An aromatic polyester polyol having a nominal functionality of at least about 2 is produced from the esterification reaction of a phthalate-based composition containing less than 50 mol % of ortho-phthalic acid or phthalic anhydride, with a hydroxyl material containing at least 20 mol % of at least one branched aliphatic diol, and optionally transesterified with at least one hydrophobic material. The polyester polyol has improved shelf-life stability as demonstrated by the polyester polyol remaining clear and homogeneous for at least 6 months when stored at room temperature. The polyester polyol, when incorporated into a polyol foam-forming resin composition in an amount of at least 40 wt %, results in polyurethane and polyisocyanurate foams that exhibit low smoke and weight loss upon burning conditions.