ESG in Housing What we Can Learn from the Largest Builders

00:00:01:02 - 00:00:22:19
Mike Collignon: Everyone you know today is the Ides of March, so beware all those who are familiar with Roman history. You know, the good news is that you have nothing to fear from our guest today, though, she's not only delightful, but Sam Raskin told me that she is someone our audience needs to watch out for because she's taking a leading role in figuring out how to integrate ESG with the housing industry.

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Mike Collignon: Sam also sends his regrets that he was not able to be here with us live today. Now we're going to look at the timely topic of ESG and trends that are emerging in housing, and especially among the large national builders. We will review what ESG is, where it came from, why it came about, who is driving it and who is impacted by it.

00:00:44:25 - 00:01:20:03
Mike Collignon: We'll also look at the ESG disclosures that large national builders are reporting and share what we can all learn to prepare for a sustainable future. Now to tell you a little bit about our guest today. Her name is Stephanie Coleman. She started her career in construction in 2005 as a self-employed renovation contractor. Now, over the years, she has completed numerous building science training courses and earned a number of certifications including Certified Energy Advisor, HRA, Residential Air Systems Design Technician, a Thermal Radon Measurement and Mitigation.

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Mike Collignon: Now, she's currently completing her master's degree of environment and Business at the University of Waterloo. She works for Doug Terry Homes, and before that she served as marketing and business development manager for Building Knowledge Canada, which is a leading building science consulting firm. Now, she's always been a strong advocate and volunteer for the homebuilding industry. She served on numerous committees at the local, provincial and national levels of the association.

00:01:46:23 - 00:02:15:03
Mike Collignon: She served on the Canadian Home Builders Association executive from 2015 to 2021, and she was the CHP national president in 2019 to 2020. She was also a founding member of the CBA's Net Zero Council's Management Committee, and she has served in the Building Code Conservation Advisory Council for the Ministry of Municipal Affairs and Housing, and she was honored to be the recipient of the Inner Quality Leader of the Year Award in 2019.

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Mike Collignon: And just to give you a little glimpse into Doug Terry Homes, for those of you who may not be familiar, they are looking so much at sustainability that it's not even about low VOC paint. They're looking at things like no VOC paint, and Stephanie may touch on that later, but I don't want to take away her words. I do have other words to say, and that is to say that we have sponsors that we need to recognize in.

00:02:39:09 - 00:03:04:05
Mike Collignon: The first is Mitsubishi Electric. Mitsubishi Electric promote sustainable building through the electrification of residential and commercial heating and cooling products. Their mission is to advance technologies to reduce waste output, promote sustainable resource cycles while increasing energy efficiency, and eliminating dependance on fossil fuels. Next, we have to. They are a leading national residential, solar and energy storage provider for the specialized team dedicated to the home building industry.

00:03:04:06 - 00:03:25:14
Mike Collignon: Their experience in the new home sector means they understand the complexities of home building, and offer customized solutions to help you build homes that home buyers actually want. All while staying on schedule with over 50 homebuilder partners across the country. Sonoma was founded to deliver customers a better energy service at a better price through their solar and solar plus energy storage service offerings.

00:03:25:15 - 00:03:52:21
Mike Collignon: They are disrupting the traditional energy landscape and the way that the 21st century customer generates and consumes electricity. We also have Schneider Electric, who is driving the digital transformation of modern homes with smart and sustainable energy solutions for ultimate comfort and energy efficiency. Their connected home ecosystem of smart energy management solutions provides digital control of an energy use throughout a home from the grid via their smart electrical panel to their connected wiring devices.

00:03:52:25 - 00:04:14:00
Mike Collignon: This grid to plug solution makes it significantly easier to create smart solar power and backup power ready homes, both now and in the future. We can't forget about Panasonic Healthy Indoor Living Solutions. They're helping builders across the country differentiate themselves. The powerful, code compliant and cost effective indoor air quality solutions that provide a safer environment for home buyers.

00:04:14:03 - 00:04:44:05
Mike Collignon: Genco solar is a leading PV module manufacturer and energy storage system integrator. The company has deployed more than 100GW of their Eagle modules in 160 countries globally, including more than 17GW right here in the United States. Eagle storage brings together the best energy storage technology for turnkey hardware and energy storage services. Eagle is a trusted choice for US solar and storage projects, and we also want to say thank you to LP Building Solutions, L.P..

00:04:44:05 - 00:05:13:28
Mike Collignon: Building solutions is committed to building a better world by empowering builders to choose resilient, sustainable and efficient building materials to construct the structures, families and individuals live, work and play in every day. Through a diverse portfolio of resilient structural solutions and beautiful, durable siding products all made with 100% sustainably sourced wood fiber. LP is able to provide real solutions that address many environmental issues builders and homeowners face today for LP.

00:05:14:00 - 00:05:36:13
Mike Collignon: Building a better world means manufacturing environmental, responsible, environmentally responsible solutions so we can all build better together. All right, now, during the course of today's presentation, you can submit questions for Stephanie. Simply use that questions box that's over there inside the go to webinar control panel. And believe it or not, we're going to take those questions as we proceed throughout her presentation.

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Mike Collignon: So Stephanie, welcome to the webinar series.

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Stefanie Coleman: Thank you so much, Mike. And also a big thank you to Sam for the invitation to speak to you today about ESG and how fantastic all of those sponsors that you have many names that I recognize and and appreciate. And, you know, as we go through the ESG conversation, you'll see it's a it's a pretty big conversation. And and we need a team of people basically a village to to move forward on this.

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Stefanie Coleman: So I'm going to be talking about ESG and housing and what we can learn from the largest builders. So first, we'll go over a brief history of ESG, why it's important. And then I'm going to move into ESG trends and the ten public homebuilders what actions that they're taking. And then I'll wrap up at the end with some action steps that you as builders can take.

00:06:25:10 - 00:06:43:23
Stefanie Coleman: So first, just to set context to make sure that we're all like know that we're we're speaking the same language, so to speak. I wanted to define what I mean by the term sustainability. So imagine if you have a stool and that stool has three legs on it. Each of those legs are kind of important I would think.

00:06:43:25 - 00:07:06:27
Stefanie Coleman: Right. If you make one leg shorter, you know, cut one off, whatever, that stool is no longer going to be very stable and not very useful. Well, sustainability is very similar to that three legged stool. If you were to take all of the things on earth and sort of call them down to the lowest common denominator, we have three core pillars or three legs of this sustainability stool.

00:07:07:02 - 00:07:31:27
Stefanie Coleman: One is the environment. So it's anything to do with our planet, you know, bugs, animals, ecosystems, all of that to do with the environment and our planet. Then there's everything to do with people and social issues. And then the third leg of the stool is the economy or profit or business. You know, what's driving from the financial perspective or an economic perspective?

00:07:31:27 - 00:07:56:20
Stefanie Coleman: So if you were to focus only on any one of those at the expense of one or the other ones, you can imagine that we would no longer be sustainable. So, for example, if we were to only focus on people at the expense of the economy or the environment, perhaps, you know, the environment would would suffer from that which would then impact the economy and also people.

00:07:56:20 - 00:08:20:12
Stefanie Coleman: So that's what I mean by sustainability being this like three leg stool, each one of these pillars are critical and important. And when we're talking about sustainability, what we're looking for is that balance or the maintenance of these three in harmony. Now stepping back in time, and I'm only going back to 1987, although there were some sustainable work that that happened that predated 1987.

00:08:20:16 - 00:08:51:28
Stefanie Coleman: But in 87, the UN published what's called the report or Our Common Future and Grow Harlem. Brundtland was a person that had was commissioned to complete that report, and she defined the term sustainable development. And so that's sort of the early, you know, a genesis of this whole concept of sustainability. And then the United Nations, every ten years or so had these big conferences, and now every year they're having what are called Cop or conference of the parties.

00:08:51:28 - 00:09:23:26
Stefanie Coleman: You probably heard Cop 25, Cop 26. And so that's essentially what has been moving forward. And within this sustainability and the concept of sustainability has advanced. And ESG came about in and around 2005 or so through the through this work with the United Nations, but really driven by the financial industry and the United Nations Principles for Responsible Investment, where they came up with ESG in 2015.

00:09:23:27 - 00:09:49:03
Stefanie Coleman: That was when the Paris Agreement was signed, and I'll touch on that in a minute. But then also the 17th Sustainable Development Goals were introduced, and you'll see those colorful boxes on your screen there. Those are 17 goals that have been developed as kind of global goals. And really if you look at them, they all sort of fill in or fit into one of the three pillars of sustainability.

00:09:49:08 - 00:10:16:01
Stefanie Coleman: So some examples I don't know if you can read it there, but it's like no poverty, reduced inequalities, climate action, those sorts of things. So that's sort of a brief, really brief high level history of of sustainability. And when ESG was introduced, the acronym ESG. And the way I'm using it is environmental, social and governance. This is the terminology that has been widely used.

00:10:16:01 - 00:10:39:02
Stefanie Coleman: Some other people may use ecological or made, you know, sub out some of the words. But environmental, social and governance, which is really driven by the finance industry is, is how I'm using it for this presentation. So let's high level let's look at the environment. So the type of topics that are coming up in my research with, with ESG is climate change.

00:10:39:03 - 00:11:09:06
Stefanie Coleman: Obviously, biodiversity is another one that is becoming very actively looked at because nobody has financially quantified the impact of biodiversity loss. So I was speaking with a banker not that long ago who looks into this type of topic in one of our big five financial banks here in Canada. And he was saying that they first were looking at carbon emissions, then they were looking at water conservation, and now they're looking at the financial impacts of biodiversity loss.

00:11:09:06 - 00:11:42:22
Stefanie Coleman: So that is another big one. Research and innovation of course, as it relates to climate change, waste reduction and the terms mitigation and adaptation, which will come up in just a minute. But other things like where we're building so in floodplains, that sort of things, we're in drought prone areas. These are the types of topics that have been percolating to the top on the east side of, of the ESG, on the S or the social side, health and safety like in a business, your career advancement.

00:11:42:22 - 00:12:09:21
Stefanie Coleman: So encouraging staff members to be able to move forward in their career. Employee engagement. Community engagement. What are we doing in our business and in our communities to enrich the lives of those in our communities? And another one that's really coming to the fore is diversity, so specifically gender and ethnicity. But even age as diversity within our workforce and also within reporting.

