Lennar Corp: Disclose GHG Reduction Plans

November 1, 2024 As You Sow

WHEREAS: Lennar, a leading residential construction company operating across 26 states, faces the challenge of preserving home affordability while complying with a growing number of climate-related regulations. By creating a systematic, forward-looking plan to reduce energy use in its homes, Lennar will not only mitigate regulatory risk, but also increase its competitiveness by meeting customer demand for affordable green homes.

The residential sector, which accounts for nearly 20% of total U.S. energy consumption, is facing an increase in climate protective regulations.[1] To date, seven states in which Lennar operates have ratified municipal or state-wide policies that limit the use of fossil fuels in buildings.[2] Five of those states are in Lennar’s western segment which generated 37% of the Company’s home sale revenue last year.[3] The federal government has also released updated energy efficiency standards for the construction of new single and multi-family homes which will impact up to a quarter of all new homes nationwide.[4]

Per Lennar’s 2023 10-K, “regulations intended to reduce greenhouse gas emissions or potential climate change impacts are likely to result in restrictions on land development in certain areas and may increase energy, transportation, or raw material costs, which could reduce our profit margins and adversely affect our results of operations”.[5]

To date, Lennar has not disclosed how it plans to successfully meet these planned climate protective regulations. Our Company includes some low-carbon features in its homes, but it remains unclear to investors whether management has developed an enterprise-wide strategy to reduce its carbon emissions while capitalizing on the increasing sales opportunities related to energy-efficient homes.[6]

Meanwhile, Lennar’s peers are setting goals to drive energy efficiency, preparing to meet new and future climate-related regulations, and reducing the operational cost of homes for their customers. For example, competitor KB Home set a target to reach a specific energy efficiency score in its buildings by 2025.[7] This achievement will save KB Home’s customers nearly $1,000 annually on utility bills, a significant selling point.[8]

By adopting and disclosing a more proactive and systematic approach to mitigate climate-related risk, Lennar can give investors confidence that it is positioned to thrive in an increasingly low-carbon economy.

BE IT RESOLVED: Shareholders request the Board disclose how Lennar intends to reduce its full value chain greenhouse gas emissions in alignment with interim and long-term science-based climate goals.

SUPPORTING STATEMENT: Proponents recommend, at Company discretion, that the disclosure include:

The year-over-year average energy efficiency scores of Lennar’s homes;
A near-term goal to improve the average energy efficiency score of its homes; and
An enterprise-wide climate transition plan, including the costs and carbon reductions associated with potential strategies.

[1] https://www.eia.gov/tools/faqs/faq.php?id=86&t=1#:~:text=When%20electrical%20system%20energy%20losses,U.S.%20energy%20consumption%20in%202023.

[2] https://buildingdecarb.org/zeb-ordinances

[3] https://otp.tools.investis.com/clients/us/lennar_corporation2/SEC/sec-show.aspx?FilingId=17212265&Cik=0000920760&Type=PDF&hasPdf=1

[4] https://www.hud.gov/press/press_releases_media_advisories/hud_no_24_089

[5] https://otp.tools.investis.com/clients/us/lennar_corporation2/SEC/sec-show.aspx?FilingId=17212265&Cik=0000920760&Type=PDF&hasPdf=1

[6] https://investors.lennar.com/~/media/Files/L/Lennar-IR-V3/documents/governance-documents/Lennar%202023%20Social%20Responsibility%20Report.pdf

[7] https://s201.q4cdn.com/124745054/files/doc_financials/2023/sr/2023_SustainabilityReport_Final2.pdf p.23

[8] https://www.hersindex.com/hers-index/interactive-hersindex/interactive-hersindex-inside/#57

Resolution Details

Company: Lennar Corp

Lead Filers:
As You Sow on behalf of Amalgamated Bank

Year: 2025