State of the Industry 2023

00:00:00:13 - 00:00:37:26
Mike Collignon: Hello. It's that time of year again. Time to celebrate National Time month. And as you can see, I am not observing today's holiday. I'm sorry. I felt ashamed now, but it's also that time of year when we take a look at the state of the industry with Sarah Gutman, co-founder and CEO of Greenville The Media. She's going to dig into cognition, smart data and give us invaluable insights into important consumer preferences, purchase drivers, and behavioral patterns, including trade and consumer perceptions about leading edge topics like decarbonization, ESG, and circularity.

00:00:38:00 - 00:00:55:23
Mike Collignon: Now, if you don't know Sarah by now, know I'm not going to sing today. I just wanted to get that song stuck in your head. You're welcome. Now, if you don't know Sarah by now, she is a former venture capitalist. She graduated cum laude from Dartmouth College and holds an MBA in Entrepreneurship and Finance from the University of Colorado.

00:00:55:24 - 00:01:21:21
Mike Collignon: She has established a reputation as a visionary, thought leader and passionate advocate for sustainability, and she works closely with a diverse group of stakeholders in the building industry to develop impactful, long term green strategies that are simultaneously sustainable and profitable. And if you don't know our sponsors by now, I'll let you know that Powershift by NV energy is a program that helps residential and business customers conserve energy and save money on their power bills.

00:01:21:22 - 00:01:31:18
Mike Collignon: Power shift is a one stop resource to find energy efficient products and services. For more information, please visit envy.

00:01:31:21 - 00:02:02:09
Mike Collignon: Shift and cultured stone products originated 60 years ago, when brothers Garrett and Floyd Brown saw the need for a new kind of building material. Today, culture Stone continues to refine their products and operations to champion the environment, to provide builders and homeowners with the precision they've come to expect over the years. Their trademark CCV stamp still appears on every product that leaves their manufacturing facilities as a guarantee to customers that they're receiving authentic, cultured stone.

00:02:02:13 - 00:02:20:29
Mike Collignon: The original stone veneer. Now you can submit questions for Sara. Simply use the questions box that you see over in the go to Webinar Control panel. I'm going to review those questions and pose those to her during the Q&A time set aside after her presentation. Sara, you are free and clear to go.

00:02:21:01 - 00:02:40:09
Sara Gutterman: Mike, thank you so much. Thanks so much for always being such a wonderful moderator. It's always a joy to work with you. And thank you also to our wizard behind the curtain. Mary Kastner marries our production manager. She makes it all happen and our business would not run without her. So, Mary, truly thank you to you for everything.

00:02:40:16 - 00:03:03:16
Sara Gutterman: Thank you also to Power Shift by Andy Energy and Cultured Stone for helping us make this work possible and as much as anything else. Thank you everyone for being here and spending time today with us to talk about the state of the industry. I'm really excited to talk about this particular topic area, and to share the data and the information that I have today.

00:03:03:18 - 00:03:24:29
Sara Gutterman: For those of you who have seen my webinars before, you know that I love cognition, which is Green Builder Media's Market intelligence and data services division. Just to remind you, for those who are not familiar with cognition, we are able to port in a couple of different data sets to then analyze and interpret into things like state of the industry.

00:03:25:02 - 00:04:02:05
Sara Gutterman: The first data set that we put in is from our audience. So we reach hundreds of thousands of progressive building professionals across the US and up into Canada. We also reach millions of early adopter and first mover consumers, the majority of whom now are millennials and older Gen Zs. It's a great, loyal and engaged audience. We're able to have a very vibrant two way dialog and discussion with them, and we're able to harvest a lot of data and information from them about predominant home owner and home buyer expectations, demands, trends, and then do a lot of predictive analysis.

00:04:02:09 - 00:04:28:13
Sara Gutterman: Because since our audience trade and consumers are early adopters and first movers, they are indicative of where the mainstream is going in the next, say, six, 12, 24 months. We also have a proprietary technology platform that's driven by artificial intelligence that mines web and social media content using contextual filters and parameters that we have built into this platform.

00:04:28:13 - 00:04:54:23
Sara Gutterman: So we're able to track trends in topic areas that are near and dear to us, like decarbonization and ESG and circularity and some of the things I'll be talking about today. And finally, we also put in market data. Now, Mike mentioned that prior to co-founding Green Builder Media, which was 19 years ago, I was in venture capital. And while there we invested.

00:04:54:23 - 00:05:23:22
Sara Gutterman: I was with a mid-sized fund. I was in Boulder, Colorado, and we invested mostly in telecom infrastructure, some biotech deals, but we also invested in organic foods and natural retail products because we were in Boulder, Colorado, and back then we called it Lifestyles of Health and Sustainability. And back then we were fringe like we were the weirdos. And, you know, you had to have a certain, you know, type of language and a certain type of person that would hear the messaging back then.

00:05:23:22 - 00:05:55:00
Sara Gutterman: But the reason why I'm going into this is I will tell you that since then, and really since co-founding Green Builder Media 19 years ago, I have never been as excited as I am about where the building industry, and specifically the housing sector is today and where it's heading, the rate rate and the pace of transformation and evolution in the industry is so exciting to me, and that's partly being driven by millennials and younger Gen Zs who you'll see.

00:05:55:02 - 00:06:35:02
Sara Gutterman: I have some data, a lot of data on them, you know, are really driving sustainability trends in the housing sector. It's also now investor requirements and also just kind of a moral responsibility that I think companies of all kinds, manufacturers, building professionals are feeling with respect to incorporating environmental, social and governance strategies, incorporating social corporate responsibility into their decision making at all levels, even down into product development, whether that is an actual product used in a house or the product as the house itself.

00:06:35:04 - 00:07:09:08
Sara Gutterman: I was at a builder conference several weeks ago, and everybody was talking about net zero carbon homes. And I'm not just talking about, you know, the leading green builders, folks like Jean Myers at Thrive or Tim O'Brien at Tim O'Brien homes. I'm talking about VP's of purchasing from Pulte and Dr. Horton and Beazer and KB and Meritage. And so I'm just so enthusiastic about the state of the industry, what's happening today, where we are and really where we're going.

00:07:09:08 - 00:07:37:05
Sara Gutterman: So with all of that build up, let's go ahead and dive into just some, you know, kind of basic market data. So we all know that interest rates are still high. Home prices are still elevated. Inflation is still having an impact on average American families. Yet with the fact that inventory is still quite low and will continue to remain low for quite some time.

00:07:37:09 - 00:08:02:01
Sara Gutterman: The building industry, the housing sector in particular, just marches on. Home sales are fluctuating. There ebbs and flows. But, you know, we're still selling homes. There was no big drop off or big eight recession or big price drop that a lot of my colleagues were fearing at the beginning of this year. So economists, builders, other kinds of building professionals.