00:12:09:21 - 00:12:37:06
Stefanie Coleman: And so that would be some of the issues for the F in and G. And then on the governance side, environmental risks. So this is where kind of the and the s gets looped in together through governance or business governance. So environmental risks and strategy so physical and transitional. So I'll talk about that in a little bit. Ethics policies codes of conduct stakeholder engagement.

00:12:37:06 - 00:13:07:06
Stefanie Coleman: And when we're talking about stakeholders what we're talking about is anybody that is impacted by your business being in business. So for example, it could be anything from your employees to your sub trades to community members, stakeholders or anybody that's impacted essentially by your business being impacted being in business. So ESG and accountability and oversight by boards of directors is another thing that's going to the top.

00:13:07:06 - 00:13:36:27
Stefanie Coleman: And then also diversity in leadership. So diversity you know of gender ethnicity particularly being that being the key ones. But those are some of the key topics that are coming up under G. Now why is this important. So one thing that I will say is I'm going to spend most of my time talking about the environment and the climate related things, because that's where I've been focusing my my research, particularly around finance.

00:13:36:29 - 00:14:05:15
Stefanie Coleman: So I will talk about some other things, but that's kind of my core topic. So the reason ESG is important is because we are beginning to see climate change. We are beginning to see catastrophic loss. And there's environmental risks. The finance industry is very concerned about the impacts of climate change on the economic stability. And there's the potential of economic instability because of climate change.

00:14:05:15 - 00:14:27:23
Stefanie Coleman: And so the the finance industry is the one that approached the Securities Exchange Commission asking for mandatory reporting. And so I'll talk about that in a little bit. But so there's all these sort of issues that are coming up and which is why this is important. So I just wanted to flash through a few pictures for you. We all remember Hurricane Ian that went through Florida back in September.

00:14:27:23 - 00:14:51:27
Stefanie Coleman: So little under a year ago, 50 to $65 billion in insured damages. There were many properties that were not insured. So that was the insured damages. I showed this picture because, well, it seems to evoke emotions in people. That's a over $1 million car sitting on top of, I don't know, a toilet or something like that. That happened during Hurricane Ian.

00:14:51:28 - 00:15:19:06
Stefanie Coleman: So you can imagine insurance companies are starting to pay attention. We had in Ontario and Quebec. It came up through the northern US and into into Canada, where I'm located, called a direct show. Now, this was last May. I've never heard of a derecho before, but basically it's a very high wind event, $1 billion in damage and 11 people were killed.

00:15:19:06 - 00:15:42:01
Stefanie Coleman: It happened instantly. In fact, a family member was sitting on their back deck and they said, I need to go inside. It blew in, blew a tree down that landed on the deck. And they were very lucky to be not injured and be one of the casualties in that storm. Very sudden, very dangerous in Canada. I'll show you a few Canadians.

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Stefanie Coleman: Sorry, was there somebody that was.

00:15:44:07 - 00:16:11:10
Mike Collignon: Yes, I had a question come in. And so we were going to take them during. Yeah. So Vernier wanted to know how do you see the loss in biodiversity impact, climate change and if they're interlinked or if they're even driving each other, which would take precedence in attempting to create a more livable world?

00:16:11:12 - 00:16:35:01
Stefanie Coleman: That's a great question. I have not researched it in great depth, like the biodiversity side of things. So I'd have to get back to you with a more specific answer. But I do think that they are interlinked. I just don't have the specific information for you today. But I do think that there are impacts and interlinked there and there is an economic impact.

00:16:35:01 - 00:17:01:10
Stefanie Coleman: So for example, you know, if we disrupt the, like the food chain, for example, we're seeing bees in a loss of bees, which then can impact crops, which then can impact food, right? Which then can impact social, social issues and food security with people. So there can be different impacts that that interplay. But I'll have to get back to you with more specific information.

00:17:01:12 - 00:17:02:18
Mike Collignon: Okay. Thank you.

00:17:02:22 - 00:17:27:11
Stefanie Coleman: Yeah. Thanks. A great question though. Thank you for asking that. Okay. So Canada. So I'll just show you a few slides. So in Canada in BC back in 2021, we had wildfires. In the same year we had floods in the same province. This year we've had a drought. This past year we had a drought which dried up streams and millions of salmon perished in the process.

00:17:27:11 - 00:17:52:14
Stefanie Coleman: With that, I found these pictures on NOAA's website or this picture on NOAA's website, and they were talking about the amount of damages in the US for last year alone. There were $18 billion climate disasters driven by weather in climate change. 18 so you see that there were everything from drought and heat waves to flooding, hail, hurricanes, severe weather.

00:17:52:14 - 00:18:27:05
Stefanie Coleman: You see it right across the top there, tornado outbreak, wildfire, etc.. So again, you know, here we've got I found this bit of information that showed that in last year in the US, 98 billion, almost $99 billion in insured losses within the US for natural catastrophes due to climate change. So the finance industry is paying attention and the insurance industry is paying attention because they're very concerned about economic loss.

00:18:27:07 - 00:18:51:24
Stefanie Coleman: So who gets hurt in all of this? It's the communities that we live in, and it's our residents and our people that that get hit. And this includes our businesses. And so it has a global impact. It has a regional impact as well, where the storm hits. So I'm going to touch on carbon emissions because that is sort of the driver of climate change.

00:18:51:27 - 00:19:19:19
Stefanie Coleman: And and go into a little bit of detail with that. So as I mentioned, you know, on the United Nations slide over history, 196 countries signed on to the Paris Agreement, and the Paris Agreement was aiming for us to not exceed two degrees, ideally well below two degrees Celsius of global warming. Right now, we're at about 1.1 degree of global warming.

00:19:19:19 - 00:19:47:12
Stefanie Coleman: And you can see, you know, from from the images that I showed, the the damage that has occurred from 1.1, we ideally would like to not exceed 1.5°C. And so that has been the big push for 2030 to reduce our emissions, to try not to exceed 1.5°C. But you can imagine we're already at 1.1, and we've seen an escalation in climate impacts getting to 1.5.

00:19:47:12 - 00:20:19:28
Stefanie Coleman: We can expect that we will see more just, you know, using common sense, but also the scientific data that are showing projections at one and a half degrees, two degrees, three, four, etc.. So to stay within 1.5°C, the UN secretary general, Antonio Gutierrez, had said back in 2020. And you'll see in that little red box below that, for us to not exceed 1.5°C of warming, we need to cut our emissions in half in the next seven years.

00:20:20:00 - 00:20:48:15
Stefanie Coleman: Now that's a monumental task. And so to put in perspective, I live in a net zero ready home and I have solar on my home. It is a hybrid home, so it has a natural gas backup furnace and also natural gas, hot water. And my car is gas is a gas car. So if I were to cut my emissions in half, right.

00:20:48:18 - 00:21:09:01
Stefanie Coleman: I'm going to have to get rid of some of those items, which is very expensive. And and this is in, you know, a very advanced home being net zero ready. Other homes, you know, that are older or people, you know, with just different situations, however their homes are heated and that sort of thing. You know, this can be a very, very challenging task to do in the next seven years and very expensive.

00:21:09:01 - 00:21:41:16
Stefanie Coleman: So I know in Canada the government has put in a significant amount of money and I think in the US to try to help people to reduce their carbon emissions, but, you know, in half in the next seven years is a really tall order. And so it, you know, requires all hands on deck, if you will. 130 countries have pledged to reach net zero emissions by 2050, with China, Russia and India giving a little bit later timelines of 2060 and 2070.

00:21:41:18 - 00:22:19:15
Stefanie Coleman: But in the States and in Canada specifically, we have committed to net. The US has committed to net GHG emissions by 50 to 52% by 2030. So the next seven years and net zero by 2050. And and Canada has said something similar. Our percentages are a little bit lower by 2030 and net zero by 2050. What Canada has also done, which I don't believe the US has done yet, that I'm aware of, although if somebody could chime in and let me know, that would be awesome.

00:22:19:17 - 00:22:51:11
Stefanie Coleman: We have implemented a carbon tax in federal. And so in April, so last April, the dollar of it was $50 per tonne of CO2 equivalent, going up in increments to 2030 all the way to $170 a tonne in CO2 equivalent. So by 2030, our carbon tax will be $170 a tonne. And where it's currently hitting us is at the gas pump and also on our natural gas utility bill.

00:22:51:14 - 00:23:16:28
Stefanie Coleman: So heating our homes and our hot water, however, we're using natural gas and then the gasoline for our cars and fuel for our cars. That's where it's currently hitting us. We have not instituted a carbon tax on business yet. However, we're you know what? It will remain to be seen, I guess. What what the outcome will be on that.

00:23:17:01 - 00:23:40:16
Stefanie Coleman: Okay, so what we're seeing then is companies are also joining governments and saying, yes, we are going to commit to net zero by 2050. And so here's just a sampling of some well-known companies that have been giving GT reduction commitment. And of course this is just some of many that have gone out in public on their on their commitment.

00:23:40:18 - 00:24:12:14
Stefanie Coleman: So as it relates to climate change, it's really coming down to there's two sort of streams of thought and two sort of action plans that are, that are beginning to percolate to the top. One is mitigation. And so mitigation is defined essentially as stop doing what we're doing to make the problem bad. So reduce our carbon emissions, stop, you know, wasting materials and wasting water and manage our natural resources.

00:24:12:14 - 00:24:43:01
Stefanie Coleman: So mitigate or stop doing damage number one and then adapt. As I said we're at 1.1 degrees C. We're going to hit one and a half degrees C we're already seeing extreme events we need to prepare for through resilient measures through adaptation measures. So mitigate stop doing the damage and adapt because we're going to have to be resilient in the face of climate change and extreme events that will hit us.

00:24:43:03 - 00:24:54:01
Stefanie Coleman: So now move on to ESG trends. Now my my camera disappeared. So, Mike, I don't see you pop on. So did we have any other questions or can I should I move on?

00:24:54:04 - 00:24:56:25
Mike Collignon: No. We're doing good so far, so you can keep on going.

00:24:57:03 - 00:25:28:02
Stefanie Coleman: Awesome. Thank you so much. Okay. So ESG trends in the top ten public builders. So the first thing we're going to say is ESG is under construction. And what I mean by that is even though, you know, we've been talking about this since, what, 2005, 2006 when it was introduced. It is quickly evolving and changing. And so we're seeing actions that are moving forward, forward with this.

