"The home building industry is carbon-intensive, with emissions concentrated in the upstream production of building materials and in the downstream energy use in homes, which accounts for about 20% of U.S. greenhouse gas (GHG) emissions.[1] To reduce the magnitude of these emissions, the residential sector is increasingly the focus of new, climate-related regulations that focus on low-carbon energy sources and energy efficiency. Home customers, too, are demanding more energy efficient homes to reduce energy costs, and investors continue to value companies with clear climate-related disclosures and low carbon transition plans.

Toll Brothers, a leading residential construction company operating across 24 states, has not set GHG reduction targets. It also fails to disclose its GHG emissions – information critical to determining the Company’s progress in reducing the full range of its GHG emissions and its exposure to climate-related risks including regulatory readiness and competitiveness with peers.

Rising State Regulations

Municipal and state governments are increasingly adopting climate-related building regulations, including restrictions on gas appliances in new homes. Ten states where Toll Brothers operates have already enacted such measures either at the state or local level,[2] and over half of Toll Brothers’s 2024 home sales were made in these states.[3] Many states are also tightening their clean energy standards and emissions disclosure requirements.[4]

In its SEC filings, Toll Brothers acknowledges that climate-related regulations are a potential material risk factor,[5] yet, it fails to provide emissions disclosure to assist investors in evaluating the company’s climate transition progress.

Competitors’ Disclosures Highlight Toll Brothers’s Disadvantage

Toll Brothers’s lack of emissions disclosure also prevents investors from evaluating its performance against competitors. D.R. Horton reports operational emissions, while PulteGroup, Taylor Morrison Homes, and KB Home disclose both their operational and value chain emissions.[6] Additionally, while Toll Brothers states that it uses certain energy-efficient appliances and, in 2024 disclosed the average energy efficiency of 32% of its homes, those homes lagged the energy efficiency scores of peers including PulteGroup and KB Home.[7] The energy efficiency of the remaining two thirds of its home stock is unknown.

Toll Brothers’s lack of transparency denies investors the ability to adequately assess its climate-related risk and its ability to take advantage of market opportunities at a time when capital markets are increasingly demanding such information. By disclosing its emissions, Toll Brothers can remain competitive, mitigate regulatory risk, and provide investors with confidence that the Company is prepared to thrive in a low-carbon economy.

[1] https://www.pnas.org/doi/10.1073/pnas.1922205117?utm_=

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

[3] https://otp.tools.investis.com/clients/us/toll_brothers_inc/SEC/sec-show.aspx?Type=html&FilingId=18061104&CIK=0000794170&Index=10000#TOL-20241031_HTM_ibb0e5d9e08b344da974e6be5142ea54d_13

[4] https://ww2.arb.ca.gov/our-work/programs/california-corporate-greenhouse-gas-ghg-reporting-and-climate-related-financial/about

[5] https://otp.tools.investis.com/clients/us/toll_brothers_inc/SEC/sec-show.aspx?Type=html&FilingId=18061104&CIK=0000794170&Index=10000#TOL-20241031_HTM_ibb0e5d9e08b344da974e6be5142ea54d_13, p.16-17

[6] https://investor.drhorton.com/~/media/Files/D/D-R-Horton-IR/documents/fy23-dr-horton-inc-esg-report.pdf, p.79; https://s204.q4cdn.com/680895981/files/doc_downloads/2024/2024_Sustainability_Report_v-4.pdf, p.16; https://s27.q4cdn.com/448041563/files/doc_downloads/2025/07/9644-BMC-ESG-2024-051925-digital.pdf, p.51; https://s201.q4cdn.com/124745054/files/doc_downloads/2025/04/21/2024-Sustainability-Report_FINAL.pdf, p.53.

[7] https://www.pulte.com/energy-star-builder; https://investor.kbhome.com/environmental-social-and-governance-esg/environmental/default.aspx
"