Builders FirstSource, Inc. - Sustainability Overview

Sustainability Builds Our Business

Our mission is to be the best supplier of building materials and services by having a people-first culture, exceptional customer service, and innovative solutions that create superior value for stakeholders. We recognize that the sustainability of our products and operations is important to the success of our company. Enabling homebuilders to become more productive and efficient is fundamental to what we do and is an integral part of our business strategy. Consistent with our core values, our goal is to be recognized as a pioneer by our customers, team members, industry, and communities.

We continuously seek to identify, measure and map the environmental, social and governance (ESG) impacts of our business to deliver long-term value. Our sustainability priorities are guided by stakeholders and third-party frameworks including the Sustainability Accounting Standards Board (SASB), Building Products & Furnishings standard, and Task Force on Climate-related Financial Disclosures (TCFD).

Read our 2023 CSR Report

Read Our 2022 CSR Report

Key Stats

22%

Reduction in year-over-year total worker recordable incident rate in 2022, beating our 10% reduction target

>90%

Of our wood is from sustainable forestry certified vendors

248K

Metric tons of CO2e Scope 1 & 2 emissions

Environment: Enabling Greener, More Efficient Construction

As the nation’s largest supplier of structural building products and value-added components, aligning our business with the environment is an integral part of our culture. We are committed to operating efficiently and minimizing our environmental footprint, including reducing carbon emissions, water usage and waste. Our products and services also enable partners to build more sustainably and efficiently, promoting greener building in the industry.

SUSTAINABLE PRODUCTS AND SOLUTIONS

We continually explore new avenues to provide more efficient materials for the construction industry. We source sustainable- certified lumber from the Sustainable Forestry Initiative (SFI) and Forest Stewardship Council (FSC) and provide Energy Star® qualified windows and doors. In 2022, we sourced over 90% of our wood from SFI or FSC certified vendors.

MANUFACTURED COMPONENTS OPTIMIZE MATERIAL USAGE, MEANING LESS WASTE AND CLEANER, SAFER JOBSITES

Builders FirstSource uses innovation to offer sustainable solutions that boost building efficiency and result in substantial savings for customers. Our manufactured framing components — including wall panels, EWP floor systems, roof trusses, floor trusses and READY-FRAME® — optimize material usage and reduce construction waste. We estimate that our production process for roof and floor trusses saves approximately 25% on total board footage of wood.

Our READY-FRAME® computerized, precisely pre-cut, labeled framing bundles enable crews to build more quickly, more safely and with less waste. READY-FRAME® enables up to 20% faster construction and can deliver a 39% increase in productivity per production labor hour. Use of READY-FRAME® can reduce cutting by 60% and ladder time by 27%, reducing exposure to injury risk leading to a safer jobsite. READY-FRAME® also significantly reduces the amount of material sent to landfill — up to two-thirds fewer dumpsters per home — meaning less waste and lower disposal costs, as well as lower emissions from avoided waste haulage. In 2022, READY-FRAME® avoided approximately 77,000 tons of CO2e.

WHY CHOOSE BUILDERS FIRSTSOURCE MANUFACTURED COMPONENTS?

Better

Computerized designs reduce mistakes with 1/16" accuracy.
Optimized material usage avoids misuse and waste.
Benefit from guaranteed takeoffs, fewer errors and less risk.

Faster

Build 20% faster with the same crew, which means less labor needed.
Build more houses in less time with increased efficiencies like pre-cut and labeled smart bundles.

Safer

Less on site cutting contributes to a cleaner, more organized job site.
A safer environment reduces risk for injury.

Greener

Fewer cuts mean less waste in dumpsters and reduced disposal fees.
Results in a cleaner job site and more trees saved.

Click here to see how many trees have been saved using our manufactured framing components since January 1, 2019.