00:25:28:03 - 00:25:48:27
Stefanie Coleman: We're seeing a lot of movement within ESG and ESG reporting, a lot of changing, a lot of regrouping and a lot of sort of chaos, I guess, if you will. So ESG is under construction. And I would say, therefore, even this presentation, what I, what I'm sharing with you is the information I have today, but that can change over time.

00:25:49:00 - 00:26:08:17
Stefanie Coleman: The other thing that I was going to say to you is the information that I'm going to share with you is completely I found it online. I don't have any inside information or behind the scenes information. I have only found this online. So the good thing about that is, you know, there's a lot of information and I've put that together for you.

00:26:08:17 - 00:26:31:01
Stefanie Coleman: But the the bad thing about that is I can only determine what I see based on what I see which is online. So what you may find is, I can only present what I found online, but what's happening in the field may be different than how it's presented online, if that makes sense, or how it's presented in reports.

00:26:31:01 - 00:27:04:22
Stefanie Coleman: So, this is all the information I'm sharing with you is readily available. You can find it as well through builder reports that are that are currently available. The top ten builders. I've focused on public builders because all of their reports are available like I just mentioned. And so these are the top ten. So we thought Dear Horton being the largest as far as number of units at Lennar, Pulte and BR, Taylor Morrison, KB homes, Meritage, Century Communities, Toll Brothers and then LG.

00:27:04:28 - 00:27:27:03
Stefanie Coleman: So those are the top ten. I know there's one other builder that's larger Clayton, but their private, so that's why I did not include them into the the top ten. So what I'll do first is talk about the SEC's proposed regulations. Now I'm keeping this information really high. I don't have all the the nitty gritty into it.

00:27:27:03 - 00:27:52:07
Stefanie Coleman: And I've got a lot of information to cover. But I'm introducing the, the the concept of what's been introduced, what has been introduced by the SEC, the Securities Exchange Commission. So they in May of last year have proposed I've put the numbers in there some rules around ESG reporting. And interestingly, at the same time, so did the Canadian Securities Administration.

00:27:52:07 - 00:28:20:04
Stefanie Coleman: So that's our securities exchange. And then our Office of Financial Institution, our office of the Superintendent of Financial institutions that regulate banks and finance. And so they both introduced this ESG reporting guidelines, I guess you could say or instruments. And we're still waiting to hear back on what the outcome will ultimately be. It was supposed to be released at the end of last year.

00:28:20:06 - 00:28:56:09
Stefanie Coleman: It's now been pushed. And so I'm just waiting to find out the outcome. But I did count up the there's kind of a short list, if you will, of the number of public comments that came in on the securities exchange site. And you can actually go in and read all the different comments. It's it's quite interesting. But there's in total it was 11 over 11,000 public comments and I counted up the ones that were pro and con, and there was 83% were in favor of the regulations, and the other 17% were not in favor.

00:28:56:11 - 00:29:37:13
Stefanie Coleman: In favor was really driven by finance and insurance investors like retirement pension funds, you know, those sorts of of groups that were very much in favor and even some public citizens that were concerned. The 17% was a mix of people in the farming and agriculture, oil and gas, and then some that seem to be tied with maybe some political affiliation, where the 17 that were not in favor of the of the regulations, the proposed regulations.

00:29:37:16 - 00:30:11:27
Stefanie Coleman: So just really high level basically the finance industry approached the SEC and said, we we think climate change has a material impact on our investment. Therefore, we think it needs to be included as because the SEC is is their mandate is to ensure that businesses are public. Businesses are reporting on material issues that will impact investors. The states back to like the 1920s in the in the whole financial collapse.

00:30:11:29 - 00:30:37:20
Stefanie Coleman: So they've determined that climate change is a material impact and therefore it should be regulated and reported on. And so climate risk. So the physical risks that a company may have and again this is for public business. But what are the physical risks? I build a bunch of homes a big derecho blows through blows the homes down. There's a financial loss tied to that.

00:30:37:20 - 00:31:09:00
Stefanie Coleman: That's a physical risk. That's an example of a physical risk. A transitional risk is more of a it's slightly different. So it's more like because of climate change, there is new regulations around resilience measures. There is a cost to that. That would be like a transitional risk or a carbon tax is introduced. That's like a transitional risk. It has a financial implications for the business and therefore you should be identifying those.

00:31:09:00 - 00:31:36:18
Stefanie Coleman: And as you see in the third point, what are the risks? What is our strategy and our implementation plan. So this is being asked for additionally GHG emissions disclosures. So your scope one, two and potentially three if it's material is one of those required disclosures that that is part of this proposed ruling. And then also another one is carbon targets.

00:31:36:18 - 00:32:02:11
Stefanie Coleman: So if you say I'm going to be net zero by 2050, in my operations or whatever it is, you need to show proof of how you're going to achieve that, not just say it. So some have tagged this as like anti greenwashing regulations you know. So this is the sort of intent here is to provide investors with material information based on climate risks essentially.

00:32:02:14 - 00:32:38:16
Stefanie Coleman: And so these rulings, these rules do mention the GHG protocol which I'll talk about in a second. And then also the task force on climate related financial disclosure. So they do reference them in the in the documentation. So I'll talk about those. Now when we move on to ESG standards and frameworks. So imagine, you know, all those things that I just talked about environmental risks, whether they're physical or transitional carbon accounting.

00:32:38:18 - 00:33:03:12
Stefanie Coleman: You know, all of these different things that are being asked for there. There's a lot of moving parts within that and a lot of nuance within that. And so what has come about even before, you know, the whole SEC rulings and that sort of thing, what has come up before is are these voluntary frameworks and standards for sustainability reporting within businesses.

00:33:03:12 - 00:33:29:22
Stefanie Coleman: And some businesses have been sustainability reporting for many, many years. It used to be called corporate social responsibility and that sort of thing. And so these a number of different groups and entities popped up and created standards that were kind of suitable to their particular group. But now what's happening is there's this escalation, like a snowballing effect of interest around this particular subject.

00:33:29:22 - 00:33:51:21
Stefanie Coleman: And so what we're seeing is all of these groups, which have been affectionately called the alphabet soup, of which what I'm showing on the screen is only just some. There are way more than this. But what what's happening is they're all starting to kind of merge together and work together because it's too fragmented to have so many different standards.

00:33:51:23 - 00:34:15:24
Stefanie Coleman: And, you know, companies wouldn't know where to even begin. So now what's happening right now is a lot of movement. And I said ESG is under construction. This is what I'm talking about. We've got like Sasb, the Sustainable Accounting Standards Board is one particular standard task force. And climate related financial disclosures is a framework. The Global Reporting Initiative is another standard.

00:34:15:25 - 00:34:41:03
Stefanie Coleman: So it's like which one do I pick. Right. And so investors and other entities, they could say, well I want you to provide Sasb or CFD. So it was very fragmented. These groups are all beginning to sort of pull together. And the most popular or widely adopted ones are beginning to percolate to the top. So of course more will come over time.

00:34:41:03 - 00:35:19:09
Stefanie Coleman: But I just wanted to kind of introduce you to these frameworks and standards. So the if you're familiar with GAAP, GAAP for financial accounting in the United States. Well, the US has their version, but there's also an international financial reporting standard that a number of countries use as their standard, of which even Canada. References. The IFS. Well, that Financial Accounting Board developed an International Sustainability Standards Board, of which sasb you'll see.

00:35:19:09 - 00:35:34:00
Stefanie Coleman: The Sustainable Accounting Standards Board is part of that now. And this group is working with TFD and GRI to try to bring alignment so that people don't have to.

00:35:34:03 - 00:36:05:10
Stefanie Coleman: Lose their minds, if you will, trying to gather data and report on a million different, different frameworks and standards. But that the the information there's there's there's some overlap and some similarities. So trying to uniform all of this so that it's easier for business and it's not incredibly onerous. So that's the disclosure frameworks and the standards. So Sasb is the audience is for the financial industry.

00:36:05:10 - 00:36:30:02
Stefanie Coleman: So they're the ones that would be using this information. So investors lenders it focuses on the the and the g issues. And it also has a specific standard that is specifically for the home building industry. And so I'll show you that in a little bit. TCF D is again is for the finance audience investors and lenders and financial institutions.

00:36:30:07 - 00:36:55:13
Stefanie Coleman: But it only focuses on environment and governance. So it's the environmental impacts of your risks and your strategies and opportunities in your carbon emissions, and how you're dealing with that from a governance perspective in your business, so that they can so that you can report on what you're doing to address climate change, to make sure that your business is resilient and a safe investment, basically.

00:36:55:16 - 00:37:33:02
Stefanie Coleman: Now, this TFD is a framework. So it's not an actual specific standard, but it's a framework and it gives you principles based guidelines on what they're looking for. Sort of questions that you can answer. GRI is a another A standard. So it gives you actually a like a specific guidelines on exactly what to report. And they are currently they will be developing construction has been identified construction and also construction materials have been identified as two of the 40 specific industries that they are developing industry specific standards for.

00:37:33:03 - 00:37:55:08
Stefanie Coleman: It's just not done yet. Gray focuses on environment, social and governance. So the S and G and the audience is really anyone. The UN Sustainable Development Goals again, this is a framework and it's guidelines. And so it's it's more relaxed. Companies will read the list of guidelines like the information and they'll say oh yeah this item does that.

00:37:55:08 - 00:38:25:22
Stefanie Coleman: So I'm supporting that particular goal. So it's more relaxed but nonetheless is a nice way to communicate to anyone what you're doing to align with the sustainable goals. And then the greenhouse gas protocol is a standard. And what that is, is it's a methodology for GHG or carbon accounting. So it's it walks you through the steps of how to calculate your carbon emissions.

00:38:25:24 - 00:38:54:17
Stefanie Coleman: So basically, you know how I mentioned that there's that international body that has developed a sustainability board under it, essentially the way this is moving with regulation and whatnot, and where I think this is going to land is that ESG reporting and carbon accounting will be handled very similarly to how financial reporting is with the same level of rigor and attention to detail.

00:38:54:18 - 00:39:21:25
Stefanie Coleman: And so you can see the accounting rules for carbon emissions below relevance, completeness, consistency, transparency, accuracy. You know, those are all the same sort of principles that that you have with financial accounting. And so I do believe that ESG type reporting will end up very similar to financial accounting, because the finance industry is looking for accuracy but also comparability.

