Lennar Corporation | Interfaith Center on Corporate Responsibility

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<strong>Company:</strong>
<p>Lennar Corporation</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>One Vote Per Share </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>RESOLVED</strong>: Shareholders request that the Board of Directors take the steps necessary to eventually enable all of our company’s outstanding stock to have an equal one-vote per share in each voting situation. This would encompass all practicable steps including encouragement and negotiation with current and future shareholders, who have more than one vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, if necessary.</p>
<p><strong>SUPPORTING STATEMENT</strong>:</p>
<p dir=”ltr”>This proposal topic won 45% support at the 2023 Lennar annual shareholder meeting. This likely represented greater than 60% support from the non-insider Lennar shares. </p>
<p dir=”ltr”>With one-vote per share Lennar’s current problems might not be so severe:</p>
<p dir=”ltr”>Selling price of homes down 9% versus the comparable figure a year ago.</p>
<p dir=”ltr”>Margins declining due to increased use of incentives and rebates.</p>
<p dir=”ltr”>13% decrease in the number of homes under construction.</p>
<p dir=”ltr”>Stock price down from $184 in October 2024.</p>
<p dir=”ltr”>Dual-class stocks tend to create an inferior class of shareholders and hand over power to a select few, who are then allowed to pass the financial risk onto others. With few constraints placed upon them, managers holding super-class stock can spin out of control. Families and senior managers can entrench themselves into the operations of the company, regardless of their abilities and performance. Dual-class structures may allow management to make bad decisions with few consequences.<br><br>Hollinger International was a sad example of the negative effects of dual-class shares. Former CEO Conrad Black controlled all of the company’s class-B shares, which gave him 73% of the voting power with only 30% of the equity. He ran the company as if he were the sole owner, exacting huge management fees, consulting payments and personal dividends. Hollinger’s board of directors was filled with Black’s friends who were unlikely to forcefully oppose his authority. <br><br>Non-family Hollinger shareholders had almost no power to have any influence in terms of executive pay, acquisitions, board composition or poison pills. Hollinger’s financial and share performance suffered under Black’s control.<br><br>The Council of Institutional Investors (CII) recommends a 7-year phase-out of dual class share offerings. The International Corporate Governance Network supports CII’s recommendation to require a time-based sunset clause for dual class shares to revert to a traditional one-share/one-vote structure in no more than 7-years.</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> John Chevedden</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Chevedden Corporate Governance</span></div>
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<strong>Company:</strong>
<p>Lennar Corporation</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Climate Change, Environment </p>
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<strong>Focus Area:</strong>
<p>Climate Change </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class><strong>WHEREAS</strong>: 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.</p>
<p class>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]</p>
<p class>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]</p>
<p class>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]</p>
<p class>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]</p>
<p class>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.</p>
<p class><strong>BE IT RESOLVED</strong>: 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.</p>
<p class><strong>SUPPORTING STATEMENT:  </strong>Proponents recommend, at Company discretion, that the disclosure include:</p>

<p class>The year-over-year average energy efficiency scores of Lennar’s homes;</p>

<p class>A near-term goal to improve the average energy efficiency score of its homes; and</p>

<p class>An enterprise-wide climate transition plan, including the costs and carbon reductions associated with potential strategies.</p>

<p class>[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.</p>
<p class>[2] https://buildingdecarb.org/zeb-ordinances</p>
<p class>[3] https://otp.tools.investis.com/clients/us/lennar_corporation2/SEC/sec-show.aspx?FilingId=17212265&Cik=0000920760&Type=PDF&hasPdf=1</p>
<p class>[4] https://www.hud.gov/press/press_releases_media_advisories/hud_no_24_089</p>
<p class>[5] https://otp.tools.investis.com/clients/us/lennar_corporation2/SEC/sec-show.aspx?FilingId=17212265&Cik=0000920760&Type=PDF&hasPdf=1</p>
<p class>[6] https://investors.lennar.com/~/media/Files/L/Lennar-IR-V3/documents/governance-documents/Lennar%202023%20Social%20Responsibility%20Report.pdf</p>
<p class>[7] https://s201.q4cdn.com/124745054/files/doc_financials/2023/sr/2023_SustainabilityReport_Final2.pdf p.23</p>
<p class>[8] https://www.hersindex.com/hers-index/interactive-hersindex/interactive-hersindex-inside/#57</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Lyndsay Fritz</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Amalgamated Bank</span></div>
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Resolution Details