OPERATIONS

The Environmental Compliance Department is responsible for developing and implementing environmental management programs to promote compliance and sustainability. Each location assigns individuals to be responsible for implementing and complying with these environmental programs. We monitor and comply with applicable federal, state and local environmental regulatory requirements, such as stormwater and air requirements. We utilize the BFS Foundations Management System to educate and train team members on relevant environmental and safety topics, such as stormwater management awareness and spill prevention.

In line with our focus on compliance and continual improvement, the Internal Environmental Audit Team audits each location at least once every three years. Locations identified as “higher risk” receive quarterly and annual audits on topics such as stormwater and hazardous spills. We take appropriate corrective actions to address any issues to enhance operations and compliance.

We are committed to monitoring, measuring, and reducing our environmental impact, including natural resource usage and emissions. For example, we do not utilize water in our key manufacturing processes, which minimizes impact and risks associated with water usage. In line with this commitment, we have implemented several initiatives to reduce or environmental impact, including:

Utilizing water-based paints, which are better for the environment and team members and reduce hazardous waste risks.
Implementing a nationwide delivery routing system to maximize vehicle efficiency and minimize emissions.
Implementing a nationwide delivery routing system to maximize vehicle efficiency and minimize emissions.
Monitoring vehicle idle time and providing financial incentives to minimize idling and reduce emissions.
Upgrading lighting to LEDs, which not only save energy and reduce carbon emissions, but also improve safety through better visibility.
Installing overhead fans to reduce air conditioning and related power usage.
Installing overhead fans to reduce air conditioning power usage.
Introducing alternative fuel vehicles, such as electric, compressed natural gas, and clean-burning diesel vehicles as they become widely available to reduce carbon emissions.

We are committed to addressing the risks of climate change, including by taking actions to reduce greenhouse gas emissions. In 2022 and early 2023, we undertook and completed an extensive project to consolidate and report energy use data. Through this work, we now monitor and report Scope 1 and Scope 2 greenhouse gas emissions across our facilities and fleet.

We are utilizing 2022 carbon emissions baseline data to assess what short-, medium- and long-term greenhouse gas emission reduction targets are achievable. Baselining emission reduction targets on reliable and accurate data ensures that the targets are meaningful, credible and obtainable. We are committed to continue to invest time, effort and resources to be in a position to set meaningful Scope 1 and Scope 2 greenhouse gas emission reduction targets no later than 2025.

TEAM MEMBERS

Our team members enable Builders FirstSource to achieve our goals just as we enable customers to achieve theirs. The partnership, dedication, and loyalty of our team members are key to the company’s success. Builders FirstSource strives to foster and maintain an environment that is safe and inclusive and that promotes bringing fresh ideas and diverse perspectives to help us grow and continue to be a thriving, sustainable business that is a source of pride in the industry.

We have improved our total worker recordable incident rate (RIR) by 36% since 2020, which is reflective of our strong focus on safety. To achieve this, we have taken concerted action, including implementing new trainings and changing behaviors to ensure team members have the knowledge to perform each job safely.

SAFETY

Accountability

Our goal is to prevent all accidents. The Vice President of Safety has managerial responsibility for health and safety programs. Our Executive Leadership Team is actively engaged in our safety programs and has strong oversight via periodic updates and performance reports. The Board also receives quarterly reports on safety performance and initiatives. Moreover, safety performance is a component of our leadership’s compensation.

Policies and Programs

The Builders FirstSource Safety and Health Program is aligned with OSHA standards and provides a framework for operating safely and mitigating risks with guidelines and procedures. We established a general safety manual, construction-site safety and standard operating procedures for specific jobs. These safety policies and programs apply to team members and contractors.

Each of our locations implements controls and safeguards to promote safety and must have processes in place to inspect and identify hazards and then record and track mitigation actions for each hazard identified. We provide safe work procedures for critical tasks, offering clear expectations and requirements to perform work safely.

Location managers and supervisors are responsible for implementing and maintaining safety elements in their work areas and answering team member questions about the Safety and Health Program, as well as work with the regional or market safety managers as appropriate. In addition, safety performance is systematically considered during the contractor selection process. Our supervisors and managers also perform regular field assessments of contractor safety performance to ensure our standards are met.