00:39:21:25 - 00:39:52:24
Stefanie Coleman: So they can compare your business to another business. And that's why these frameworks and standards are helpful to create that sort of alignment and comparability. And it gives us a basis for which to have valid information and data to to make decisions on. And so again, you know, just some more companies that are ESG disclosing, developing ESG reports, you know, reporting on the different frameworks and that sort of thing.

00:39:52:26 - 00:40:15:17
Stefanie Coleman: So I wanted to show you, I looked through the top ten builders to see which frameworks and standards they were reporting on. And now you'll notice that I've got different years besides. So dear Horton, Lennar, and NVR 2022. That's because they've released their most recent report for 2022. The other ones, I anticipate they'll be coming out in the next little while.

00:40:15:17 - 00:40:43:17
Stefanie Coleman: So the only reports that are available right now are their 2021 reports. So you'll see that eight of the ten builders have now disclosed on Sasb. So the metrics that Sasb has defined within their standard, they've reported on at least some of those metrics. Four of the builders have reported on the green standard, and Meritage is the only one that has actually reported on the TCF.

00:40:43:20 - 00:41:17:24
Stefanie Coleman: And I'll show you that in a little bit. And you'll see five have compared their actions with the UN 17 Sustainable Development Goals. Those colorful boxes I showed you, five builders have aligned their actions with those sustainable development goals in their reporting. So now I'll talk about sustainability reporting separate from the standards. So I originally I talked to you about those frameworks and standards, which is sort of their own sort of detailed lists of what to report.

00:41:17:24 - 00:41:46:07
Stefanie Coleman: But then there's just corporate reporting and sustainability report reporting from the corporation itself. And so what I've noticed, and this is really, really cool, is most of the top ten builders have an official report or something very close to to an official report with one that has the, I guess, the least developed report. Now this slide shows you the progress.

00:41:46:07 - 00:42:15:27
Stefanie Coleman: So I dated it back to 2008 because Katy Home first started their ESG sustainability reporting in 2008 and have and have published a report every single year since then. And but you'll notice the arrows represent when builders. So I went back in time, looked on the websites to find out when builders produce sustainability reports. And so the arrows represent the years that they that they presented.

00:42:15:27 - 00:42:41:09
Stefanie Coleman: So you'll notice Meritage 2012 2013. They reported they they produced a report a couple of years and then they did it for a number of years. They came back to it in 2018, and then they stopped and then they came back to it in 2021. So you'll see, when I first started tracking these builders, it was in 2020, and only a couple of them had any sort of sustainability reports that were current.

00:42:41:09 - 00:43:17:02
Stefanie Coleman: And now you'll see almost all of them do. They did last year and I anticipate all of them will again this year. So you'll see that there's clearly something happening in the ESG and sustainability reporting space that is impacting the public builders to do this, to do these reports. Now, the type of topics that I found as I was going through the reports and not all builders report on all of these subject matters, but these are sort of themes, if you will, that I found.

00:43:17:03 - 00:43:50:18
Stefanie Coleman: So under the environment column, Carbon Accounting. And I'll show that in a minute. Her scores is another one which is also part of the Sasb requirement for the Sasb standard for for reporting land, water and biodiversity are some other issues that have that have been reported on under social diversity, equity and inclusion, a lot about community engagement. So doing some great work in the community, health and safety.

00:43:50:18 - 00:44:24:10
Stefanie Coleman: So job site health and safety is another one as well as housing affordability came up with few times with some of the builders under governance. I saw stakeholder engagement, the risk management and strategy like we talked about and then materiality index. So materiality index is basically builders working with their stakeholders to determine what items are material that they should be reporting on, but also taking action on.

00:44:24:10 - 00:44:49:05
Stefanie Coleman: So those items that are important to their stakeholders. So let's dig a little bit deeper. So on the environment side, the World Green Building Council has identified buildings as representing about 39% of global energy related carbon emissions. So about 28% of that is operational emissions and 11% is what we call embodied. And so 28% of the operational emissions.

00:44:49:05 - 00:45:16:28
Stefanie Coleman: So those are the emissions that are generated in this case in the homes that we build. You know, when the homeowner is taken occupancy of it and say, if we put a gas furnace in or gas fireplace, gas stove, that sort of thing, those emissions that are generated from that and then the 11% or the embodied carbon or the emissions that were generated during the manufacturing of the materials that we built the homes with.

00:45:16:28 - 00:45:47:23
Stefanie Coleman: And then it looks like this 11% also includes and the transportation and the construction. So the actual building of the of the home as well, or the buildings as well. So obviously buildings are material. They are a very significant driver of energy efficiency of, of carbon emissions. And, and therefore we need to pay attention to that impact. So I wanted to show you the the greenhouse gas protocol.

00:45:47:23 - 00:46:13:02
Stefanie Coleman: So I mentioned earlier this is a standard that defines how to calculate carbon emissions. And so this is how we are looking at emissions. So what they've done is they have taken this through the lens of a company. So you'll see at the bottom in the blue it says reporting company. So through a company a company will have scope one two and three emissions.

00:46:13:04 - 00:46:40:28
Stefanie Coleman: So scope one and two are basically your business operations. Scope one is called a direct emission. And so that is I've got an office I'll use a pic. Pick an analogy like I've got an office. It has a furnace that is fired by natural gas. I have a fleet of ten pickup trucks that are gas, for example, or diesel.

00:46:41:01 - 00:47:09:11
Stefanie Coleman: Those emissions that are generated within my business over the course of whatever the time frame you pick, usually it's one year, that are from natural light, that are from fossil fuels. Those are scope one direct emissions. So what my business did with fossil fuels, the emissions that were generated, scope one. Scope two, the emissions that are generated from offsite facilities that that provide some sort of an energy source, electricity being kind of the most common one.

00:47:09:11 - 00:47:37:10
Stefanie Coleman: So if, say, your electricity is provided through nuclear, then your emissions are going to be lower than if it was a fire through coal. Right? So the electricity, the emissions that are generated from the electricity that you use or if you have steam heat, there some other things that fall into scope two, but it's primarily electricity. Those emissions fall into scope two for your business.

00:47:37:10 - 00:48:02:29
Stefanie Coleman: So it's basically your business operations, natural fossil fuels and electricity for the most part. Scope three everything else. And that's why there's all this kind of debate and conversation around scope three, because it's sort of the it catches all the other things. And so it can be a bit unwieldy. However, scope three is definitely material for the home building industry.

00:48:02:29 - 00:48:26:06
Stefanie Coleman: So if you look over on the left side, you'll see that little loop that comes up to scope three on the upstream activities. The very first box there is the embodied carbon. So those are the emissions that are generated for the materials that we build our homes with. There's a few other things in there like business travel, employee commuting.

00:48:26:06 - 00:48:50:16
Stefanie Coleman: So you've got an office, employees drive back and forth to work. Those emissions would be part of scope three because, say if they work from home, then those emissions wouldn't have been generated. Right? So that falls within scope three. Same thing with at least leased buildings and assets fall into scope three. That's on upstream. On downstream you'll see transportation and other things.

00:48:50:16 - 00:49:19:25
Stefanie Coleman: But the big one I want you to look at is the use of sold products. So that's where energy efficiency comes into place. So we build our homes are super energy efficient. Those GHG or carbon emissions savings are from that fall into that scope three category use of sold products. So that's where we can show energy savings if say we're building to certain specifications for not you know.

00:49:19:26 - 00:49:45:29
Stefanie Coleman: So I'll show you something in a minute to to give you an idea of the impact of these. So hopefully that makes sense. Just to give you a high level of how the scopes are defined according to the GDD protocol, which interestingly, five of the top ten builders have reported using the GHG protocol, the other five of the top ten have not disclosed their carbon emissions yet, although I do anticipate they will.

00:49:46:01 - 00:50:17:10
Stefanie Coleman: But you'll see here the ones that have reported they've got their scope one, their scope two and scope three. Now, as I mentioned earlier, ESG is under construction. And so there are some things in here that seem unusual, like when I'm looking at it. And so it could be that the way it was calculated may be a bit different, or there was things that were excluded, that sort of thing.

00:50:17:10 - 00:50:39:02
Stefanie Coleman: So there's some questions. So part of carbon accounting, part of the one of the principles of carbon accounting is transparency. And so what we want to do when we're disclosing the information is there's a bunch of information that we should provide as backup to say, how do we arrive at these numbers so that I can take it away and figure out these same numbers for myself?

00:50:39:02 - 00:51:08:04
Stefanie Coleman: Now, in the reporting, I did not see that information that told me how these numbers were exactly arrived at in detail, enough to be able to figure out why there were some unusual things. So I don't really have an answer on it, other than just to say it seems a bit unusual. But what I suspect is, as people get more comfortable with GHG reporting and as you know, over time these are disclosed.

00:51:08:05 - 00:51:24:28
Stefanie Coleman: This will tidy itself up and it'll probably be a bit more consistent. And so I'll just point a few out to what I'm talking about. So for example, you'll notice Doctor Horton's scope one is 68,000.

00:51:25:01 - 00:51:57:18
Stefanie Coleman: Metric tons of carbon emission equivalent, whereas Meritage, for example, is 142. So we said scope one was the fossil fuel emission for buildings and fleet. So, you know, I guess so there's obviously I'm thinking some exclusions there. Either Meritage doesn't have any buildings or fleet or maybe some things are excluded. Maybe they lease properties. You know, there could be a few things to cause these big variables.

00:51:57:20 - 00:52:17:18
Stefanie Coleman: What I would encourage anybody who is doing GHG reporting, though, is to provide more clarity around how they came to the numbers so that it could be a bit more clear. You know, for when, you know, say an investor is looking to do a comparison, it would be a bit more clear. Another one that I thought was a bit unusual under Pulte.

00:52:17:19 - 00:52:37:12
Stefanie Coleman: They had natural gas under scope two. And so again, it was I wasn't entirely clear on that one. But regardless of all this, this will sort itself out over time as people get more familiar with it and more experienced in it. But what I did want to point out to you is in bold on the right hand side.

