3 minute read[Editor’s Note: While market-rate housing experiences near-term turbulence, leaders in residential real estate and construction face crucial crossroads today that will impact their position and strength when a next recovery finds its footing. We’re looking over the next couple of weeks at pull-forward transformational market forces, such as ESG, and those who’re seizing leadership in stakeholder capitalism as a business opportunity.]
Of the 19 pure-play publicly-traded U.S. homebuilding companies – producers of about two of every five of the nation’s new-construction single-family owner-occupied homes – all save three firms spell out specific, public-facing Environmental, Social, and Governance policy and practice commitment and investments.
This is not to say that the three organizations – Dream Finders Homes, Landsea Homes, and NVR – that don’t profess their positions with dedicated Investor Relations site tabs and annual reports, and disclose measures of ESG progress do not apply their core strategic corporate values, principles, codes of ethics, and cultural practices relatively aligned with ESG goals.
ESG’s fate and future as business and strategic bedrocks are no slam dunk. Just a week ago, the The refrigerator magnet alphabet soup of standards, measures, protocols, disclosure requirements, and accountability – TCFD, SASB. GRI, GHG, UN SDG, etc. – is all in its early innings, which means clarity as to what drives “investability” along these platforms has yet to find firm footing. I don’t know that we have complete visibility on where all of these measures will settle,” says Wilson. “Investors do want to select good companies that are making the right decisions now, and finding ways to make better decisions going forward in how we source more locally, build more efficiently, and make a more positive environmental impact. Even without that visibility, we want to align with those principles because it’s consistent with what our customers tell us they want and will pay for. As the ESG standards get more refined, and there’s more consistency in how companies apply them, like everything else, they’ll be table stakes. If you don’t measure up, you won’t make the consideration set – whether it’s among customers, team members, business partners, investors, etc. Bottom line, we’re shooting for something that comes down to shrinking the impact and increasing the value.” In Kevin Wilson’s view, the ultimate impact of any organization or business sector’s initiatives, investments, and commitments to ESG will owe in part to those enterprises’ actions and the way they speak for themselves. Almost equally important, Wilson asserts, is a company’s capability when it comes to owning the narrative. We’re in the life-changing business, and we’re all making some really good decisions out there, making beautiful homes for families,” says Wilson. “Sometimes we’re not good storytellers inside our companies and among our close business partners and among our investor partners. We’ve got a DNA that’s all about value, and we’re trying to align as leaders with the principles behind ESG, which at base, are about striking a careful, connected balance between pushing the envelope and doing the best we can with our customer’s dollar.”Join the conversation