00:08:02:01 - 00:08:35:21
Sara Gutterman: And, you know, there's we're up still year over year from last year in terms of sales and new home starts and sales are surprisingly stable. And, you know, this is partly because of that low inventory, right. But also because a lot of millennials and Gen Zs who had sat on the sidelines for longer than they had anticipated because of the pandemic, and they were competing at that time with cash buyers and still had a lot of student debt and credit card debt and loans.

00:08:35:21 - 00:09:06:19
Sara Gutterman: They are continuing to form households. They're getting into the market now at, you know, at higher rates than ever before. And those two dynamics, low inventory and high household formation rates on behalf of the younger generations, are going to continue to drive the housing sector into 2024, 25 and beyond. I think that these dynamics will positively continue to continue to positively impact the housing sector for for many years into the future.

00:09:06:19 - 00:09:33:21
Sara Gutterman: And again, we'll see ebbs and flows in, you know, month over month, housing starts and sales and price ebbs and flows as well. Right now, the median asking price for an average American home is down from a historically high rate of about 467,000 at the end of 2022, down to about 388,000. And that tends to be maybe in tertiary and secondary markets.

00:09:33:22 - 00:09:58:14
Sara Gutterman: You know, clearly some of the higher price markets or, you know, urban markets are still higher than that. But we certainly don't expect any kind of free fall in the housing market. When we ask our builders, they are certainly telling us that they're reducing home prices, maybe 1 to 3%, maybe as much as 4 to 6%. They are also offering mortgage rate by downs.

00:09:58:14 - 00:10:23:07
Sara Gutterman: They're offering free or discounted upgrades in addition to those reduced home prices. Some are providing closing cost assistance to their buyers at higher rates today than they have over the last several years in order to boost sales. But you know, what we're seeing is that about 60% of projects are offering incentives. However, those incentives actually are dropping a little bit.

00:10:23:07 - 00:10:48:22
Sara Gutterman: They used to be about at about 11% of list price, and now they're about 6% of list price. A few other just flags that we're watching in the housing sector, we have seen an increase in adjustable rate mortgages. Those are the balloon payments that got us into trouble in the 2008 recession. But because there is more home owner equity, so homeowners have more equity in their homes today than they did in the 2008 recession.

00:10:48:23 - 00:11:21:10
Sara Gutterman: Like vastly more, we do not anticipate that those balloon payments are going to impact the sector like they did during that last recession. We are seeing stronger wage growth as well. So even though housing costs are outpacing increases in wages, we're seeing that gap decrease a little bit. And then another thing that we were watching was first, first time homebuyer market share, which was at a historical low at about 15% in 2022.

00:11:21:11 - 00:11:46:06
Sara Gutterman: It's inching back up to about 27%. It's in the 45% range in a very healthy market. But again, it's kind of getting back towards normal. And we're less worried about that now than they were when than we were last year. Another interesting element to the housing sector is that builders are quite confident. 75% of the home builders that we survey.

00:11:46:06 - 00:12:16:28
Sara Gutterman: And keep in mind. These are early adopters and first movers, but they're feeling quite optimistic about the long term prospects of the market. And that's particularly because they believe that the IRA funding and even the infrastructure bill funding will have a positive impact on their business. 80% of our builder audience reports that they believe that the IRA funding is going to pull through energy efficiency and electrification, technology upgrades, and that will again have that positive impact on their businesses.

00:12:16:28 - 00:12:53:16
Sara Gutterman: Now, 85% of our builder audience report pretty stable finances and access to financing. And in a positive construction backlog that, frankly, you know, still has kind of is overflowing from the pandemic and is keeping their housing starts and production schedule pretty full, I think, to be quite honest. A lot of our builder audience, they're glad that the the frenetic pace of the pandemic has mitigated and things have kind of normalized again.

00:12:53:19 - 00:13:26:16
Sara Gutterman: But again, they're feeling fairly positive about the outlook. They are absolutely still facing challenges with respect to labor shortages, some material shortages, and of course, high material costs. Labor is is the number one challenge, though, that they report that they're struggling with now given current economic conditions. When we ask our consumer audience what they are inclined to do with respect to their homes, nearly 40% say that they want to make their homes more energy efficient.

00:13:26:17 - 00:13:51:15
Sara Gutterman: We saw this in the 2008 recession as well. Everybody became super cognizant of their expenses and particularly their utility bills. And so there was a higher willingness to invest in energy efficiency upgrades, because homeowners and home buyers were really looking at that long term total cost of home ownership, operating expenses, and the total value of home ownership, which includes resale value.

00:13:51:18 - 00:14:20:24
Sara Gutterman: So we're starting to see more interest in retrofitting homes to make them more energy efficient, and just remodeling existing homes that people are living in, rather than moving higher pensions for purchasing electric vehicles, which for builders, means be sure to make your your home's EV charging ready. And then, interestingly, also, there's a higher level than ever of interest from homeowners to make their homes all electric.

00:14:20:29 - 00:14:53:29
Sara Gutterman: And that is also in response to current economic conditions. So what that means in terms of opportunities this year and and into 2024 means lots of opportunities for energy efficiency and electrification upgrades, which is a good thing given that there are IRA rebates and incentives associated with those upgrades. We're also continuing to see enhanced interest and work from home spaces aging in place upgrades as well, especially for boomers.

00:14:54:01 - 00:15:24:21
Sara Gutterman: So things like sensors and monitors and smart home technology that will allow them to age in place. So, for example, let's say motion detectors so that an alert can be sent to a loved one or health care professional if activity is not happening in a home so that folks can monitor, say, aging parents or grandparents. And then, of course, a lot of interest in resiliency related upgrades.

00:15:24:21 - 00:15:52:03
Sara Gutterman: So climate related event disaster repair and mitigation. When we ask our builders what they're seeing, increased demand for today, it's led by energy efficiency. Healthy home is probably not surprising. A second you know a priority. And then solar absolutely a soaring and demand electrification and smaller homes resilient homes connected homes.

00:15:52:06 - 00:16:26:24
Sara Gutterman: When we ask our builder audience if they're seeing increased demand for specific products, again, a lot of high performance building envelope solutions like insulation, windows and doors, also energy efficient lighting, smart home systems and controls and heat pumps. Interest in heat pumps just absolutely growing. You know, we're over nearly at 45% for demand for heat pumps. Growth in HVAC, water heaters, clothes dryers, also growing demand, of course for solar and storage and indoor air quality systems.

00:16:26:26 - 00:16:54:05
Sara Gutterman: And that matches what our builder audience tells us that they are willing to adopt new technologies that they're willing to adopt, which actually the number one response for builders is demands and energy management systems. And that plays into partly the energy efficiency piece, but really more the energy management and electrification. So it's the interface between a home and a grid.

