650

Million Dollars

in annual revenue

1

Ranked

One of Topbuild’s segments - TruTeam - is the #1 insulation installer in the majority of Master Service Agreements

11%

CAGR

in revenue growth since 2015


The Path to Drawdown: Insulation

Construction and buildings account for 38% of the total global CO2 emissions and 35% of total energy use. Much of this energy is used to heat and cool a home and a sizable amount of it (25-60% of that energy) is wasted through air infiltration, or heat escaping from warmer areas to cooler areas.

Better insulation of building envelopes can reduce that heat from escaping. Insulation is the use of high levels of improved materials in building envelopes that resist heat flow and regulate indoor temperatures. Ideally, insulation should cover all sides of a building, from the bottom floor, exterior walls, to the roof, and be continuous. Sealing gaps and cracks is also critical to a more thermal resistant building envelope.

Insulation is one of the most practical and cheapest ways to make buildings more energy efficient, both in new construction and through retrofitting older buildings that are often not well insulated. This also means lower utility bills, keeping out moisture, improving air quality and avoiding greenhouse gas emissions associated with energy use.

Project Drawdown estimates that 30% of buildings worldwide were insulated in 2018. If existing buildings in temperate and tropical countries install insulation (with low carbon materials) at a rate of 1.6 - 2% every year, between 17 - 19 gigatons of GHG emissions can be avoided by 2050.

About

Topbuild (stock ticker: BLD) installer and distributor of insulation and building material products throughout the United States. Their brand companies are TruTeam and Service Partners. Combined, they install and distribute insulation from other 265 branches nationwide.

BLD's Role in Drawdown

79% of Topbuild’s revenue (p. 4) comes from selling insulation and accessories, while the rest is generated from the sale of glass and windows, gutters, and other products.

Topbuild’s insulation products are made from a variety of materials. Conventional materials include fiberglass and spray foam. The more sustainable option is the cellulose insulation, which is made entirely of plant-based materials like recycled newspaper that’s treated for fire-resistance. They also offer mineral wool insulation, made of volcanic rock like basalt or recycled slag from steel mills.

Partly owing to their proactive acquisitions - Topbuild acquired 15 companies since 2016 (p. 13) -  they’ve been growing fast. Since 2016, their sales revenue has grown by 9.3% annually.

BLD: What We Like

We’ll update this section as Topbuild makes their sustainability efforts available.

BLD: What We Want to See Improve

Track GHG Emissions


Topbuild’s Sustainability Report pays very little attention to the issue of climate change, energy-use or GHG emissions. While Topbuild’s claim that building insulation play a role in reducing emissions is true, the company’s efforts in reducing their own emissions seem to be minimal. We urge them to take the first step in this direction by tracking and disclosing their direct and indirect emissions in their Sustainability Reports.

Set Clear Targets


Beyond complying with EPA and state environmental program requirements, Topbuilder hasn’t set any sustainability targets. These targets and timetables should be explicit, quantitative, and included in their sustainability report and environmental policies.

Switch to Non-Fossil Fuel Banks


Topbuild has worked (p. 64) with JP Morgan and Bank of America for their share repurchase. These banks are at the top of the list of banks that still fund fossil fuel companies. We urge Topbuild to switch to banks that do not invest in fossil fuels industries for their financial operations and credit facilities

Other Insulation Stocks in the Climate Index

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