00:52:37:14 - 00:53:15:08
Stefanie Coleman: Those are those scope three emissions I was talking about. So you can see that they are huge. The embodied is the like I mentioned, the the emissions generated from the materials we build the homes with and then the operating emissions is the other number there. They are very significant and therefore they are considered material. And therefore, according to the SEC ruling, if it goes through, it would seem that these would be required for builders to report on based on the materiality of them.

00:53:15:10 - 00:53:37:17
Stefanie Coleman: Now, another thing that builders are including in their sustainability reports under the environmental side is their her scores. Now, this is also one of the categories that are outlined in Sasb. So units here is the number of units that the builder has built. So that's their number of homes that they've built. I included that just for scale. So you could have a perspective.

00:53:37:19 - 00:54:13:16
Stefanie Coleman: But next to that is the number of units that received a Herz score. And then beside that is the actual Herz score. So if as an investor, for example, I am concerned about energy conservation and environmental impacts around energy conservation for the her score because that's essentially what that's measuring. I would look to these different builders and I would notice that KB Home and Meritage, they have.

00:54:13:18 - 00:54:36:04
Stefanie Coleman: Tested or scored almost 100% of the homes that they've built that year. And their scores are very low, which means that they're more energy efficient than other builders. So if I was an investor and I was looking at this and that was something that was important to me, then that would factor into my decision making of whether I was going to of who I was going to invest with.

00:54:36:04 - 00:55:07:25
Stefanie Coleman: So this is why this information is quite important. Another thing that is this is also part of the Sasb reporting criteria that the builders have been reporting on. And I pulled this off of their their information. There's more on there. I just highlighted a few items, lots with that are under water stress. So basically water shortage. And so these were the numbers that were reported.

00:55:07:27 - 00:55:34:11
Stefanie Coleman: The number of homes built in this area significantly lower. But these are some of the lots that they have that fall within that category of water stress. Lots that are available or that that are owned or controlled in the 100 year flood plain or flood zones. Those are those figures. And then another one was the financial loss due to environmental fines.

00:55:34:11 - 00:56:10:14
Stefanie Coleman: And so most of the builders have zero in that category with a couple had some fines. So again, if I was, you know, an investor, looking and this was a topic of importance to me, then this may way into my, my decision making with, with investing, particularly the flood and the water stress. Because you know, you know, there's risk that those, those pieces of land couldn't be built on, for example, under s under the sustainability reports that builders are voluntarily reporting on.

00:56:10:14 - 00:56:38:12
Stefanie Coleman: I just wanted to highlight a diversity. So eight of the builders had disclosed on diversity as far as like percentages, almost all of them had commented in one way, shape or form on health and safety as well as community engagement. So good things that they're doing in their communities. Diversity. Some of the topics that are being discussed are gender and race and ethnicity and age.

00:56:38:12 - 00:56:43:29
Stefanie Coleman: So there's some of the ones that I've seen now. Yes.

00:56:44:02 - 00:56:55:27
Mike Collignon: Just had a question from a couple slides back. Is there a method that relates her scores to actual emissions?

00:56:55:29 - 00:57:33:24
Stefanie Coleman: Oh, that's a good question. So I think. You know what. That's a really good question. Wow. You guys asked me good questions. I don't have all the answers for I know. So in Canada we have a different but similar type of scoring. And so the information that we get from the software will tell us what our kilowatts of or our giga joules of energy is, and then we can do some calculations within that.

00:57:33:24 - 00:57:58:04
Stefanie Coleman: Also, it tells us what our, our kilowatts and our, our sorry, our meters cubed of gas is. If there's natural gas, we can then take that information and do can do some conversions to get some estimated GHG. So it's possible I don't know that it's necessarily the her score itself, but maybe data behind the scenes might be able to give you some information to do some calculations.

00:57:58:04 - 00:58:18:24
Stefanie Coleman: I would suggest maybe talking with a checking in with an energy advisor, because they might be able to tell you if they can draw that data to do those conversions from behind the scenes. So I know we can, but it's not through the actual score itself. It's through the data within the within the software.

00:58:18:27 - 00:58:53:23
Mike Collignon: So we had one of our other attendees chime in. Kevin said that hers can provide emissions through like the REM rate software that does that. I think the thing to point out here is that any kind of rating is a projection, so it's not. The question is interesting from Rainier because he's asking about actual emissions. A rating is done at a moment in time, and it's projecting usage forward.

00:58:53:25 - 00:59:07:23
Mike Collignon: That's right. So tying to the word actual emissions, it's going to I would think it would project, you know, theoretical emissions or or modeled emissions.

00:59:07:29 - 00:59:08:19
Stefanie Coleman: That's right.

00:59:08:20 - 00:59:16:15
Mike Collignon: The only way to really look at the actual would have to be look at your utility bills and what energy you have used. Correct.

00:59:16:22 - 00:59:43:06
Stefanie Coleman: Exactly. Because exactly. Sorry. And I was I was sort of assuming that. But you're absolutely right. And thank you for articulating that so well. So it's actually it. So anything up to the time of possession is modeling that's based on, some set of criteria. So I don't know exactly what all is in hers. I know more what is in the Canadian version of it, but I have a general idea of what's behind the scenes.

00:59:43:06 - 01:00:05:08
Stefanie Coleman: And so we can only kind of estimate what is going to happen when occupants go to move into the home. That can be a totally different thing. You know, if they get a hot tub or if they add a bunch of things, right, or if they've got 14 PlayStation, their lifestyle can can greatly impact the actual performance, which is therefore then could impact the actual emissions.

01:00:05:08 - 01:00:31:08
Stefanie Coleman: But, yeah, but I think you should be able to get at least an estimation based on modeling, and you should be able to do some conversions. But keeping in mind that, like I said, ESG is under construction, like this whole thing. And you even saw the screen that showed the vast difference using one standard, but yet vast difference in how the emissions were calculated, what was included, what wasn't included.

01:00:31:08 - 01:00:51:08
Stefanie Coleman: There was many different ways. So yeah, I would I would suggest not using the word actual because we don't entirely know until we get the actual bill, at which point we could then convert it to emissions. Yeah, exactly.

01:00:51:10 - 01:00:53:17
Stefanie Coleman: Is that all the questions?

01:00:53:19 - 01:00:55:11
Mike Collignon: Yeah, it's all for now. Thanks, Stephanie.

01:00:55:12 - 01:01:16:03
Stefanie Coleman: All right. No problem. Sorry you disappeared off my screen. So? So just feel free to jump on when I'm when I'm talking and interrupt me okay. So on diversity. So what we have are gender race and race and ethnicity and then age. And I did want to. Oh sorry. I just want to go back to the screen for just a moment.

01:01:16:03 - 01:01:49:09
Stefanie Coleman: So I did notice that for there is mandatory reporting for the private sector with who have over 100 employees and also government contractors for the the Equal Employment Opportunity Commission report. And so I noticed that a number of the builders were starting to disclose this information. So I did find that with with several and others just reported on diversity without the the detail that the EEO one report requests.

01:01:49:12 - 01:02:02:15
Stefanie Coleman: Now, one thing I did want to note, and I came across this as I was looking through the reports, and I'm not going to say who it is, but when we're talking about diversity.

01:02:02:17 - 01:02:37:12
Stefanie Coleman: When we're speaking to it, we want to be specific as far as we're talking about gender and then looking at gender in and of itself. So on the right you'll see that's male and female. So in that case, the leadership diversity was 79% male and 21% female. So that gives a clear idea of what the ratio is there on the left side you'll see what they did was they added gender and ethnicity together.

01:02:37:14 - 01:03:05:28
Stefanie Coleman: So it sort of muddy the waters. And and I think that this, this is not the intention and it's sort of probably sends a message that's a little different than they that they would expect. So I would encourage that. When companies are disclosing on diversity, don't add the categories together, but rather, you know, when you're talking about gender, speak to gender, when you're talking about ethnicity, speak to ethnicity.

01:03:05:28 - 01:03:28:00
Stefanie Coleman: If you're talking about age, speak to age and don't kind of add them together because it doesn't quite send the right message or the the right intent. So that would just be more of a cautionary note that I observed as I was going through the reports. Health and safety. So here's another one. Again, this is a criteria that came up in the Sasb reporting.

01:03:28:00 - 01:04:01:14
Stefanie Coleman: And so all of the builders that were reporting on Sasb provided a number. And so again, thinking, you know, through the investor lens, if I was an investor and health and safety was a top priority for me, I've got this information that I could look at. And you'll notice Taylor Morrison has a very low score .332. So that would indicate to me that, that they have low incidence of, of, you know, health and safety issues with their, with their direct employees, whereas some of the other builders have a higher number.

01:04:01:16 - 01:04:27:09
Stefanie Coleman: One of the builders noted that an average is 1.0, to give you kind of a bit of a benchmark. So you'll see that, you know, a couple or below and most of them are a bit over. And so again, you know, if if this is a topic that is of concern to me, therefore it's material. This is a, this is an important piece of information that that is being disclosed through Sasb.

01:04:27:12 - 01:04:51:23
Stefanie Coleman: Now on governance, I just wanted to highlight here again, diversity on the board. These are the builders that have specified in the in the reports that I went through that they have at least acknowledged and reported on diversity of the board. It doesn't necessarily mean that the board is diverse, but it means that they've reported on it.

01:04:51:26 - 01:05:17:20
Stefanie Coleman: They have acknowledged that the board has ESG oversight, so that the board is actually it's not just some tack on that, you know, is is in the one little department in the basement, but this is actually overseen at the board level. And almost all of them have identified that they're looking at the risks and opportunities within their business as well as strategies.

01:05:17:22 - 01:05:44:04
Stefanie Coleman: So I wanted to just highlight Sasb and what it focuses in on. So you'll see it focuses in on the environment, social capital, leadership and governance, business model and innovation and human capital. And so this is just a summary of most of the things that I showed you earlier. So you see eight of the ten builders are reporting on it.

01:05:44:05 - 01:06:12:27
Stefanie Coleman: These are a handful of the topics that are disclosed. So if you're curious you can go on to their website and look for their information. Some of them have it as a separate report. Some of them have it included in their ESG or sustainability report. But it's worthwhile to go have a look and you can get a sense and then, you know, you can you can compare them like if you were to consider investing, you know, you can compare them and make your decisions accordingly.

01:06:12:27 - 01:06:37:26
Stefanie Coleman: From that, the task Force on Climate Related Financial Disclosure. So Sasb and TFD are the ones that have really risen to the top. And so this one really focuses on governance strategy, risk management and metrics and targets. And as I mentioned before, this one is driven and is targeted for the financial industry. And they're really looking at the environment and the governance side of things.

