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 from its agreements with suppliers.

The ESP Policy establishes a reporting framework for creating a baseline of environmentally sustainable procurement, and will be phased in over two years, with phase one directed at the procurement of Construction Services from 1 July 2024.

The ESP Policy has three focus areas: climate, the environment and circularity, or using existing resources for as long as possible, through refurbishment, reuse, repair, recycling, and alternative methods such as leasing/renting 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 procurement value threshold of 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 how we all consume materials, including the Federal Government, with its huge spend across the nation, procuring goods and services from thousands of suppliers,” says ISC’s acting CEO Patrick Hastings.

“This is a powerful endorsement by the Minister for the Environment and Water, the Honourable Tanya Plibersek MP, in selecting the Infrastructure Sustainability Council’s IS Rating Tools to measure and assure environmentally sustainable procurement for construction services from 1 July 2024.

“Policy decisions that impact on procurement will drive considerable impact across these three focus areas. More broadly, the ISC celebrates the purpose outlined in the policy of stimulating investment and innovation in sustainable goods. We believe that this policy will further improve the maturity, capability, and capacity of sustainability practice within 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 minimised;
  • the extent to which there is an increase in the use of circular economy principles;
  • the number of suppliers contracted to provide goods and services to the Australian Government that have a Supplier Environmental Sustainability Plan (SESP) in place.

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

Extending its support for annual reporting of performance results, the ISC said that it expected this development to also have an important signalling effect for private sector procurement.

“Ensuring that progress is reported is essential to understanding where future efforts need to be directed to see achievement of net zero by 2050. The ISC looks forward to working with suppliers undertaking construction services to ensure that sustainability performance is measured in a way that meets policy reporting obligations and increases impact,” says Hastings.

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