with sector averages A A = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core 5 75 ource of points % 1% C- Lennar Corp. 27 web pages Lennar Corp. discusses its contributions to the community through the Lennar Foundation as well as donating a million dollars to a cheritable organization each year since 21. Lennar also requires its employees to volunteer at a foundation and for a year to help it achieve its goals. However, the company does not touch on environmental issues. The benefits to its employees are detailed well but the company does not have a detailed code of ethics for its business. nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 18 Needs substantial improvement Qualitative ocial 17 Needs substantial improvement Quantitative ocial 5 Needs substantial improvement ~ Aleman-Zometa 26

27 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core M.D.C. Holdings, Inc. Comparison with sector averages C- ource of points M.D.C. Holdings, Inc. 27 web pages M.D.C. Holdings lists various places to which it donates and volunteers, however there are no quantitative data that show how much participation there really is. The web pages are lacking any discussion about the environment and social considerations. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Management 17 Needs substantial improvement Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 18 Needs substantial improvement Qualitative ocial 23 Needs substantial improvement Quantitative ocial Needs substantial improvement 27

28 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Meritage Homes Comparison with sector averages C+ ource of points Meritage Homes 27 web pages The Meritage Homes web pages have a formal and detailed report dealing with the business and some social code of ethics. The company does not talk about environmental or other social issues, such as community involvement. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy 33 Needs improvement ocial Demographic 5 Good Vision Needs substantial improvement ocial Reporting Human Rights 45 Needs improvement Qualitative ocial 6 Needs substantial improvement Quantitative ocial Needs substantial improvement 28

29 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core NVR Inc. Comparison with sector averages C- ource of points NVR Inc. 27 web pages There is substantial information about careers with the company, its benefits to employees, and employee testimonials to show their satisfaction, but nothing on sustainability. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Management 33 Needs improvement Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs improvement ocial Reporting Human Rights 18 Needs substantial improvement Qualitative ocial 17 Needs substantial improvement Quantitative ocial Needs substantial improvement 29

30 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Pulte Homes Comparison with sector averages D+ ource of points Pulte Homes 27 web pages Pulte Homes' web pages generally lack information dealing with social and environmental issues. The only information presented deals with employee training and workplace diversity. A % ~ Aleman-Zometa A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Management 33 Needs improvement Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights 18 Needs substantial improvement Qualitative ocial 9 Needs substantial improvement Quantitative ocial Needs substantial improvement 3

31 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Ryland Group Inc Comparison with sector averages F ource of points Ryland Group 26 web pages Ryland's web site is mostly designed to advertise home building in specific geographic areas. There is no environmental reporting and very little social reporting. A A 46% 54% ~ Beckstead 5 75 nvironmental Intent Accountability Needs improvement Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting nergy Needs substantial improvement Management and Misc. Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs improvement ocial Reporting Human Rights Needs substantial improvement Qualitative ocial Needs substantial improvement Quantitative ocial Needs substantial improvement 31

32 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core tandard Pacific Comparison with sector averages C ource of points tandard Pacific 26 web pages While tandard Pacific does provide good, relatively detailed descriptions of its social goals, its site lacks concrete data. For example, it outlines the hiring process but does not mention a nondiscrimination policy. There is no environmental information at all. A A 17% 83% ~ Beckstead 5 75 nvironmental Intent Accountability 5 Good Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting nergy Needs substantial improvement Management and Misc. Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Accountability Needs improvement Policy 33 Needs improvement ocial Demographic Needs substantial improvement Vision Needs improvement ocial Reporting Human Rights 9 Needs substantial improvement Qualitative ocial 34 Needs improvement Quantitative ocial Needs substantial improvement Building Materials Industry Report

33 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core Toll Brothers Comparison with sector averages A A 5 75 ource of points 83% D 17% Toll Brothers 27 web pages Toll Brothers briefly describes its commitment to the environment by its affiliation with a couple of conservation societies. It also has participated in a large number of charitable events, which are detailed well. Besides this, there is a lack of quantitative data and information about materials used and their possible harm to the environment. ~ Aleman-Zometa nvironmental Intent Management Needs improvement Policy 2 Needs substantial improvement Vision 5 Good nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision Needs substantial improvement ocial Reporting Human Rights Needs substantial improvement Qualitative ocial 14 Needs substantial improvement Quantitative ocial 2 Needs substantial improvement 33

34 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core WCI Communities Comparison with sector averages A A ource of points 6% C+ 4% WCI Communities 27 web pages and 24 WCI Report on nvironmental and ocial Responsibility WCI Communities claims to contribute substantially to helping the environment by building affordable sustainable homes. This company does extensive community outreach by volunteering time to clean up sites, work with children, and help build Habitat for Humanity homes. They also contribute money to the education of low income students to give them an opportunity to attend private institutions. ~ Aleman-Zometa 5 75 nvironmental Intent Management Needs improvement Policy 7 Good Vision 5 Good nvironmental Reporting missions to air Needs substantial improvement missions to water Needs substantial improvement nergy 14 Needs substantial improvement Management and Misc. Needs substantial improvement Materials usage Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water 14 Needs substantial improvement ocial Intent Policy Needs substantial improvement ocial Demographic Needs substantial improvement Vision 5 Good ocial Reporting Human Rights 9 Needs substantial improvement Management 1 Needs substantial improvement Qualitative ocial 34 Needs improvement Quantitative ocial Needs substantial improvement 34

35 = Total nvironmental core, A = nvironmental ector Average core, = Total ocial core, A = ocial ector Average core William Lyon Homes Comparison with sector averages C ource of points William Lyon Homes 26 web pages William Lyon Homes provided a bit of social reporting in the form of a code of conduct but it was less than cursory. nvironmentally, there was no reporting at all. A % ~ Cikach A % nvironmental Intent Policy Needs substantial improvement Vision Needs substantial improvement nvironmental Reporting nergy Needs substantial improvement Management and Misc. Needs substantial improvement Recycling Needs substantial improvement Waste Needs substantial improvement Water Needs substantial improvement ocial Intent Policy 5 Good ocial Demographic Needs substantial improvement Vision Needs improvement ocial Reporting Human Rights 27 Needs improvement Qualitative ocial 6 Needs substantial improvement Quantitative ocial Needs substantial improvement 35

36 Claremont McKenna College, a member of the Claremont Colleges, is a highly selective, independent, coeducational, residential, undergraduate liberal arts college with a curricular emphasis on economics, government, and public affairs. The Claremont Colleges The Claremont Colleges form a consortium of five undergraduate liberal arts colleges and two graduate institutions based on the Oxford/Cambridge model. The consortium offers students diverse opportunities and resources typically found only at much larger universities. The consortium members include Claremont McKenna College, Harvey Mudd College, Pitzer College, Pomona College, cripps College, Keck Graduate Institute of Applied Life ciences, and the Claremont Graduate University which includes the Peter F. Drucker and Masatoshi Ito Graduate chool of Management. Contact Information Dr. J. mil Morhardt, Director,, Claremont McKenna College, 9 N. Mills Avenue, Claremont, CA , UA, Phone: , Fax: , emorhardt@cmc.edu