01:06:37:26 - 01:07:09:02
Stefanie Coleman: So what are you doing specifically to address climate change. And so the only one that is disclosed on. So I thought I would just give you a sample of some of the information that was in the report. So on governance, they actually have set up a dedicated board committee to address ESG for the business. So this is a board level committee specifically for under climate change, the physical risk, you know, the wind blows down all the houses under construction.

01:07:09:03 - 01:07:48:08
Stefanie Coleman: They identify acute and chronic risks. So everything from heat waves to disasters to precipitation and increased temperature and sea level rise. So those are some of the physical risks, transitional risks like I talked about before. Those are like policy regulations. We have a carbon tax that's added or material costs go up because a manufacturer or manufacturers are located on a coast, and sea level rise has impacted the supply chain, customer demand, reputation and customer demand shifts towards net zero homes.

01:07:48:08 - 01:08:17:09
Stefanie Coleman: But but the company hasn't scaled up to or skilled up, I should say, to build net zero homes or perhaps increased scrutiny by investors. Technology is another one. A lot of innovation and I'm going to touch on that in a minute. But this is very, very, quite interesting as, as a cost or transitional risk under opportunities. Of course, you know, Meritage, you know, has been a long time proponent of energy efficient construction.

01:08:17:09 - 01:08:49:00
Stefanie Coleman: So, you know, leveraging that brand and being a climate leader, you know, they're the first one out of the gate on TFD under risk management. They have now developed an ESG action plan that they review every single year and then integrate those actions into their operations. So they are working towards, you know, integrating ESG into the what I say, the DNA or the or the the entire strategy and operations of the business under metrics and targets.

01:08:49:02 - 01:09:16:21
Stefanie Coleman: What they've identified are the scope one, two and three. So the absolute emissions that those are like the total emissions that the company generates. And then they also look at intensity. So that's basically taking whatever metric it is from the emission, the absolute emissions, and then dividing it by whatever metric you want to. And so in their case, they took all their emissions divided by the number of homes that they close to get an intensity per home closed.

01:09:16:24 - 01:09:44:01
Stefanie Coleman: They've also done one for operational and then also for scope three. So focusing in on the embodied carbon in the operational carbon among other things. So those are the sorts of things where and you can get a sense of how TCF is, is asking the business to dig deep, dig deeper into what are the risks, what are your action plans, what are you doing about it, and what are the measurements or the or the metrics and targets for kind of an accountability?

01:09:44:04 - 01:10:12:04
Stefanie Coleman: But keeping in mind that there's a lot of business opportunity in this as well. And the first movers are the ones that could take advantage of that. Now you say, okay, that's a lot of information. And believe it or not, there's sort of a what's next? Even beyond what I've shared with you, the ESG reporting. And so what some of the largest leading builders globally now beginning to do is what's called integrated reporting.

01:10:12:05 - 01:10:50:17
Stefanie Coleman: So you know how I mentioned before how ESG and financial reporting, like I think the future is based on the trajectory that I'm seeing that ESG will be reported on with a similar level of rigor and attention to detail as the financial industry. Well, now what these, you know, some of these businesses are doing is they're now embedding in kind of the direction that Meritage is going with, with building into their strategy, ESG measures, integrating ESG into the business so that there is a financial and ESG reporting that's integrated.

01:10:50:17 - 01:11:19:16
Stefanie Coleman: So it's bringing the two together. It's not just kind of a tack on report that you do for the business just to satisfy some investors. It is now kind of a wholesale shift in transition in how we do our businesses to account for environment, social factors. And so, you know, the industry is really ripe for disruption. We've got affordability crisis, we've got labor shortages.

01:11:19:16 - 01:11:39:15
Stefanie Coleman: We've got supply chain disruptions. Then of course, you know, we've got, you know, some of the physical risks of climate change and social issues and interest rates and all these sort of crazy inflation that's out of control. So we're under this a tremendous amount of potential disruption. And I want to encourage you to this this report is readily available online.

01:11:39:19 - 01:12:04:27
Stefanie Coleman: It's by McKinsey and company. And they did a full about 70 page report on the next normal and construction. And it talks about disruption in the construction industry. The construction industry has really not evolved a whole lot, whereas a lot of other industries have. And what it's saying is that all the indicators are showing that our industry is, is ready for disruption.

01:12:04:27 - 01:12:29:12
Stefanie Coleman: And when you kind of layer on, you know, an industry that that is needing to evolve and has a lot of pain points with the things that are coming into play with ESG, you can see how disruption can occur and new companies can come in and sort of take over. So this is a really good document and report, and I would encourage you to to look that up.

01:12:29:12 - 01:12:56:18
Stefanie Coleman: Like I said, it's available for free online. But I wanted to show you and this was super interesting. As I was going through the reports, I was looking for certain bits of information to see what the builders were doing as far as the research and innovation. And so what I found was that pretty much all of them spoke to now, again, all I can do is base, you know, what I see on what I'm finding online.

01:12:56:18 - 01:13:34:27
Stefanie Coleman: So I don't know what's actually happening behind the scenes or in real life. But they spoke to lean. So lean practices, whether it's advanced framing, optimal value engineering, waste reduction, material natural resource efficiency. So there's a lot of talk about that. There was also a lot of talk about or some like a good deal of talk about it or digitizing and bringing more technology like computerized technology to their processes to develop data and that sort of thing.

01:13:34:27 - 01:14:06:28
Stefanie Coleman: And what was really interesting was the number of builders that were moving forward with or, or dabbling in offsite or manufactured construction. So a lot about penalization. Lennar is 3D printing a test pilot of I think it's 100 homes in Texas. You know, to their sampling with that doctor Horton was was trying penalization toll brothers I believe have their own manufacturing plant if I if I read that correctly.

01:14:06:29 - 01:14:45:17
Stefanie Coleman: So there's a big move or certainly a move towards moving towards manufacturing of homes, which is really beneficial from an ESG side because it generally their waste is reduced, emissions are reduced. And the other thing too is it's beneficial because of the labor shortage. It helps to resolve a labor shortage problem. So I can see some disruption happening in this space way from kind of the traditional stick frame construction and move toward manufactured and off site type of construction.

01:14:45:17 - 01:15:11:24
Stefanie Coleman: And it seems that the builders that I looked at are already moving in this direction. The other ones that have nothing listed next to them, it doesn't mean that they're not. I just didn't see it in the readings that I went through. So our industry is going through a lot of pressure, a lot of pressure from all sides, whether it's from staff, community members, government, supply chain insurance, banking, financial.

01:15:11:25 - 01:15:53:21
Stefanie Coleman: And so that's what I mean when I talk about a sustainable revolution, I think we're we're at this critical, pivotal moment in time where, you know, we've got a lot of pain points and a lot of new innovation that's coming to market, along with this push towards becoming more sustainable. And so I do see our industry going through a very significant revolution as, as we will globally as there's this bigger push, not just in construction, but of course globally on all businesses to report, disclose transparently on their ESG actions.

01:15:53:22 - 01:16:22:29
Stefanie Coleman: So the action steps that I wanted to leave for you as and if you're builder or in the business or even if you're not. I would suggest, first of all, do some research. Look at the builders sustainability and ESG reports. Look at banks and investors that you deal with. I know like the big banks in in Canada all have their ESG reports and their action plans.

01:16:23:00 - 01:16:52:02
Stefanie Coleman: They're they're doing companies that you buy products from, maybe your car dealership or big oil or, food, you know, start doing if you haven't already, start doing some research. I when I, I had no idea of this was happening. And then when I started looking at it as I was working through my master's degree, I was blown away by the progress that has been made on this side, at least in the reporting stages.

01:16:52:02 - 01:17:26:17
Stefanie Coleman: And so if the reporting, that means they're thinking about it and making actions and eventually making actions towards it. So look for ESG reports and sustainability reports across the gamut of, you know, products that you buy and builders and industry that you work with, even suppliers and manufacturers. Look at the reporting standards and frameworks. And I would suggest, you know, look at the GHG protocol for carbon accounting, look at the TCF and Sasb and the group particularly, as well as the UN Sustainable Development Goals.

01:17:26:19 - 01:17:52:00
Stefanie Coleman: Those are all ones that we saw. The builders are already starting to report on. And so get familiar with those and look at the criteria to see what they're asking for. And then secondly, I would encourage you to start look at benchmarking and developing data curation. Because a lot of this ESG reporting is you need data for it.

01:17:52:00 - 01:18:19:05
Stefanie Coleman: And what I personally found and what I've heard other companies large like we're talking the big public businesses as well, saying that trying to get the data is very difficult. It exists, but it exists in like 14 different softwares and apps and Excel spreadsheets and PDFs and emails. And so it's very hard to be able to. And then you've got your financial accounting, right.

01:18:19:07 - 01:18:55:24
Stefanie Coleman: It's it's hard to gather it. It takes a tremendous amount of effort to gather it. So you want to start curating the data and document your ESG actions that your company has done. What I found is builders do a lot of awesome, awesome work, but they don't always tell people about it. And so this is one way, by starting to document your ESG actions, that you can begin to communicate, even if you just do it internally, first you consolidate it onto a document and then you can start communicating to people the great work that you as builders are doing.

01:18:55:27 - 01:19:21:04
Stefanie Coleman: You should under the benchmarking and data. You should also look to start getting that first carbon accounting done. Scope one and two and components of three. I wouldn't say all three because that would be really overwhelming. You probably would want to hire a consultant to help you the first go, and then you can kind of judge from there if you think you can handle it yourself, or if if you would want to have a consultant.

01:19:21:05 - 01:19:51:01
Stefanie Coleman: One thing, though, is third party validation may eventually be required just to authenticate numbers. No different than an audit for a financial report. So that could come in the future at some point in time. But start getting yourself familiar with that. And you could also, you know, begin to start thinking about what products you use to see. Are there alternatives that maybe have a lower carbon impact that plays into this whole ESG story?

01:19:51:03 - 01:20:13:27
Stefanie Coleman: And then lastly, I'm going to finish off with the triple bottom line action items. So those are the action items that you can do that are a win for people that are a win for the planet or the environment, and that are a win for your bottom line as well. So mitigation and adaptation, we talked about that mitigating efforts are waste reduction.