00:16:54:05 - 00:17:40:07
Sara Gutterman: So demand side energy management systems enable a house, or if you're looking at it at a community scale, to interact with the grid, to load shift or load shed so that homeowners can utilize their energy at off peak rates so that they are saving money and also reducing grid stress. Builders are also, you know, have a higher level of interest in adopting those high performance building envelope systems, whether those are the building envelope systems themselves, windows and doors, insulation, cool roof systems, as well as some of those electrification technologies like induction cooktop, solar and heat pumps, and then moving over to on the right hand side of this chart, gray water systems, hot water recycling

00:17:40:07 - 00:18:06:05
Sara Gutterman: systems and other types of water conservation systems. Now, all of these trends play very well into today's kind of typical home buyer. I think for anyone who has heard me speak in the last couple of years, you've actually seen this chart. I love to use it. It's not a cognition chart, actually. It's from correlation. It shows home purchase applications in 2022.

00:18:06:05 - 00:18:30:11
Sara Gutterman: And so the blue line is comprised. It shows millennial home purchase applications which is continuing to grow and will continue to grow. You can see there's a little bit of a plateau, but those growth rates will continue to grow as opposed to the red line, which is Gen Xers, and the yellow line, which is baby Boomers. And those numbers are going down largely because those generations are in their forever homes.

00:18:30:11 - 00:18:52:09
Sara Gutterman: But the, the, the, the orange line is the one that I have my eye on. Those are the Gen Z. They're just starting to hit the housing scene. But you can bet that those numbers are going to increase substantially, exponentially in the next handful of years as Gen Z continue to have a larger influence on the housing market.

00:18:52:09 - 00:19:16:14
Sara Gutterman: And again, this is a slide I use a lot. These are some of the only ones that I've reused from previous presentations. But the good news is that where we have the largest inventory gap, which is in this missing middle segment, so it's really about 70% Ami or average median income up to about 170%. This is where those millennials and older Gen Z are looking for homes.

00:19:16:14 - 00:19:54:07
Sara Gutterman: They don't necessarily need affordable housing, and they definitely don't want the million dollar plus McMansions. But we're about 3.2 million units short in this missing middle segment. And that matches with what today's home buyers, again, millennials and Gen Zs is looking to buy. Now, about 68% of our builders tell us that they are either fulfilling or planning to fulfill this missing middle housing segment, which is really good because this segment has been largely ignored for probably a couple of decades, we can fairly say.

00:19:54:09 - 00:20:20:13
Sara Gutterman: And so there's absolutely and decisively been a shift in the type of product that builders are willing to to design and construct and deliver today, which is incredibly important in and of itself for solving the inventory crisis. However, this is the rub, okay? And this is the last piece, the last slide that I've repurposed from previous presentations. And I think everything else is new.

00:20:20:13 - 00:20:55:06
Sara Gutterman: But here's the rub. And I say this in every presentation because it's really, really important to beat this drum and just keep beating and beating and beating it, which is if we are just building to lowest price per square foot and we're just building to code, which means we are legal and that's it. We're basically building tomorrow's slums and we are not creating housing that is either going to serve as a panacea for health and wellness, or is going to create generational wealth for not just the first homebuyer, but subsequent, you know, second, third, fourth, fifth homeowners.

00:20:55:06 - 00:21:20:00
Sara Gutterman: We are not going to be able to utilize housing to solve our climate issues. We're not going to be building houses that are resilient and can withstand nature's fury. So we really have to pivot and rethink the way that we design and build homes and communities in order to solve for all of these challenges. The good news is that we know how to do it, and the better news is that it's actually happening.

00:21:20:00 - 00:21:44:14
Sara Gutterman: So let's talk a little bit more about that. Before I go into the specific housing trends, I want to just talk about, you know, a couple high level elements. Again, anyone that's heard me present recently in the last couple of years knows that I like to beat this drum as well in terms of the rise of ESG and how it's really become mission critical for businesses throughout our economy.

00:21:44:14 - 00:22:41:09
Sara Gutterman: So environmental, social and governance, if you're not familiar with ESG and ESG right now, is being adopted by, let's say the majority of large publicly held companies across not just the US economy, but internationally, mostly because of ratcheting requirements. The EU now requires large public companies to report scope one, scope to, and scope three emissions. And if they're doing it there, it's coming here soon within the real estate and building industry and specifically the housing sector, environmental, social and governance is applied to projects in ways like, for example, if we're talking about environmental, you know, we're going to look at the environmental impacts of a home or a community or a development.

00:22:41:10 - 00:23:17:06
Sara Gutterman: How does that project impact habitat? How is wastewater treated? Are there emissions? What are those emissions? You know, a lot of environmental related questions in terms of social. The questions are around how does a project impact not just the residents and the occupants of that community or development or home or building, but surrounding neighborhoods? Can that community offer amenities like walking trails and community gardens and co-working spaces, or retail space that actually brings benefit to the surrounding neighborhoods?

00:23:17:06 - 00:23:48:14
Sara Gutterman: And then in terms of governance, the questions are around how does each company that participates in this project, governance itself, do each of those companies have ESG practices? Do they have ESG oversight? Do they have milestone based bonuses for their executives and their boards? And I think what's really important with respect to ESG right now in the building industry is that this isn't just something for manufacturers.

00:23:48:14 - 00:24:18:12
Sara Gutterman: We are seeing a large pull through from builders, even the large production builders, to make sure that their entire stakeholder and value chain has an authentic ESG story. And I'll show you some some data points here in just a second. But my advice to anyone in the building industry that's not already thinking about ESG is you better hop on that train, because it's pretty much already left the station.

00:24:18:12 - 00:24:47:12
Sara Gutterman: And whether it is requirements from retailers for manufacturers to have ESG strategies to have environmental product declarations, which we're starting to see more and more from the big box retailers as well as large distributors, whether it's the builders themselves requiring ESG strategies so that they can reflect it in their own reporting, or whether it's lenders or investors, these requirements are coming.

00:24:47:14 - 00:25:13:21
Sara Gutterman: We're just seeing them in the nascent phases. We're starting to see bills passed, like in California, that are going to start requiring climate risk disclosure, probably scope one, two and three, at least one and two. But that trickles down not just to the very large companies that that literally have to report on these things, but the smaller companies that serve them in order for the whole value chain to be authentic.

00:25:13:24 - 00:25:45:08
Sara Gutterman: But ESG isn't just some kind of, you know, high. You know, level, you know, kind of fluffy topic. It is here in terms of consumer demand as well. So when we ask our consumer audience, they are more likely they believe that companies with ESG practices are more likely to have long term financial success than those without. They have stopped purchasing products from companies that don't have ESG and sustainability practices.

00:25:45:12 - 00:26:20:13
Sara Gutterman: They are more likely to choose homes and residences and buildings that have ESG practices, like building certification, products with product certification, electrification. You know, they're all electric, they're healthy, and they have sustainable materials. But this chart on the right is actually the most interesting to me. And it shows that consumers perceive whether this is true or not. They perceive that companies with strong ESG practices have higher quality products and services than those without.

00:26:20:13 - 00:26:45:21
Sara Gutterman: So there is a tie in, at least in perception, with corporate sustainability and quality of products and services. Now switching over to builders, I was talking about builder adoption of ESG, and the main three reasons why builders are adopting ESG is increased access to capital, consumer demand and investor demand. So it has a lot to do with access to financing.

