The federal government’s environmentally friendly purchasing policy for suppliers is welcome

The Infrastructure Sustainability Council (ISC) has welcomed the Federal Government’s Environmentally Sustainable Procurement (ESP) policy, which will help the government better measure the environmental outcomes of its agreements with suppliers.

The ESP policy establishes a reporting framework to create a baseline for environmentally sustainable procurement, and will be phased in over a two-year period, with phase one targeting the procurement of construction services from 1 July 2024.

The ESP policy has three focus areas: climate, environment and circularity, or using existing resources for as long as possible, through renovation, reuse, repair, recycling and alternative methods such as leasing/rental to achieve greater sustainability.

Suppliers will be required to report against the relevant metrics on all government contracts to which the ESP policy applies – including for infrastructure projects with a purchase value threshold greater than or equal to $7.5 million.

A verified IS rating from the ISC is one of the metrics endorsed in the ESP policy framework.

“The transition to a net zero and circular economy requires a shift in the way we all consume materials, including the federal government, with its massive spending across the country, purchasing goods and services from thousands of suppliers,” says Patrick Hastings, acting CEO of ISC.

“This is a strong statement of support from the Minister for Environment and Water, the Honorable MP Tanya Plibersek, in selecting the Infrastructure Sustainability Council’s IS Rating Tools to measure and ensure environmentally sustainable procurement for construction services from 1 July 2024.

“Policy decisions affecting procurement will have a significant impact on these three focus areas. More broadly, the ISC celebrates the goal outlined in the policy of encouraging investment and innovation in sustainable goods. We believe this policy will further improve the maturity, capability and capacity of sustainability practice within the industry,” he says.

The success of the ESP policy will be measured against three key performance indicators (KPIs):

• the extent to which greenhouse gas emissions are minimized;
• the extent to which there has been an increase in the use of circular economy principles;
• the number of suppliers contracted to provide goods and services to the Australian Government and that have a Supplier Environmental Sustainability Plan (SESP).

Results against the KPIs will be published annually on the website of the Ministry of Climate Change, Energy, Environment and Water.

The ISC extended its support for the annual reporting of performance results and said it expected this development would also have an important signaling effect for private sector procurement.

“Ensuring progress is reported is essential to understanding where future efforts should be focused to reach net zero by 2050. The ISC looks forward to working with construction service providers to ensure sustainability performance is measured in a way that meets policy reporting requirements and increases impact,” says Hastings.

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