01:20:13:27 - 01:20:38:00
Stefanie Coleman: Can you do something with your plans like your house plans to reduce waste such as implement lean or optimal value engineering? What can I do to move towards net zero? Ready? Get geared up for that as the building codes begin to change if you're not there already. And what can I do? Can I replace certain materials with other materials that are low embodied carbon that are less expensive?

01:20:38:01 - 01:21:01:00
Stefanie Coleman: Right. Those are some options that that you may find are even possible. Similarly for adaptation, what do I need to do? Whether it's, you know, adopting a program like fortify or whether it's just paying attention, making sure I've got a great water management system, if I'm in a high precipitation area or one that's projected to be have high precipitation.

01:21:01:00 - 01:21:29:14
Stefanie Coleman: There's lots of information online about whether data and projecting out with different scenarios. So you could look at that information to make sure that your homes, you're designing them so that not only you avoid litigation in the future, but to keep your customers happy and protected. Innovation. So develop a data architecture. What I you know, as I'm doing this myself within within a business, you know, I'm thinking, man, wouldn't it be great if you know the health plans are in BIM?

01:21:29:14 - 01:21:53:28
Stefanie Coleman: And that ties with the the construction scheduling software, which ties in with all the warranty, which ties in with the financial accounting so that all the data points are there in a platform. And I can pull and run reports and analyze different things. Right. So look at, you know, do your softwares talk to each other? Can you pull this data together back to the earlier point?

01:21:54:00 - 01:22:20:19
Stefanie Coleman: Can you pull this data together so that it's mine and you can analyze and look it through at things, through different angles to optimize, reduce waste, you know, and reduce cost, right, while doing a better job for the environment. And then also I would encourage you, you know, as I said, there seems to be the shift towards manufacturing of homes and or offsite manufacturing or on site, you know.

01:22:20:20 - 01:22:40:02
Stefanie Coleman: However it is but or a hybrid of of each. But to look at that to see are there are there companies in your area that you could begin to explore that could you partner with some other builders, right, to develop a facility in your area? Those are just some some ideas to think about because there does seem to be movement on that front.

01:22:40:02 - 01:23:02:12
Stefanie Coleman: And then lastly is what are the the the the three x winds I call them or it's sort of like the triple bottom line. And what are the low hanging fruit. So one is like I mentioned waste reduction. I did a waste audit. I climbed into the dumpster every single week at a job around the corner and measured every single piece of waste.

01:23:02:12 - 01:23:25:10
Stefanie Coleman: And even with advanced framing techniques and all the rest, there were still quite a fair thousands of dollars in waste that was in the dumpster. And so it was incredible learning experience, things like when you have multiple roof pitches on a home, you can increase your waste because the framers won't necessarily use that cutoff because the angle is different, because of the different roof pitches, right.

01:23:25:11 - 01:23:53:09
Stefanie Coleman: Little things like that. Or can we change our designs to design out the waste? Because what I discovered was everything that was in the dumpster was a consequence of what we designed on paper. Right. So waste reduction, which could be a triple bottom line win the warranty department is another one. You know, you're having to pay twice for something that you're only paid for once and you're having to inconvenience the consumer, right?

01:23:53:10 - 01:24:22:00
Stefanie Coleman: So look at the warranty department. And what can you do within the warranty department to streamline that, to try to have zero zero warranty callbacks as much as possible to reduce that that waste which impacts the environment and which impacts people and your bottom line. So I know I've thrown a lot of information at you, but what I wanted to suggest to you that as private business, you may say, well, what does this have to do with me?

01:24:22:00 - 01:24:57:09
Stefanie Coleman: This is the public business. Well, if you ever need financing, what I anticipate, in which I also got the sense from others that in the consulting process for the SEC, like the public review comments that came back. And I also experienced this myself as I was going through the the reports that had the extra disclosure around ESG, I was like, wow, this gives me such a wealth of knowledge about how the company works and the inner workings of the company.

01:24:57:09 - 01:25:37:27
Stefanie Coleman: That does not come in just the 10-K, like the financial reports, they have some information in there, but not the same wealth of information. And so I could see investors getting used to that information from public companies and asking private business to provide that as well. I mean, it's a logical kind of a next step. So I would encourage you to look at what's happening in the public industry as sort of a crystal ball of what could come so that you can get ahead of it, get prepared so that you can transition without it being too disruptive or to too stressful essentially in your life.

01:25:37:29 - 01:26:00:17
Stefanie Coleman: And so I want to end with just saying that, you know, my personal mission in life is, is to help the building industry transition to a sustainable future. And, you know, I want to know that the world is better, because I did something good for it, you know what I mean? So I want to leave our world better than the way I found it.

01:26:00:17 - 01:26:22:14
Stefanie Coleman: And so that's sort of a life mission. That is what Doug Terry Homes are. One of our core values is leaving our campsite better than we founded. It was a, a value that was passed down from Doug Terry senior to his kids. And now to all of us that worked with the company. So we want to leave our our world better than we found it.

01:26:22:14 - 01:26:44:28
Stefanie Coleman: And we are going through, I think, a sustainable revolution. But I think in the end it it will be better for us and for future generations. So thank you very much. Thank you to Sam and to Mike for the opportunity. Thank you for your patience, and I'm happy to attempt to answer any questions you have. If I don't have them, I will get them.

01:26:44:29 - 01:26:46:27
Stefanie Coleman: Get them to you.

01:26:46:29 - 01:27:13:28
Mike Collignon: All right. Thank you. Stephanie, we do have some questions. I've got some as well, but I'm going to get to the audience first. So Rainier had another kind of observation in question. He's feeling that the overall approach appears to be kind of a human centric. He's pointing to a trend where, you know, there's more of a bio centric approach to building, kind of a rewilding.

01:27:14:01 - 01:27:22:10
Mike Collignon: Do you see any of the homebuilders looking in this direction, the kind of that rewilding.

01:27:22:13 - 01:27:29:04
Stefanie Coleman: So, you know, so I assume you're talking about the way we develop our land. So talking about land.

01:27:29:06 - 01:27:31:15
Mike Collignon: Yeah. Especially when it comes to turf.

01:27:31:17 - 01:28:02:05
Stefanie Coleman: Right. Yeah. So that's an interesting question I was noticing in the reports when they were talking about the number, the builders did speak to the way in which they deal with land. So in in some of the cases there's floodplain areas that they reclaim. So they fill them in. But they did speak to the naturalized areas, keeping them as far and and in protecting those areas with the different species.

01:28:02:05 - 01:28:40:26
Stefanie Coleman: So some of them were talking about that. I know, but I didn't I don't recall seeing anywhere where they were specifically talking about taking what they would normally build on and turn that into necessarily into wildlands, other than if it was part of the subdivision design, like with parks. So since some of them will have parks and that sort of thing, I know what we've done at Doug Cherry Homes is there are certain areas that we won't touch, like we'll leave the forested areas as forest, but then like where, where we're building on, say, green land development, where there, say a park, we will naturalize it.

01:28:40:26 - 01:29:09:21
Stefanie Coleman: So we will, there will be, say, a retention pond that we will allow to be naturalized. We'll, we'll plant native species around the area and put in different bird boxes that are, you know, designed for native species, birds and wildlife and that sort of thing. So so that's how we do it. I don't know, though, that we would that that the builders are necessarily taking Greenlands that they would build on and turn those into wildlife.

01:29:09:23 - 01:29:15:12
Stefanie Coleman: I haven't seen that, but certainly protecting what was there. I don't know if that answered the question.

01:29:15:14 - 01:29:33:02
Mike Collignon: Okay. Well, we do have another question from Amber. She wanted to know on the energy efficiency side other than hers scores, what do you feel are the most valuable metrics to itemize for data mining?

01:29:33:04 - 01:29:43:08
Stefanie Coleman: So okay, so one of the things that I would suggest is greenhouse okay. So you're talking about just in general, right okay. Not just.

01:29:43:11 - 01:29:45:05
Mike Collignon: On the energy efficiency side.

01:29:45:06 - 01:30:16:18
Stefanie Coleman: Yeah okay. On the energy efficiency side. Okay. Well one of the things that well, it's it should be part of the her score, but specifically is air, air tightness of homes. And so we lose a lot of energy through, through air leakage. Right. So that is one of the metrics that I would say is important on the energy efficiency side that builders would want to know and be familiar with and try to reduce as much as possible.

01:30:16:21 - 01:30:20:08
Mike Collignon: Okay. All right.

01:30:20:11 - 01:30:58:12
Mike Collignon: Kevin had an interesting observation. You know, we have no control over operation and management once the house is turned over. That's right. And as we talked about earlier, the the hers rating is performance based. Right. So we look at the moment before closing or when it's moved in. But from thereafter we can only project. Yeah. So the question is would our industry be better off using a real number if it was performance tested and then a default once the house closes based on something like average utility uses I?

01:30:58:15 - 01:31:20:09
Stefanie Coleman: The only challenge though would be if you did it at the time of house closing is you still won't know what the actual usage is in how the home is lived in. See what I see what he's saying like. So it sounds to me like he's defining. There's the modeling, and then you turn the heat on and there's the performance of it.

01:31:20:11 - 01:31:46:14
Stefanie Coleman: So I understand what what he's talking about there. But I think like the bigger jump is that in how people actually live in it, because what if the homeowner wants it to be 75 degrees inside the house or something like that in the wintertime? Right. So that could change it. It would be more. So one thing that could be so we can't control what the occupants do, but what we could do is educate the occupants.

01:31:46:14 - 01:31:53:20
Stefanie Coleman: And so I'm going to show you something and you can ask the next question. I'm just going to pull up an app that I'm going to show you. That's pretty cool.

01:31:53:22 - 01:31:56:12
Mike Collignon: Okay.

01:31:56:14 - 01:32:08:23
Stefanie Coleman: I have to show it because it's, it's it's tied with my energy monitoring system and my solar panels. So it's pretty cool. Okay. Can you see that? Yeah.

01:32:08:26 - 01:32:09:11
Mike Collignon: Yeah.

01:32:09:11 - 01:32:29:17
Stefanie Coleman: Yeah. So so I have so this shows as an occupant of a home, this shows me on my phone okay. So my fridge is on right now. So it's showing you know what is on, what is always on and what the appliances are like. It shows that my fridge is turned on and off. I had a the kettle on, you know, for some tea.