00:26:45:21 - 00:27:30:15
Sara Gutterman: And in the chart in the right, you can see that 55% of our builder audience is telling us now that when they go to access financing, they go to apply for a construction loan. Their lenders are now requiring certain types of ESG practices and policies. So that's dramatically different even from a few years ago. And here's the chart that I was alluding to earlier, when we asked our builder audience why they're looking to create a sustainable supply chain, their vendors, their service providers, whether that's a manufacturer or hers rater or an architect or a designer, they are trying to establish sustainable supply chains so that they first and foremost, can access accurate and reliable data

00:27:30:15 - 00:28:01:10
Sara Gutterman: for their own disclosures, their own ESG or corporate sustainability, or just annual reports. Next, to develop more innovative products and solutions, but then also to prevent greenwashing and to address external pressure from both investors and consumers. So in our recent state of the industry survey, and, you know, most of this data is coming from that, then I'm going to be showing you, we ask which environmental initiatives our builders are engaging in.

00:28:01:10 - 00:28:44:13
Sara Gutterman: And the number one environmental initiative is building energy efficient homes. The next is looking at the circular economy. So looking at adaptive reuse, retrofitting, building smaller and dematerialization and then reducing emissions from their own company operations, minimizing waste and looking at incorporating onsite renewables. In terms of social initiatives, they are largely implementing programs to retain employees and heightened employee satisfaction, promoting diversity, equity and inclusion or die, and then implementing universal design principles to promote promote more accessible housing.

00:28:44:15 - 00:29:27:23
Sara Gutterman: In terms of governance, they're implementing environmental health and safety programs, adopting code of ethics policies, and implementing board compensation and oversight for ESG practices to ensure that whatever they're saying that they're doing with respect to ESG is actually happening. We also all know that the conversation within the housing sector is shifting from net zero energy, which is really a measure of operational energy, to net zero carbon, which tracks everything from raw material extraction for products used in a home or building, to transportation to manufacturing and more transportation, to installation, to operations all the way through to end of life use.

00:29:27:23 - 00:29:57:20
Sara Gutterman: And again, net zero carbon is just growing like wildfire. In terms of the housing sector, I cannot believe the level of executives and at these large production builders who I personally am having conversations about net zero carbon and creating net zero carbon homes. So this is the real thing, because I and I know because I'm having these conversations literally on a daily basis, it's so exciting going back to our consumers, when we ask them, they absolutely believe that decarbonization.

00:29:57:20 - 00:30:32:27
Sara Gutterman: And we're going to kind of equate decarbonization strategies in general with building net zero carbon homes and communities, create positive brand equity, result in enhanced innovation, mitigate risk and create loyal employees, loyal employees and customers. So there's really no doubt in our early adopter and first mover consumer minds that decarbonization is a positive thing, and they themselves are trying to decarbonize their lifestyles by driving electric vehicles, increasing the energy efficiency of their homes, reducing waste, turning their homes all electric and installing solar.

00:30:32:29 - 00:31:02:08
Sara Gutterman: So they're taking action and making these investments, and they're telling us that they are willing to pay more for decarbonized solutions and packaging and vehicles and apparel and even homes. So this is a weighted average you can see. But, you know, homes are definitely on that consideration set. They're not number one, but they're not zero either. When we ask our builders if they think decarbonization is helpful to business, about 58% say that it is.

00:31:02:14 - 00:31:32:21
Sara Gutterman: I will say that helpful to businesses growing harmful to business is decreasing, neutral and not sure about staying the same. But of the people that say that they believe that decarbonization is harmful to business, usually it's a fear. It's kind of the pushback we're seeing against ESG in general, which is, you know, a fear that decarbonization strategies are requiring businesses to make some economic decisions that aren't best for the bottom line.

00:31:32:22 - 00:31:57:20
Sara Gutterman: However, what we are seeing, and this is reported to us by our builders, who let's say I'll use a specific example. There's a builder in the South that is a fairly conservative and traditional builder that, you know, I've been trying to have decarbonization discussions with. I really like this particular builder. And, you know, first they thought it was hogwash.

00:31:57:20 - 00:32:30:15
Sara Gutterman: But then as they started recognizing that by building resilient housing, by building resiliency into their own businesses, they could actually leverage decarbonization strictly to mitigate business risk and to enhance the value to their customers as those customers experience more super storms and hurricanes and flooding. And so they started looking at decarbonization strategies as, again, risk mitigation, as opposed to just straight out dollars for dollars, you know, how does this return an eye?

00:32:30:18 - 00:33:00:05
Sara Gutterman: So I think there is absolutely a shift in thinking around decarbonization and certainly ESG. Now this slide just makes my jaw drop to the floor. I am so happy about this. This came from, you know, this recent state of the industry survey which we just closed right now. Our builder audience tells us that failure to mitigate and adapt to climate change is their top global risk of highest concern, pretty much on par with economic instability, which I get.

00:33:00:05 - 00:33:33:28
Sara Gutterman: These are uncertain times. The building industry is a hard business, but for builders to really get to the place where, you know, they're their top global risk of highest concern is failure to mitigate and adapt to climate change. This has been a response that millennials have told us for years is their top global risk of highest concern. But now builders are telling us that as well, more so than, you know, wars in the Middle East, in the Ukraine, Covid, gun violence, terrorist activity.

00:33:34:00 - 00:33:57:21
Sara Gutterman: I always say when I talk about this chart that I wish water was higher in, you know, in there the list of top global risks. Just because I think it's the our issue that we have yet to solve for that we must solve for it's our critical issue of the moment. But you know, I'm happy to to see what builders are saying about climate risk mitigation.

00:33:57:28 - 00:34:32:00
Sara Gutterman: Now let's switch and talk a little bit more deeply about some of the builder data. This is just to show you that this survey was representative of a spectrum of different types of builders, from affordable to production to multifamily builders, and included other types of building professionals like architects, contractors, etc. and a whole spectrum of different types of building types from move up and entry level to entry level and move up, I should say, to custom luxury all the way to to multifamily.

00:34:32:02 - 00:35:05:12
Sara Gutterman: And keep in mind again, the respondents to this survey are not just code builders, they're building to higher green standards like the National Green Building, Standard Energy Star and the net Zero Energy Ready Homes standard. And we are definitely seeing increases in Energy Star and Zero Energy Ready Homes programs implementation, mostly because of 45 L, which is the incentive that builders can qualify for through the Inflation Reduction Act.

00:35:05:12 - 00:35:38:04
Sara Gutterman: So it's $2,500 per home for an Energy Star home, and $5,000 per home for a zero energy ready homes project. And that also applies to multifamily units as well. And those numbers actually bump up for multifamily units if they hit a threshold income requirements. So if so, those bump up from 2500 for Energy Star to 5000. So builders tell us that millennials are largely buying their homes.