Company:

Lennar Corporation

Year:

2024

Issue Area:

Lobbying & Political Contributions

Focus Area:

Political Contributions

Status:

Filed

Resolution Text

Resolution Details

Company:

Lennar Corporation

Year:

2024

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

Filed

Resolution Text

WHEREAS: According to the Intergovernmental Panel on Climate Change, the window for limiting global warming to 1.5 degrees Celsius (1.5°C) is quickly narrowing.1Investordemand for science-aligned greenhouse gas emission reductions reflects the reality that climate change poses a systemic risk to companies and to investor portfolios. Failure to reach Net Zero emissions by 2050 is projected to have dramatic economic consequences.2 Immediate and significant emissions reduction is therefore required of all market sectors.3

The building sector is responsible for 40% of total energy use in the U.S. and 35% of carbon emissions.4 U.S. residential construction emits over 50 million tons of embodied carbon emissions annually.5Fortunately, there is a clear path to decarbonization, with studies demonstrating that 30 to 50% of these emissions can be mitigated with commercially available, affordable, and code-compliant building materials.6

As stated in Lennar’s 2022 10-K, “changes in global or regional environmental conditions and governmental actions in response to such changes” pose significant risk to our company 7 By reducing the emissions from its full value chain, Lennarcan mitigate its climate-related physical and transition risks while also preparing to comply with heightened climate regulations and shifting consumer demands. However, Lennar lacks both emissions disclosures and emissions reduction targets.

Lennar also lags its peers in creating science-based climate transition plans. Fifty-eight companies operating in the U.S. real estate and construction and engineering sectors, including Lennar’s direct peer KB Home, have committed to or have already set emission reduction targets through the globally recognized target verification program Science Based Target initiative.8

By setting science-based reduction targets that cover its full value chain and disclosing a comprehensive and forward-looking decarbonization plan,Lennar can provide investors with the assurance that it is both addressing its climate-related risks and capitalizing on the value-creating market opportunity of a net zero economy.

BE IT RESOLVED: Shareholders request the Board issue a report, at reasonable expense and excluding confidential information, disclosing how Lennar intends to reduce its full value chain greenhouse gas emissions in alignment with the Paris Agreement’s 1.5°Cgoal requiring Net Zero emissions by 2050.

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

Disclosure of all relevant Scope 1, 2, and 3 emissions;
A timeline for setting a 1.5°C-aligned Net Zero by 2050 target for the Company’sScope 1, 2, and 3 greenhouse gas emissions, as well as1.5°C-aligned interim emissions reduction targets;
An enterprise-wide climate transition plan including a quantification of the decarbonization initiatives required to meet its emissions reduction targets; and
Annual progress towards meeting its emissions reduction goals.

1 https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_LongerReport.pdfp.88

2 https://www.nytimes.com/2021/04/22/climate/climate-change-economy.html

3 https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_LongerReport.pdfp.102

4 https://www.energy.gov/articles/doe-announces-46-million-boost-energy-efficiency-and-slash-emissions-residential-and

5 https://rmi.org/insight/hidden-climate-impact-of-residential-construction

6 https://rmi.org/insight/hidden-climate-impact-of-residential-construction

7 https://otp.tools.investis.com/clients/us/lennar_corporation2/SEC/sec-show.aspx?FilingId=16339466&Cik=0000920760&Type=PDF&hasPdf=1, p.19

8 https://sciencebasedtargets.org/companies-taking-action

Give Each Share an Equal Vote

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