All locations also have location-specific written emergency preparedness procedures with guidelines on how to respond in the event of an incident. To achieve compliance, we conduct internal safety audits of each location at least once every three years.

Training

We promote understanding and adherence to safety programs through ongoing education and training efforts that aim to improve behavior patterns. Mandatory new-hire training includes a robust focus on safety and the Builders FirstSource Safety and Health Program. In addition to mandatory new-hire safety training, all team members must participate in daily, as well as monthly, safety meetings. We also provide job-specific safety trainings to team members in order to further promote safety.

Performance

Our goal is to drive to zero incidents. As a testament to our safety commitment and the effectiveness of trainings, we delivered a 22% RIR reduction across the company in 2022, beating the 10% reduction target. We have targeted another annual reduction of at least 10% for 2023, which is a component of our leadership’s compensation. In addition, our Compliance Safety Accountability (CSA) points per inspection in 2022 was 1.97, down 27.6% from the previous year and beating the 10% reduction target. Governed by the Federal Motor Carrier Safety Administration (FMCSA), the CSA score is a measurement of fleet safety

COMPENSATION AND BENEFITS

We provide competitive compensation and benefits packages to attract and retain top talent. As part of our philosophy of encouraging team members to succeed and share in the success of the company, we offer variable incentive pay to virtually all team members, which can include a profit-sharing plan and/or an annual bonus plan. Additionally, we celebrate team members through service awards and company and peer recognition awards.

We pride ourselves on offering a comprehensive benefits package to attract top talent and compete across industries. With our responsible time off, parental leave, volunteerism day and adoption assistance benefits, we offer support for team members that is unique in the construction sector.

We offer a wide array of competitive benefits, including:

Medical, prescription, dental and vision coverage; health reimbursement accounts
Virtual healthcare and nurse lines
Mental health resources
Flexible Spending Accounts for Health and Dependent Care
401(K) retirement program with company match (also available to part-time Team Members)
Industry-leading responsible time off
Industry-leading parental leave
Paid volunteerism day
Adoption assistance
Paid bereavement leave
Paid time off, remote work and work/life balance programs
Company paid life and AD&D insurance
Choice of disability income protection (short- and long-term)
EAP (Team Member Assistance Program), also available to part-time team members
Preventive care programs

Engagement and retention

We value and seek the input of team members to foster an engaging and rewarding work environment in order to attract and retain talent. We undertake annual engagement surveys supplemented by frequent check-ins with team members, through which team members provide input on the work environment, allowing us to assess and further enhance workforce engagement. We also hold regular town hall meetings with Q&A sessions to provide open communication with team members. To promote a safe and respectful workplace, we maintain a formal grievance system through which team members can report an issue via an anonymous hotline, as well as directly to their manager or human resources representative. These procedures are set forth in the Team Member Handbook and on the company intranet, as well as displayed on posters in our facilities.

At Builders FirstSource, we encourage the continuous professional development of all our team members, and leadership development is a part of our strategic focus. We also have an Internal Training and Development Team focused on identifying current and future skill gaps and training our team members to ensure they have the necessary skills to succeed. We utilize our BFS Foundations Learning Management System to provide and track completion of our trainings across topics such as leadership and management, professional skills and compliance. Moreover, we support valuable professional certifications across our markets.

We believe hands-on experience and learning are paramount to the development of our team members. As such, we provide extensive on-the-job training and job shadowing. Our team members receive performance reviews annually as part of our feedback and development process.

