Why ESG for Building?

Lead: Bill Rectanus, Chief Operating Officer, Thrive Home Builders

Investor and stakeholder demand is rapidly increasing the building sector’s adoption of ESG initiatives. ESG adoption has fueled the market shift towards sustainable green building products. Sustainable-minded builders, developers, and manufacturers will have greater access to investment opportunities in comparison to their conventional counterparts. 

This subgroup will develop a compelling business case for the adoption of industry-specific ESG metrics. Investors will be able to better evaluate a company’s ESG status which in turn will unlock a higher investment potential for building professionals.

Lead: CR Herro, CEO, AR Homes

39% of global greenhouse gas emissions can be attributed to the building industry. In response, green building practices and ESG principles are being rapidly adopted to decarbonize the industry and move towards net zero emissions. 

This subgroup will analyze the best practices for sustainable building development and create a list of industry-specific environmental metrics. 

Some key areas of focus include:

• Emission reduction metrics and benchmarks
• Green building practices of landscaping and building design
• Sustainable management of waste, water, and air quality
• Electrification of buildings
• Operational and embodied carbon 
• Biodiversity and habitat loss

Lead: Danielle Younger, Managing Partner, Younger Homes

The building industry prioritizes the safety and well-being of construction workers and building occupants making them uniquely positioned to capitalize on the social aspects of ESG. Current metrics are qualitative and minimize the opportunity for tracking social progress. 

This subgroup will develop a list of quantifiable metrics that emphasizes the connection between the social impact of the built environment and financial performance. 

Some key areas of focus include: 

• Social justice, equity, diversity in housing
• Attainability of housing
• Access to transportation and walkability of neighborhoods
• Physical and mental health of workers and building occupants
• Engagement with surrounding communities.

Lead: Todd Usher, President, Addison Homes

Building professionals and building product manufacturers need to proactively identify governance issues to minimize risk, maintain a positive reputation, and ensure the long-term success of their ESG strategy. The building sector has not set any industry-specific metrics or benchmarks to demonstrate its commitment to major governance issues such as diversifying the workforce.

This subgroup will identify corporate governance issues specific to the building industry and develop a set of benchmarks and metrics to monitor progress. 

Some key areas of focus include:

• Diversification of the industry–board members, laborers, etc.
• Best practices for stakeholder engagement
• Governance policies for risk management and ethical behavior
• Outcome-based metrics demonstrating impact

Measurement 

Leads: Betsy Scott, Executive Director, Programs and Engagement, Housing Innovation Alliance, and Eric Holt, Assistant Professor Franklin L. Burns School of Real Estate and Construction Management, University of Denver

While a diverse set of tools, calculators, and software programs exist to measure various aspects of carbon accounting, the building industry lacks a comprehensive platform that measures the impact of the built environment. Builders do not have a streamlined way to measure emissions and the impact of their projects.

This subgroup plans to analyze existing resources that measure and track carbon emissions and environmental impact, and then create strategic recommendations that building professionals can use to assess the carbon footprint of homes, buildings, and communities. 

Some key areas of focus include:

• Identify key metrics and benchmarks for emissions reduction
• Address the lack of carbon emissions data for new buildings
• Clearly define net zero buildings
• Explore the uncertainty associated with Scope 3 emissions (how to calculate, who’s responsible, etc.)
• Examine existing carbon accounting calculators, software platforms, and tools that building professionals can use to measure emissions from buildings
• Understanding embodied carbon, Life Cycle Assessments (LCAs), and Environmental Product Declarations (EPDs)

Lead: Sara Gutterman, CEO Green Builder Media

As the market shifts towards green building products with the adoption of ESG, building professionals will need to innovate with respect to product specification to differentiate themselves from the competition and maximize their emissions reduction targets.

This subgroup will evaluate innovation in three main areas: products, homes/buildings, and communities/developments, exploring topics such as

• Designing for sustainability
• Decarbonization & carbon neutrality
• Sequestration
• Circularity
• Exploring alternative materials to replace/reduce the use of steel, cement, and other high-impact materials
• Promoting offsite construction
• Rethinking design, construction, zoning, and land use to protect habitats and biodiversity 

Compliance

Lead: George D. Sullivan, Sr. Principal/CEO, Net Zero Analysis & Design Corp. and Celeste Karan, EVP–Public Relations & Marketing, Net Zero Analysis & Design Corp.

ESG has entered the compliance space on a global scale. Governments and other stakeholders have been compelled to recognize the material significance of sustainability data points published by various entities, and as such, are attempting to standardize the reporting of this data into comparable, decision useful information. The goal of the compliance subgroup is to help the housing industry better understand the regulations that are being put into place, how this impacts every aspect of the real estate development process, and how they can prepare to lead in a rapidly changing marketplace.

Lead: Cati O’Keefe, Chief Development Officer, Green Builder Media

As the ESG Working Group develops a building industry-specific framework, it will be paramount to communicate the framework fundamentals to diverse target audiences, including building professionals, manufacturers, investors, consumers, government entities, industry groups, and other stakeholders. This subgroup will develop effective messaging and marketing outreach strategies to disseminate and promote information about the Defining Principles document.