Calvert Ranks Top Builders on Environmental and Sustainable Practices; Highest Ranked in Group: KB Home, Pulte, and D.R. Horton

BETHESDA, MD. AND BOSTON, MA….May 6, 2008 Despite some encouraging environmental and energy-efficiency developments in recent years, none of America’s 13 largest publicly traded homebuilders has “fully embraced the emerging market of sustainable building design and construction,” according to a major new study by Calvert—one of the nation’s leaders in the field of sustainable and responsible investing—with support from the Boston College Institute for Responsible Investment.

However, Calvert found that K.B. Home, of Los Angeles, is “clearly leading the homebuilding industry in terms of environmental sustainability,” while four other homebuilders—K. Hovnanian, Red Bank, NJ; MDC Holdings, Denver, CO; Standard Pacific, Irvine CA; and last-place finisher NVR Inc., Reston, VA—are on what the report terms the “sustainability bottom rung.” As the Calvert report explains: “The biggest challenge facing this group is that, for the most part, they have not acknowledged that there is a market for green homes or that they have a role in serving or promoting it.”

For best-to-worst rated, the balance of the top 13 U.S. homebuilders are: tied for #2 D.R. Horton, Fort Worth, TX; and Pulte, Bloomfield Hills, MI; #4 Centex, Dallas, TX; #5 Lennar, Miami, FL; #6 Ryland, Calabasas, CA; #7 Beazer, Atlanta, GA; #8 Meritage, Scottsdale, AZ; and #9 Toll Brothers, Horsham, PA.

Entitled Greener Pastures for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry, the Calvert report concludes: “Our survey of the 13 largest publicly traded U.S. homebuilders finds that, while every major homebuilder has incorporated some environmental and efficiency programs and products into some of their new homes, none has fully embraced the emerging market of sustainable building design and construction. Calvert’s study of the sustainable policies, programs, and performance of the nation’s largest homebuilders revealed that the industry has a long way to go before any of the companies can truly claim to be addressing the risks and opportunities inherent in the environmental and climate change dilemmas.”

Commenting on the report, Stu Dalheim, Director, Shareholder Advocacy, Calvert Group, said: “This is a real and growing issue for homebuyers and for investors. As consumers become more educated about environmental options and green residential construction, and as regulators increase incentives for green development and restrict conventional development efforts, some homebuilders may be at a competitive disadvantage if they have not integrated sustainable design and construction principles into their construction. In the green building market there is a first-mover advantage: Companies that make a concerted national effort to integrate sustainability into project sites, construction materials, and construction processes, as well as to provide energy, water, and habitat conservation options in finished products, will be able to build a brand image as the environmental choice for home construction. This brand will help environmentally conscious consumers make their selection of a homebuilder.”

David Wood, Director, Boston College Institute for Responsible Investment, said: “Calvert’s efforts to identify and benchmark best practices in sustainable homebuilding are a leading indicator of how sustainability is likely to be integrated into investment analysis of the homebuilding sector in coming years.”


  • “Many of the companies had strong regional programs for environmental responsibility. However, while some of these programs have had significant results (Pulte and KB each has built over 15,000 Energy Star homes), the major builders offer few of these environmental options nationwide.”
  • Many publicly traded homebuilders have committed to ambitious goals in energy efficiency, suggesting that major homebuilders’ attitudes towards green building might be changing. In fact, 12 of the 13 largest homebuilders have now committed to building 100% Energy Star homes in certain markets. However, as of the publication of this report, no major homebuilder has publicly committed to environmental responsibility as a core business strategy.
  • NVR Inc., Standard Pacific, MDC Holdings, and K. Hovnanian —the lowest-ranked builders “make virtually no mention of the environment on their Web sites or in other reports and have few programs to mitigate their environmental impacts. Not surprisingly, they lag behind the rest of the field in developing green homes. They are not very involved in the Building America program, are near the bottom in Energy Star, and have not been engaged in other green building efforts. These companies may score lower because they are simply not public with their environmental goals or neglect to report their environmental successes.”

The survey of the 13 largest publicly traded U.S. homebuilders used four major “green” indicators: energy use; building-material use; water use; and land use.

As an investor, Calvert seeks to discern how major U.S. homebuilders compare on policies, programs, and performance relating to the environment and resource efficiency. Despite the slump in the overall housing market, the green building industry is seeing annual growth of as much as 30 percent. Green building features for new homes present a clear opportunity for the homebuilding industry; homeowners are willing to pay a premium for greener and cleaner homes of $18,500 on average, according to a McGraw Hill Constructions 2006 report, Home Preferences of Green HomeBuyers: The Survey Says.


Calvert is a diversified investment management firm with over $15 billion in assets under management. Calvert is a leader in sustainable and responsible investing and manages over $6 billion in sustainable and responsible asset management strategies for institutional and individual investors. The firm’s SRI funds have grown to 21, with the most recent additions being the Calvert Global Alternative Energy Fund (CGAEX) and the Calvert International Opportunities Fund (CIOAX). Over the years, the firm has built a core line-up of mutual funds ranging from equity to fixed income, large-cap to small-cap, and domestic to international. Calvert also runs the Calvert Social Index®, a benchmark for measuring the performance of large, U.S.-based socially responsible companies.

The Institute for Responsible Investment, a project of The Center for Corporate Citizenship at Boston College, works with investors, corporations, public sector organizations, research institutes, and related parties to coordinate thinking and action around issues of strategic importance to long-term wealth creation for shareholders and society. In recent years the IRI has focused on responsible property investing as a key area of concern.

CONTACT: Patrick Mitchell, (703) 276-3266 or [email protected]

Download Greener Pastures for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry

EDITOR’S NOTE: A streaming audio replay of this news event will be available on the Web at as of 7 p.m. EDT on May 6, 2008.