Government pulls green procurement lever

As part of its commitment to reduce waste and enhance the circular economy, the Australian government is mandating the procurement of environmentally sustainable goods and services across the Commonwealth.

The Australian Procurement and Construction Council (APCC) notes that in 2022–23, the Australian government spent almost $75 billion buying goods and services – approximately 17 per cent of Australia’s GDP. Shifting to greater environmental sustainability in purchasing therefore makes a big impact.

The new Environmentally Sustainable Procurement Policy will take effect from July 1, 2024. This sets out guidelines for Australian government officials to buy products that minimise greenhouse gas emissions, are safe for the environment, and retain their value for longer.

The policy requires suppliers to undertake activities to substantiate environmental claims and demonstrate compliance with the policy.

The policy promotes procurement best practices by applying environmentally sustainable principles to four high-impact procurement categories introduced over two years, from:

• July 1, 2024: construction services at or above $7.5 million
• July 1, 2025: furniture, fittings and equipment, and ICT goods and textiles at or above $1 million.

The government has confirmed that HVAC&R is included under construction services.

Suppliers are responsible for delivering commitments and providing accurate and complete
reporting against environmental sustainability metrics included in a Supplier Environmental Sustainability Plan (SESP). Throughout contract delivery, suppliers will have to raise any risks of not meeting commitments in the SESP with the procuring entity.

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) will be supporting businesses responding to the policy. Guidance and templates will be released between April and June, and an information webinar for suppliers is scheduled for May 14, 2024 to explain the policy and requirements.

To find out more about the policy, visit the DCCEEW’s sustainable procurement page.