00:35:38:04 - 00:36:03:19
Sara Gutterman: 55% say it's millennials followed by Xers boomers. And then again Gen Z are just hitting the housing scene. So this corroborates that chart. The home purchase applications chart that I showed earlier. Builders are reporting that again, material prices, inflation and interest rates, labor challenges, mortgage rates, land costs, material availability, prospective home buyer access to mortgages, and access to financing.

00:36:03:19 - 00:36:27:07
Sara Gutterman: These are all kind of the main things that are impacting their ability to sell homes. And they also report that they are curbing spending in areas like staffing, sustainability upgrades for their projects. And so I get a lot of questions around, okay, well, what sustainability upgrades are they cutting? It's not so much the energy efficiency or electrification or even healthy home upgrades.

00:36:27:07 - 00:36:52:29
Sara Gutterman: Those are kind of sacred. What we're seeing is some more of the advanced like smart home applications that builders are just saying, look, we're not going to invest in this and try to sell this as an added value or, you know, including into even a higher price. We're just going to let the consumers deal with that. Even things like leak detection and water management systems that maybe they had thought previously about including.

00:36:52:29 - 00:37:17:22
Sara Gutterman: But now they're just saying, you know what? That's a that's a home buyer homeowner issue. But the energy efficiency upgrades, again, in electrification and healthy home upgrades, those tend to be pretty sacred. Maybe they're not getting quite to as high levels of performance in windows doors. You know, insulation is you know, they may have an heading for economic times.

00:37:17:22 - 00:37:40:08
Sara Gutterman: But again, those those types of upgrades still remain pretty sacred. And we're seeing again that the builders are having to cut back. You know, over 50% are saying that they're cutting back less than 10%. You know, 35 ish percent are saying they're cutting back from 11 to 20%. So, you know, that's a pretty good chunk of the bottom line.

00:37:40:11 - 00:38:02:25
Sara Gutterman: So it is, you know, a relatively conservative market right now for those builders. Now the next couple of slides are interesting. When we ask our builders how interested they're making, how interested they are in making their homes healthy. And that's your energy prefab net zero carbon. Those are some of the leading responses from builders. And I have to qualify.

00:38:02:27 - 00:38:32:14
Sara Gutterman: Prefab is not always necessarily an entirely, you know, built prefab home that's delivered on site. It could be a wall system or a bathroom or a kitchen kit. So something that's built off site, but again, not necessarily an entire home. But take a look at this. And now when we ask our builders how how much demand they're getting from their home buyers for these same topics, you see resiliency really bumps up in interest.

00:38:32:15 - 00:38:57:05
Sara Gutterman: Same interest in healthy homes. Electrification bumps up. Interestingly net zero energy goes down a little bit. But prefab is also very high. And then when we ask our builders if they are considering additional or new product lines to address the changes in the housing market, modular and prefab. And this does mean ADUs or complete prefab homes, not just the kits.

00:38:57:07 - 00:39:28:22
Sara Gutterman: You know, 38% are interested in considering that as a new product line. And our builders are also looking at going into multifamily affordable housing, using IRA or other government subsidies, remodeling and townhomes. About 60% of our builders tell us that they advertise their homes as resilient because of the impacts of climate change and the increase in frequency and intensity of climate events.

00:39:28:27 - 00:40:05:05
Sara Gutterman: And this is an interesting chart. So what I have here is the green line is what builders tell us that their clients will pay for sustainability upgrades if those upgrades lower cost of total home ownership over time. The middle brighter blue line is all consumers, so it's really boomers. I've taken out traditionalists and alpha generations. So traditionalists are older than boomers and Alpha are younger than Zs because those generations right now have a lower impact on the housing sector.

00:40:05:05 - 00:40:31:08
Sara Gutterman: So I've really focused on boomers, Xers, millennials and Zs. So the bright blue is all consumers boomers, Xers, millennials and Zs. And the dark blue is just millennials and Zs. So you can see that millennials and Zs alone say that they are more willing to invest in energy efficiency, electrification, healthy home resiliency, water conservation, smart home and solar plus storage upgrades more so than all consumers.

00:40:31:08 - 00:41:05:02
Sara Gutterman: So when boomers and extras are included, and also certainly more so than what builders think that they will invest. Now, when we ask our builder audience if they are planning to use IRA funding, over 60% say that they are planning on using IRA funding for upcoming projects specifically for energy efficiency and electrification technology upgrades. And they also say about 60% say that the IRA has influenced their decision to adopt more energy efficient practices and renewable energy sources, and specifically our build.

00:41:05:02 - 00:41:33:09
Sara Gutterman: Our audience tells us that they are using IRA incentives to install things like induction cooktops, solar systems, heat pump systems and technologies for HVAC, water heating and dryers. And we can see that about 55% report that they are not having an issue getting insurance for their projects because of climate events, but about 45% are telling us that they are.

00:41:33:09 - 00:42:04:27
Sara Gutterman: And that went from, you know, a very small percentage to 45% in a very short period of time over the course of the last couple of years, as we're seeing more and more insurance companies wholesale leaving certain states, Florida, California, Texas, because of that increasing frequency and intensity of climate events. So now we are starting to see that have an impact on builders, on developers, on folks that need to get insurance for their projects.

00:42:04:28 - 00:42:31:08
Sara Gutterman: I'll show you the flip side of this in a minute when we get into our consumer insights. Speaking of which, now I'm going to shift gears and share information from our state, our recent state of the industry survey that again, just closed about a week ago. So first, you know, we just kind of wanted to gauge how homeowners and homebuyers or aspiring homeowners are faring in today's economy.

00:42:31:08 - 00:42:54:19
Sara Gutterman: And so we can see kind of across the board when we break this out generationally, that boomers, Xers, millennials and Zs are all scaling back on things like dining out, entertainment and travel. And, you know, for the most part, each of the generations say that they're having to cut back by around 11 to 20%, which, again, is just like with the builders who are kind of in that same category.

00:42:54:21 - 00:43:17:02
Sara Gutterman: You know, that's a fair amount to have to cut back on. So homeowners and consumers are certainly feeling the pinch. We thought we knew that kind of know. We know that now Xers in some ways are actually getting hit the hardest, partly because they are a sandwich generation. And so a lot of Xers are taking care of parents and children and in some cases, even grandchildren.

00:43:17:04 - 00:43:41:29
Sara Gutterman: And so they're struggling with things like daily expenses. Millennials and Gen Z's, you know, are struggling with things like child care. Home renovations also seems to be a struggle for Boomers and Xers and Gen Zs, maybe a little less for millennials. And interestingly, in the chart on the right, it's the Xers that are most pessimistic about the economy.

00:43:41:29 - 00:44:14:22
Sara Gutterman: So about 60% believe that the economy is getting worse, whereas Zs seem to be the most optimistic, where they have about 40% think that the economy is getting better. Now, I put these charts into this presentation just to show that, generally speaking, when we ask our consumer audience what they think is the number one metric to define success having a family, a happy family life, a career achievement is still high for Gen Zs, which makes sense given where they are in their careers.