Training and leadership development programs include:

Build Understanding in Leadership Dynamics (BUILD)
- BUILD: Five-day foundational leadership skills and strategies training
- BUILD 2.0: Three-day, in-depth advanced leadership training
High potential and emerging leader classes
Customer service training
Best practices sharing
Micro-learnings courses on various topics, such as navigating change
Industry-specific skills courses

Diversity, Equity and Inclusion

We believe diversity, equity and inclusion (DEI) must be firmly embedded in our strategy. Our DEI priorities are to enhance awareness of the connection between DEI and the success and sustainability of our business, increase workforce diversity, improve and enhance communication, and increase inclusion and engagement. The Chief People Officer has management responsibility for our DEI efforts, supported by the DEI Resource Group focused on empowering team members to reach their fullest potential. To drive these priorities, we have trained 99% of all team members on DEI initiatives to date and provide unconscious bias training for all team members. Ensuring team members receive DEI training is part of our annual bonus incentive.

DEI is integrated within our formal talent pipeline, beginning with forecasting hiring needs. We strive to ensure our candidate hiring slates include diverse talent in support of the strategic commitment to building a more diverse, equitable and inclusive talent pipeline and workforce. We require corporate positions to have diversity slates and are expanding relationships with Historically Black Colleges & Universities.

In 2022, we were recognized for our above- and-beyond commitment, contribution, and collaboration in building a sustainable workforce in residential construction by the Building Talent Foundation. We also recognized and honored the women of BFS during Women in Construction Week, featuring them on our social channels. Fifteen of our team members were honored by HBSDealer’s 2022 Top Women in Hardware & Building Supply.

Builders FirstSource is a proud partner of the Department of Defense’s SkillBridge Program and is designated as an official Military Friendly® employer for 2023. Additionally, we received a 2022 Employer Award from VETS Indexes. We are looking to substantially expand veteran recruitment efforts by engaging the SkillBridge Program, Home Builders Institute, National Homebuilding Association, Building Talent Foundation, Hiring Our Heroes Program, The Manufacturing Institute, Troops Into Transportation and various military spouse programs.

In addition, “Proud to Serve,” one of our Employee Resource Groups, is focused on recruiting, employing and retaining veterans and persons serving in the armed services.

We are committed to recruiting and promoting diverse talent. To assess and help advance diversity among team members, we have monitored the diversity of our workforce and increased recruiting from more diverse sources. Compared to the 2022 construction-industry gender (11% female) and ethnic/racial diversity (43%) data published by the Bureau of Labor Statistics, Builders FirstSource’s diversity compares favorably, as we are outperforming the industry average.

COMMUNITIES

More than a decade ago, Builders FirstSource established an enduring partnership with the Leukemia & Lymphoma Society (LLS). Because many of us know someone or have been impacted directly by the devastation of blood cancer, we are committed to transforming the lives of patients diagnosed each year.

Through a variety of charitable efforts, including the participation of thousands of team members in LLS’s signature Light the Night events across the country, Builders FirstSource continuously supports the non-profit’s mission to raise money for research that will cure leukemia, lymphoma, Hodgkin’s disease, and myeloma and to improve the quality of life of patients and their families.

Builders FirstSource supports a variety of charitable organizations, and we also encourage our locations to support charitable organizations and local causes. We seek to create a meaningful difference in the lives of others and an enduring impact on the communities where we live and work.

INTEGRITY

We are committed to fostering an atmosphere that supports individual and company integrity and success. We take deep pride in knowing that we succeed with uncompromising integrity. Builders FirstSource’s Code of Business Conduct and Ethics and Supplemental Code of Ethics for Senior Officers serve as the foundation of our compliance program and set forth policies and procedures to promote integrity and ethical conduct, as well as anti-bribery and anti-corruption programs. The Code also includes operating guidelines detailing delegation of authority, requirements for approval and standard operating procedures. Our General Counsel oversees business ethics and bribery and corruption programs. All team members receive training and must sign off on the Code during onboarding and receive ongoing annual training thereafter. All managers and above receive quarterly and annual questionnaires and reviews as part of regular bribery and corruption risk assessments to ensure compliance.