01:32:29:19 - 01:32:58:22
Stefanie Coleman: And it's also showing my solar generation the big orange dot there. So it's sunny out today. So I'm getting a lot of sun. So and now yes, I'm in the industry and yes, I've, you know kind of studied this, but this is just cool. Like as a homeowner this is cool. Right. And so I think if people saw through some sort of a monitoring system, what they're using their energy for, it may encourage a change in behaviors.

01:32:58:22 - 01:33:21:28
Stefanie Coleman: Potentially our utility bills are really not painful enough yet. I don't think, for people to entirely take action, they'll still get their hot tub or they're still have their 14 gaming stations. But, you know, over time, as utility bills and whatnot go up, I think it will have a bigger impact on people. But if you don't know, you know, you won't change your behaviors.

01:33:21:29 - 01:33:46:29
Stefanie Coleman: Right. And so it's like looking at the the calorie count on the food packaging. So now now that I see the information I can make a choice. Right? Whereas before I didn't know I'm just buying whatever looked good. And so I think like I kind of see the energy monitor the same way. And perhaps, you know, that could be something to try to educate and persuade behaviors.

01:33:47:01 - 01:34:13:04
Mike Collignon: Okay. Well, and Renee made a recommendation to look at the span panel. Span panel does it. Excellent tool for educating people via knowledge of what they do. So there's a nation of something there. I had I had a couple questions for you when you were going back to the alphabet soup. Right. And you were saying that the SEC has delayed their ruling?

01:34:13:06 - 01:34:39:04
Mike Collignon: Yeah. Do you think that the SEC or the SCA in Canada will ultimately choose one of these standards or organizations? Because I just feel like if there's going to be 14 different standards or processes. Yeah, I see there being a lot of potential for companies to, you know, kind of exploit some loopholes or maybe just figure out what the easiest path is, and I'll just make sure to use that one.

01:34:39:10 - 01:34:42:25
Mike Collignon: Yeah. What do you think that like how this is going to play out.

01:34:42:26 - 01:35:11:14
Stefanie Coleman: Yeah I mean it'll be interesting. I do know that they actually in their documents, they actually referenced the greenhouse gas protocol for carbon accounting because there's also like an ISO standard for carbon accounting as well. Right. So but they they actually mentioned it, they I don't know that they mandated it, but they mentioned it. They specifically named the GHG protocol and they specifically named TFD as a referenced it.

01:35:11:14 - 01:35:38:28
Stefanie Coleman: So I believe that I mean, I would anticipate that that's probably where it's going to go because those in that and that's what I'm starting to see like as far as what people are reporting on, because those specifically talk in the PhD, it specifically talks to the points that are in the in the SEC proposed rules around GHG reporting and also the risks around that.

01:35:38:28 - 01:36:08:04
Stefanie Coleman: And that's what the whole TFD is about is, is about the climate risks and the governance around it. So I kind of think I mean, they specifically referenced it. So I kind of think that that's probably where it's going to go. But the thing though too, is there's the SEC but then there's investors. And so investors may say, well, you know, I want to see grass or I want to see Sasb or I want to see GRI or so they could pick and choose something.

01:36:08:06 - 01:36:36:19
Stefanie Coleman: But Sasb was designed for the financial industry and it's they, they very carefully designed it to make it not onerous, not overly onerous because then people just won't do it. Right. And so that's why I think eight of the top ten builders are already reporting on Sasb, because it also has a home building specific standard. So it's specifically for home buildings.

01:36:36:21 - 01:36:57:07
Mike Collignon: Okay. Gotcha. Yeah. And Kevin wanted to point out that there's he says there's many rating systems that require the owner to report utility invoices for a period of time. I'm not sure which rating systems those are, Kevin, but hopefully you can send those to me in the chat but for a period of time so we can get the data.

01:36:57:07 - 01:37:19:21
Mike Collignon: In some cases, he's saying lead is one of those that requires to report utility invoices. So there's there's the actual usage data there at that point. And you can really get down to, okay, what's happening here. Now. Again, I think as we've kind of talked about, it's still tied to the human beings that are in that property. Right and right.

01:37:19:24 - 01:37:36:18
Mike Collignon: We deal with this with water rating, just, you know, you can have a home that is empty nesters occupy it, and then they decide to finally sell their house and they sell it to a family of six. Well, that's that's a big difference. The structure of the property didn't change. But now you've got six people as opposed to two.

01:37:36:19 - 01:38:04:28
Mike Collignon: And that's where ultimately this gets a bit tricky even on the projection side. And Kevin points out to smart meters. Smart meters are also going to show this kind of data. And you've got community and utility programs that just like you held up your phone, right. You can you can see this real time data. I don't know how publicly available some of that is versus I've opted into this program.

01:38:04:28 - 01:38:16:15
Mike Collignon: I can see my own. The utility can see it, but then there may be some privacy issues there. That's right. Disclosure and I don't know, but but there is data that we can look at for sure.

01:38:16:17 - 01:38:49:29
Stefanie Coleman: Yeah. And so that's where you know on the so on the scope one, two and three, the scope one is the builder. Like using builder as the scenario, as the example. It's their fossil fuels that they used during the course of their business within their business assets. So the buildings and the fleet, you know, scope two is the electricity that the builder used and then the scope three, I mean, at this stage of the game, really, you know, the best we can do is to build the homes with as little carbon emissions as possible.

01:38:49:29 - 01:39:19:04
Stefanie Coleman: So the embodied side build them in such a way that we don't have a lot of emissions that are generated during the construction process. Right. So speeding up that cycle time, not having, you know, 14 pickup trucks on the on the site for, you know, four months or six months, you know, working with that cycle time and then, and then build it in such a way that it can be as energy efficient and as carbon neutral as possible in the future.

01:39:19:07 - 01:39:55:13
Stefanie Coleman: Now, one thing that I'm seeing, some builders are beginning to move towards and society as a whole is electrification. So, you know, if if you go all electric and then you have solar, that's generating that, then it's you're pretty clean at that point in time depending on how your electricity comes in. But your emissions on that, that downside of the scope three that we're talking about, the homeowners behavior piece becomes quite low at that point depending on where your energy source is coming from.

01:39:55:13 - 01:40:22:28
Mike Collignon: But okay, I want to make a last call for questions from the audience. I know I've got one and I'm not being negative with you, Stephanie, but you kind of walked into this one. So you've talked a lot about energy. You talked a lot about carbon. Yeah. What about water? Water wasn't talked about a lot in this. And yeah, it's obviously a vital resource for life.

01:40:23:00 - 01:40:55:01
Mike Collignon: We've got water scarcity issues. Not even talking about water quality issues. Just just scarcity. So how do you see. And I know you said ESG is under construction. So me I'm like sitting here going, man, I hope that water ends up in this someway, somehow. But but talk to us a little about how you kind of envision water coming into this, or is it in the next version of this or I mean, where is it at?

01:40:55:04 - 01:41:08:23
Stefanie Coleman: Well, you know, that's a it's a great question. And I think it'll be interesting to see, it's sort of touched on in the Sasb standard as far as.

01:41:08:25 - 01:41:36:09
Stefanie Coleman: The, the water stress, the number of lots that are in that are in water stress. But all it does is it documents the where the builder is at with that. It doesn't necessarily address the sort of issue. So you know, I it's a good question. I didn't see it come up in the SEC part. Yet other than it could be a risk from, from a financial perspective.

01:41:36:11 - 01:41:58:13
Stefanie Coleman: So I really don't know where it's going to come up yet, actually, I guess. Well, it remains to be seen, but it is a major issue. It is something that is of concern. I mean, up here where we're surrounded by the Great Lakes, it's less of on our radar because we haven't experienced the same level of drought. Like I saw that huge number.

01:41:58:14 - 01:42:28:24
Stefanie Coleman: Like, I think Dr. Horton has over 170,000 lots that are in water stress areas. And I have seen in some areas where they won't even allow permits unless you can have guaranteed water supply to to this. So, I really don't have an answer for you on it. What I think has been focused on from the finance side, which is what I've been focusing my, my thesis on, is on the climate, the impact, the catastrophic impact of climate change as being kind of that.

01:42:28:24 - 01:42:38:12
Stefanie Coleman: Number one, we got to get that and address the carbon emissions. And then we've got all of these other issues as well that we have to deal with. So.

01:42:38:14 - 01:42:40:09
Mike Collignon: Gotcha. Okay.

01:42:40:11 - 01:42:42:07
Stefanie Coleman: Yeah. Where are you located?

01:42:42:10 - 01:43:08:03
Mike Collignon: Like any other questions. So I want to thank Stephanie for sharing all of her time and insight with us. Today was incredible topic. And it's one that's emerging. It's one that is ripe for, you know, seismic influence on the industry and one that we just can't fall asleep on. So thank you very much.

01:43:08:06 - 01:43:08:24
Stefanie Coleman: Thank you Mike.

01:43:08:25 - 01:43:33:11
Mike Collignon: I also yeah, I also want to say thank you to our audience for attending and asking wonderful questions. And thank you once again to our sponsors, Mitsubishi Electric Sonoma, Schneider Electric, Panasonic Healthy Indoor Living Solutions, Ginko Solar and LP Building Solutions for their sponsorships. Now, if you like what you heard today, this is the kind of insight and knowledge you can expect to get in the housing 2.0 program.

01:43:33:12 - 01:43:56:15
Mike Collignon: The series two workshops start on Thursday, October 19th. I know that's really far away. We are just wrapping up a series tomorrow actually, so you have to sign up for the next one. But for more information to register for that, you can go to.

01:43:56:18 - 01:44:22:10
Mike Collignon: Now. If you don't want to wait that long, that's okay, because Greenfield Media is then going to invite you to attend the Sustainability Symposium 2023 The Great Conversion. You know, it's one of my favorite events to host. We do it every year. It is a blast. And we just we discuss topics like this. And and this year we're going to explore how we can flip the script on the current national dialog to yield a radical reimagination of our culture.

01:44:22:11 - 01:44:42:04
Mike Collignon: This is going to happen on April 19th and 20. For more information, you can check your inbox for an email from Matt Power that he sent it out just this morning. But if you didn't get that, that's okay. You can always go to Greenfield and register for the symposium. Thanks again for attending everyone. And until I see you all again next month, stay safe, stay healthy and take care.