00:44:14:28 - 00:44:51:21
Sara Gutterman: Inner peace is more important for Boomers and Xers again, which makes sense given where they are just in their life. Evolution. But interestingly, owning a home is a little bit less of a priority for Boomers and Xers, presumably because a larger majority of them already own homes, whereas it's a larger priority for millennials and Gen Zs. And then for those of us who employ Millennials and Gen Zs or our Millennials and Gen Zs, the most attribute of most important attributes of jobs to Gen Z is freedom of flexibility and the ability to support hobbies and other interests.

00:44:51:21 - 00:45:22:11
Sara Gutterman: Whereas for boomers, Xers and millennials, it's the ability to support families and a pathway to financial success. We can see in this chart that Millennials and Gen Z are more inclined to wait and see what interest rates and the economy are doing for a few months before they get into the home buying process. Whereas Boomers and Xers report that they own a home and they're either happy with it as is, for they plan to remodel.

00:45:22:14 - 00:45:50:01
Sara Gutterman: Now this chart. I've been beaten this drum for almost 20 years, which is and I mentioned it earlier, that we have to shift our thinking from just looking at lowest upfront cost to full value of home ownership, total cost of home ownership. And I'm really happy to say that boomers and millennials will say, you know, boomers now tell us that long term value and operating costs are more important than upfront cost.

00:45:50:02 - 00:46:18:16
Sara Gutterman: Millennials are about 5050. Again, that number you know, the long term value number has grown over time. It's it's not surprising that extras are still a little bit more focused on upfront costs. Given that again we saw that they're getting hit the hardest right now in the economy. And because Xers interestingly got hit the hardest in the 2008 recession, they lost about 80% of all generational wealth in that last recession.

00:46:18:16 - 00:46:37:26
Sara Gutterman: And that has made them into more conservative home buyers. And then Gen Z, as you can see, you know, 70% are still focused on upfront costs. And that makes sense to because they're younger and, you know, they're early on in their careers, they're still grappling with they're still some of them are still accumulating student loans and credit card debt.

00:46:38:00 - 00:47:08:02
Sara Gutterman: So they're not in a place where they can really focus on, you know, the long term value as much. But what's interesting is that the the desire to own a home is fairly equal across boomers, Xers, millennials and Zs. However, the younger generation, the more they are considering moving due to climate change, the more they are concerned about climate change impacting the value of their home, and the more they are reporting problems getting insurance for their homes.

00:47:08:02 - 00:47:30:21
Sara Gutterman: So we saw this with builders. You know, that a growing percentage are reporting problems getting insurance for their projects. And here 77% of Gen Z are reporting that they're having problems getting insurance for their homes because of climate events. That's interesting to me, given that, you know, again, while they're just hitting the housing scene, they are growing in importance.

00:47:30:27 - 00:48:04:15
Sara Gutterman: Now, let's look at generationally that willingness to invest in sustainability upgrades, if they will. Those upgrades will lower ongoing cost of home ownership over time in every category energy efficiency. Electrification, healthy home water innovation. On this next chart here. Solar and storage. Smart technology resiliency products in every category. Millennials and Gen Zs have more of a penchant for investing in those upgrades than Boomers and Gen Xers.

00:48:04:15 - 00:48:23:04
Sara Gutterman: And again, those levels are higher than what builders think that they will invest in. So lots of interest. And then I've shown this. This did not come from our state of the industry, but this is kind of a constant question that we're asking. Over time, 100% of our Gen Z audience reports to us that they want to live in all electric home.

00:48:23:05 - 00:49:05:07
Sara Gutterman: There's no ambiguity here, because to them, all electric homes mean the Teslas of the housing sector. And who doesn't want to live in a housing version of a Tesla? They say the same thing about prefab homes as well, because they equate prefab with high performance, precision ered, healthy homes. When we ask our consumer audience what they will invest in to make their homes all electric, it's heat pump, HVAC, solar, smart thermostats, heat pump, water heaters, and 91% of our consumer audience say at least that they plan to use IRA rebates and incentives to fund energy efficiency and electrification technology upgrades in their homes.

00:49:05:07 - 00:49:37:10
Sara Gutterman: That means big opportunity ahead for builders and contractors who are interested in and willing to learn and upgrade their own skill sets and understand, if they don't already, what those upgrades are and how to specify and install them. So just wrapping up, in terms of 2024, we anticipate that the market affordability will improve slightly. We don't anticipate, you know, huge market corrections next year.

00:49:37:11 - 00:50:05:05
Sara Gutterman: We think we'll continue to see prices drop a little bit, maybe 1.5 to 2% on average. Mortgage rates are expected to drop slightly. You know kind of on average depending on, you know, markets and, you know, time of year, we'll see 6 to 6.8%. I think the end of 20 2024 is expected to end around 6.2%. We do think that that lock in effect will persist.

00:50:05:10 - 00:50:35:25
Sara Gutterman: So that means, you know, the homeowners that locked in low mortgage rates during the pandemic, they'll stay in their homes. So again, lots of retrofitting and remodeling opportunity there. But what that does is it continues to drive the low inventory rates and the housing shortage. Inventory shortage, which means, you know, still good news for the new construction market, because if existing homes aren't selling, we need new homes to address that continued household formation rate.

00:50:35:27 - 00:51:00:25
Sara Gutterman: We do anticipate the economy to, you know, remain fairly strong. We don't anticipate any massive recessions or jobs, and we do foresee income growth and wage growth to match, you know, the increase in home prices. So we may, for the first time, start seeing increased wage growth and a drop in home prices. So an inverse curve from what we've seen over the last handful of years.

00:51:00:25 - 00:51:27:03
Sara Gutterman: And just in general, we think that the, you know, home sales will continue to grow. But the other important thing for 2024 is the shift in power. The power shift that's happening right now. I talk a lot about this in my generational marketing presentations. Something very interesting is happening in the West in general, and particularly here in the US.

00:51:27:03 - 00:51:59:27
Sara Gutterman: So boomers who have worked for longer than generations older to them are retiring in droves. So we're seeing a leadership change from boomers holding the majority leadership positions and businesses and politics in society in general to Xers, millennials and Zs, we're also seeing a massive transition in in wealth. So tens of trillions of dollars are being transferred from older generations to younger generations.

00:51:59:28 - 00:52:30:23
Sara Gutterman: And as that's happening, the inherent sustainability ethic that younger generations have is impacting the way that we as a culture, as a society, as a business community are making decisions. And so that is already starting to have and will continue to have an impact on expectations for companies and businesses and organizations of all kind across our economy, but particularly in the building industry.

00:52:30:23 - 00:53:05:29
Sara Gutterman: And so we're really shifting from this model of extracting value by exploiting people in nature to one that actually creates value by enriching the lives of all stakeholders and the environment. And when I say stakeholders, that means everyone from, you know, board and executives to employees to customers to other supply chain partners. We talked about this earlier with respect to ESG reporting and having access to accurate and transparent data.