In addition, we have implemented measures to ensure appropriate and ethical business conduct and relations, such as our Responsible Supply Chain Policy. We also have robust accounting systems to monitor and detect potential financial irregularities, which includes regular reporting to the Board.

Whistleblower hotline

To help ensure compliance with the Code of Business Conduct and Ethics and promote ethical behavior, we have a whistleblower program overseen by our General Counsel, who has general oversight and enforcement with respect to business ethics. The whistleblower program offers anonymous 24/7 reporting of any concerns, and the program is communicated to all team members via posters in all locations, the Team Member Handbook provided to and acknowledged by all team members and the company intranet. All reported incidents are investigated and tracked in the EthicsPoint compliance system through final resolution. Appropriate representatives of legal, human resources, internal audit and finance departments are notified of reported incidents, with an overview of reports provided to the Audit Committee of our Board of Directors.

PRODUCT QUALITY

Consistent with our mission, vision and values, the quality of our products is key to maintaining product leadership. We are committed to the quality of our products and ensuring they are delivered to the standard customers expect from us each and every time.

Our commitment to quality resonates across the entire organization, and relevant team members are trained on the topic periodically. We regularly monitor product quality and safety performance to further advance quality and safety metrics. In the case of a quality and safety incident, we have established response procedures to launch investigations and issue corrective action for continuous improvement.

Truss Manufacturing

All of our truss manufacturing plants are QC/QA-certified by the Structural Building Components Association (SBCA). Each component location has a designated QC inspector, and each QC inspector is required to inspect a set number of trusses per build station based on established lumber criteria, such as joint tolerance and connector plate embedment. Inspection details are submitted to SBCA for review and scoring quarterly, and plants that consistently achieve the required score maintain the nationally recognized SBCA-QC certification. In addition, some facilities also use the Timber Products Association as a secondary inspection service.

Millwork Manufacturing

All of our millwork manufacturing plants are required to follow our Quality Assurance Manual for Energy Star Certification. This manual, along with other quality control processes, guide our millwork manufacturing plants to measure and manage in-process and post-production inspections throughout the millwork manufacturing process.

DATA PRIVACY AND CYBERSECURITY

The Chief Information Officer (CIO) oversees data privacy programs, and the Chief Information Security Officer (CISO) oversees cyber and data security. The CIO and CISO continuously monitor internal and external cybersecurity threats and review and revise cybersecurity defenses on an ongoing basis. Both the CIO and CISO prepare reports for the Board on a regular basis. At the Board level, data privacy and cybersecurity are overseen by the Audit Committee. The Audit Committee meets with the CIO and CISO at least annually to discuss cybersecurity in greater detail, and the Audit Committee also reports to the collective Board regarding cybersecurity matters annually. To drive our commitment to data privacy and cybersecurity across the organization, we conduct quarterly training and semi- monthly phishing simulations to all employees.

Conflict Minerals

Builders FirstSource recognizes that the extraction and processing of certain raw materials can have significant social, economic and environmental impacts on local populations. We are particularly concerned with tin, tantalum, tungsten and gold originating in the Democratic Republic of the Congo or its adjoining countries (commonly known as Conflict Minerals), where revenues generated by their sale may directly or indirectly finance armed conflict. We do not directly source materials from smelters or mines and only utilize refined metals in manufacturing activities, and we expect all suppliers to buy materials from socially responsible sources.

INTEGRITY: PROTECTING OUR TRUSTED REPUTATION

We are committed to promoting a work environment and atmosphere that is conducive to individual and company integrity and success, and we take deep pride in knowing that we succeed with uncompromising integrity. Builders FirstSource’s Code of Business Conduct and Ethics sets forth policies and procedures to promote integrity and ethical conduct, and all team members must agree to comply with our Code of Business Conduct and Ethics.

In addition, we have implemented measures to ensure appropriate and ethical business conduct and relations, such as our Responsible Supply Chain Policy. We also have robust accounting systems to monitor and detect potential financial irregularities, which includes regular reporting to the Board of Directors.

Sustainability Overview