00:53:06:01 - 00:53:36:17
Sara Gutterman: So there's more connectivity today than ever. Not just with respect to some of those reporting requirements, but expectations. We're starting to see companies like Walmart require that the companies that sell through Walmart have very solid and strong ESG reporting, environmental product declarations. We're starting to see more of those expectations from building product distributors and again, builders themselves. So it's an exciting time.

00:53:36:17 - 00:54:13:29
Sara Gutterman: So what I'm going to leave you with is that, you know, if you are a business owner or a business influencer or just work for a business, it's really time to, you know, lead or be forced to be left behind, if you know what I mean. It's time to really ask ourselves those hard questions. And not just theoretically, but to sit down with our teams and to ask ourselves, you know, what is our role in the urgent need for enhanced environmental and social challenges?

00:54:14:01 - 00:54:43:08
Sara Gutterman: How is our leadership, whether you are part of that or not, really creating authentic strategies to address our environmental and social justice issues, you know, is your company in line with expectations of your consumers and your employers, and now your supply chain partners and your lenders? You know, we're seeing a lot of innovation. I need to give a shout out to our sponsors.

00:54:43:10 - 00:55:10:13
Sara Gutterman: You know, envy energy is one example. They are shutting down their last coal plant. I believe it's next year, which is so exciting. They're ramping up their renewable energy. They're putting electric busses in Las Vegas and in school districts. Cultured stone. I'm going to shout them out to you. So thank you as a sponsor. But you know, they are creating solutions for to enhance the resiliency and the durability of our homes.

00:55:10:13 - 00:55:44:02
Sara Gutterman: They're addressing indoor air quality when they're putting their manufactured stone inside of homes. You know, are your companies actually designing your products, whether those are literal products or homes as a product or even services as a product for sustainability, for decarbonization, for environmental, social and governance, for circularity. And looking at that whole life cycle. And what I would advise to you is that, again, if you're not already having these discussions, it is past time.

00:55:44:05 - 00:56:15:24
Sara Gutterman: If you are already having these discussions, good for you and it's time to ramp them up because I think, you know, sustainability is inevitable. And, you know, I think that now more than ever, as I said at the beginning of the webinar, I am so excited about the rate and the pace of change that's happening. And, you know, I think it's up to all of us now, not just to be a part of the solution, but to be in the lead of the solution.

00:56:15:24 - 00:56:40:10
Sara Gutterman: And to talk about this with everyone in our companies and everyone in our supply chain. And I think that is how we will be able to reach our climate goals. I will tell you, meeting goals by 2030 is not fast enough. If we are going to stay under 1.5 degrees and you can agree with me or not, and you can agree that this is as urgent as I think it is or not.

00:56:40:10 - 00:57:05:04
Sara Gutterman: But if nothing else, because of consumer demand, because of investor demand, because of stakeholder demand, because of risk mitigation, I think that sustainability, ESG, decarbonization, all of these things I talked about, they just make good business sense. They yield a positive ROI. So that is my presentation for the day. Mike, I'm happy to field any questions that folks may have in the next.

00:57:05:08 - 00:57:11:14
Sara Gutterman: Oh, ran a little bit over then I wanted to, but maybe we'll take, you know, five, ten minutes and answer any questions that have come up.

00:57:11:17 - 00:57:36:22
Mike Collignon: Interesting. You're mentioning a different kind of green, right. The financial green as opposed to the environmental green. Both can be very influential though for for people's purchase power and purchase decisions. I wanted to get to a couple of questions here, Sarah, that we've got from our audience. So Eric wanted to know and this is kind of context for the audience.

00:57:36:24 - 00:57:44:16
Mike Collignon: Are the survey results that that you were conveying? Are those limited to green building media readers?

00:57:44:18 - 00:58:20:25
Sara Gutterman: Yes. So the survey results that I showed are from our recent state of the industry survey, and that is comprised of early adopter and first mover consumers and progressive building professionals that that comprise our audience. So this is certainly the leading edge of the industry. And as I mentioned earlier, where our respondents, our today is, generally speaking, where the mainstream is heading in the next six, 12, 24 months.

00:58:20:28 - 00:58:21:19
Sara Gutterman: Yeah.

00:58:21:22 - 00:58:27:17
Mike Collignon: And Eric adds the comment that he wishes we could get the whole industry to think about these issues the way that your readers do.

00:58:27:18 - 00:58:34:07
Sara Gutterman: So thank you. Me too. Let's do it. I mean.

00:58:34:09 - 00:58:47:14
Mike Collignon: Keith had a question in regards to products from China, the products that are made in China. What is your opinion on products made in China given their political situation?

00:58:47:16 - 00:59:21:07
Sara Gutterman: That's a really good question. So I'm a big fan of products made in the USA. However, you know, I understand the reality of products that are made elsewhere. I think that just in general, if we can specify products made in the USA or in North America, that has a better sustainability story with respect to carbon emissions from transportation.

00:59:21:09 - 00:59:52:21
Sara Gutterman: Generally speaking, there's probably a better, you know, kind of worker rights and human rights story. I'm going to not make a political comment on this webinar just because it's not the appropriate venue. However, if you want to shoot me an email, I'm happy to have a much longer discussion about about that. But, you know, I think that, you know, China has optimized manufacturing processes in certain ways.

00:59:52:24 - 01:00:21:05
Sara Gutterman: And I think that there are some regulations right now that are being placed on certain industries to enhance the sustainability of those products. Again, this is a much longer debate than I think we can get into. It's a very complex issue, and there's a lot to unpack here. Generally speaking, though, as I said, like from a sustainability standpoint and just from a patriotic standpoint, I think that there's a lot of options here in the USA.

01:00:21:06 - 01:00:43:03
Sara Gutterman: Even companies like will say Genco Solar. They have a manufacturing plant in Jacksonville, Florida that adheres to a very high level of sustainability. So I think there's a lot of options, you know, that we can't get here in the US. I'm punting a little bit on that if you can tell, but purposefully so.

01:00:43:05 - 01:01:00:26
Mike Collignon: Well that's all right. Your information was put up on there. And this recording will be available on Green Building Media's YouTube channel. So in case you missed that slide, you'll be able to look back at it and watch the recording and get Ahold of Sarah. I do have a question for you, Sarah. I feel like we can't avoid it.

01:01:00:29 - 01:01:15:01
Mike Collignon: Cop 28 is going on right now, and it could really cast a long shadow over future data that you share with us. Care to give any predictions as to what might come out of the UAE?

01:01:15:03 - 01:01:45:29
Sara Gutterman: Yeah. Great question and thank you for bringing it up. I actually meant to bring it up in my presentation, so it was remiss of me not to. All right. So first and foremost, can we say that a climate climate conference meeting talk, whatever you want to call it, that is located in Dubai and is presided over by the United Emirates, the president of the United Emirates oil company.

01:01:46:00 - 01:02:30:17
Sara Gutterman: Is that even legitimate? Right. I think there's a basic, very real question that we need to ask about climate talks that are presided over by a fossil fuel executive. Right. First and foremost, I think the verdict is out. I think we've already seen in the last, you know, almost a week that that the meetings have been held, that there has been pressure by rich countries to not go with a full scale phase out of fossil fuels, but rather go with language around phase down, which, you know, again, I'm kind of a hard liner here.

01:02:30:20 - 01:03:13:24
Sara Gutterman: We need a phase out, plain and simple. Wholesale, we need full scale decarbonization. So I think that sticking with soft language around phasing down fossil fuels, particularly coal, versus phasing out fossil fuels, is not acceptable. I think that we're also seeing a lot of activity, and I think positive activity around the funding for developing countries that are most vulnerable to climate events and that are feeling the impacts of climate change the most.

01:03:13:26 - 01:03:42:25
Sara Gutterman: You know, I think that we've seen big commitments actually from Saudi Arabia and Germany, the US, Britain actually made a nice sized commitment, I think. And then the US basically, you know, like put in a pittance, which is like $17 million or something. That was like, if you think about everything that the US spends on defense versus, you know, climate risk mitigation, it was like I just kind of my shook my head.

01:03:42:25 - 01:04:05:25
Sara Gutterman: It was kind of a pittance. But that loss and damage fund is what it's called. You know, I think that there's a lot of interesting things that are going to come out of that, and we are starting to see commitments for that. You know, I think that some of the small island nations are really lobbying not only for the actual commitments of real dollars, which they've been fighting for, and now starting to see which is a good thing.

01:04:05:27 - 01:04:25:04
Sara Gutterman: But there's also arguing over who is going to manage that loss and damage fund. A lot of the developed countries have said, okay, let's just give it to the world Bank. But the smaller countries are saying, no, let's not give it to the world Bank because the world Bank charges high interest rates. And basically we're going to be charged high interest rates for our own disasters.

01:04:25:04 - 01:04:51:22
Sara Gutterman: And that's not okay. So there's some squabbling over that. You know, I think that there are other topics around well, in the building industry. You know, I think a lot of stakeholders are trying to get firm commitments to, you know, double and triple respectively, the amount of renewable energy adoption or the pace of renewable energy adoption and energy efficiency requirements in the built environment.

01:04:51:27 - 01:05:24:14
Sara Gutterman: And so a lot of the delegates that are there are pushing for a global commitment for a variety of things, including, again, enhanced renewable energy and energy efficiency requirements, as well as electrification of transportation and kind of reimagining manufacturing and industrial practices, as well as more regenerative agricultural practices. There's a whole list of other things I just wrote a blog on this last week.

01:05:24:20 - 01:05:52:14
Sara Gutterman: I'll write some more about it next week once we have some more of the outcome of the Cop 28 meetings. So, Mike, that was a very circuitous route to get to my real point, which is progress is being made. I think it's going to be limited based on, frankly, where this round of climate talks is happening and the influence that the people presiding over these talks have.

01:05:52:17 - 01:06:24:24
Sara Gutterman: And I think that that will be ultimately to the detriment of the planet and everyone and everything living on the planet. But we're getting there. Do I think it's happening fast enough? Absolutely not. You know, do I think we need more leadership at all levels, especially us on the all of us on this webinar, like every single one of us matter and count and need to take a stand and need to march literally and figuratively, every minute of every day for climate action if we're going to get there.

01:06:24:26 - 01:06:56:10
Mike Collignon: Well, I found it interesting, too, that the number of representatives for oil and gas industry had quadrupled at this particular meeting compared to the last time they met. To me, that kind of signals that there's a lot of panic and concern and worry that. Oh, you know, are they going to shut this, shut us out and.

01:06:56:12 - 01:07:19:02
Mike Collignon: You know, it kind of sounds like a defense of fossil fuels. But what I really am trying to get across, everybody is I think they see the writings on the wall. And to me, that represents positive traction, that they're so panicked that they had to spend four times than people to potentially stem a complete shutout.

01:07:19:04 - 01:07:41:23
Sara Gutterman: Yeah. Well, and I think that, you know, with the fossil fuel companies, the best thing they can do is start turning their attention to clean hydrogen, right. Because, you know, fossil fuel companies have infrastructure, they have pipelines, and they know how to move. You know, they don't know how to move electrons. Right. And that's what solar and wind power is.

01:07:41:23 - 01:08:05:15
Sara Gutterman: But hydrogen can actually fit into the existing infrastructure that they have. And so there's a whole transformation in thinking with respect to these fossil fuel companies. And again, I'm not going to get into this because I know we need to wrap up. We're already over time. So that's probably the last question that we can take, Mike. But but I think that, you know, the conversation is happening again.

01:08:05:16 - 01:08:37:04
Sara Gutterman: Is it happening fast enough? No. Is it happening? To a certain extent, yes. Do a lot of the companies, the fossil fuel companies have blinders on, in my opinion. And really, that's all it is because I don't work for a fossil fuel company. I don't participate in their meetings at this point, so I don't really know. But in my opinion, my very humble opinion, you know, I think that they are actually look, they've got to extract every last dollar out of their existing infrastructure so they don't have stranded assets on their balance sheet.

01:08:37:05 - 01:08:52:17
Sara Gutterman: But I think that, you know, if at some point innovation will probably prevail, it has to. It always does. And there's going to be a major transformation, you know, at a very high level in those companies.

01:08:52:20 - 01:09:20:09
Mike Collignon: I got a kick out of your comment about marching, Eric, send a comment saying that where he lives in Massachusetts, they have a lot of state energy efficiency programs and funding. And so his comment was, you know, tell you representatives to to get into the game. And that not is only the level level two. And I know there are some states that have kind of refused some of the Inflation Reduction Act funding.

01:09:20:11 - 01:09:38:24
Mike Collignon: But hopefully you all and we're talking to you, the audience here can take that action that Sarah's advising and advocating for, to talk to your local, state and federal representatives to say, hey, you know, we want more on energy efficiency. We want more on sustainability.

01:09:38:27 - 01:09:40:23
Mike Collignon: Good place to wrap up, though.

01:09:40:25 - 01:09:42:22
Sara Gutterman: Indeed.

01:09:42:24 - 01:10:05:16
Mike Collignon: All right. Well, thank you, Sarah, so much for sharing your insights with us today for the smart data. Always a good time to do this at the end of the year. I really do enjoy this webinar. Thank you also again to the audience for asking wonderful questions and leaving comments. Thanks to those who corresponded with me personally. And thank you to Powershift by N.V. and cultured Stone.

01:10:05:17 - 01:10:27:00
Mike Collignon: Other generous sponsorship of this webinar. Now that does conclude all our webinars for 2023. Yes, there's another year in the. Thank you so much for joining us both today and throughout the year. Stay tuned to your inbox for any and all. 2024 Green Builder Media webinars. On behalf of myself and our wonderful producer, Mary Kestner, everyone at Green Builder Media.

01:10:27:01 - 01:10:29:27
Mike Collignon: Have a happy holiday season and a wonderful New year. Take care of.