Five minutes on the federal government's new ESP policy

30 Apr 2024

Last week the federal government continued to transition the nation closer towards our climate goals by releasing the Environmentally Sustainable Procurement (ESP) Policy. GBCA commends this important step towards a more sustainable supply chain and greater circular outcomes and to learn more we spoke to Katy Dean, Senior Policy Adviser and Katherine Featherstone, Senior Manager Products and Materials. Read on to find out how the policy will shift industry, and what it means for Green Star, GBCA members and users of Green Star.

1.      What is the ESP Policy and why did it come about?

The ESP Policy is the new guide that Australian Government departments and agencies will use to guide their procurement decision-making when choosing suppliers. It aims to improve environmental sustainability across three focus areas – climate, the environment and circularity.

Australia has legislated a commitment to reduce national greenhouse gas emissions to net zero by 2050. Australia is also transitioning to a circular economy, in which products are either recycled, remanufactured, or re-used after they have served their initial purpose. The transition to a net zero and circular economy requires a shift in how we consume materials and how industry produces and delivers goods and services. The ESP will help the Australian Government to use its significant purchasing power to drive change across industry. Last year the Australian Government released its Net Zero in Government Operations Strategy, and this policy is a key deliverable of both this strategy and the National Waste Policy Action Plan.

The ESP Policy establishes, for the first time, a measurement and reporting framework to track environmental outcomes. The reporting framework specifies a range of metrics, including Green Star certification, that suppliers can use to measure sustainability outcomes.

2.      What does the policy mean for businesses wanting to provide goods and services to the government?

Businesses bidding for government construction services projects above $7.5 million will need to meet certain sustainability outcomes from 1 July 2024.  Tenders for textiles, ICT goods, and furniture, fittings and equipment above $1 million will be part of phase 2, to be implemented from 1 July 2025. Organisations which already use Green Star will be familiar with the reporting requirements and process, so will be comfortable providing a tender using the Green Star pathway.

3.      How do you anticipate that this policy will take Australia a step closer to a circular economy?

By setting clear and consistent requirements for Green Star and other metrics in its procurement process, the Australian Government is sending a clear message to industry that products, materials and services need to achieve better outcomes for the climate, the environment and for circularity. Organisations that want to bid for government contracts will need to build their sustainability capacity and credentials. By embedding these metrics within the ESP Policy, the Australian Government provides industry with greater certainty and consistency about expectations, allowing industry to invest in capacity building, innovation, new technology and sourcing more sustainable materials. This will start to change the supply chain for the better and move us closer to a more circular economy.

4.      What does the ESP policy mean for Green Star?

With Green Star certification specified as a way to satisfy requirements in the ESP Policy, we can expect to see more Green Star-certified government construction projects. This means more buildings achieving best practice benchmarks for carbon emissions, energy and water use, and healthy indoor environments. It will mean increased demand for responsible products, improving the sustainability of the supply chain, boosting the circular economy and increasing our accountability for impacts on nature.

5.      What do we hope to see next from government that will further boost the circular economy?

Alongside the ESP Policy the Circular Economy Ministerial Advisory Group also released its Interim Report. This details a set of recommendations across the six topics of national policy setting, targets and indicators, economics, net zero, design and consumption of products, built environment. Recommendations include developing a National Circular Economy Framework, setting national and sector-based circular targets, including circular economy in the taxonomy for sustainable finance and Green Bonds, and including embodied carbon and circular economy in the National Construction Code. This report was quickly followed by the release of a report from the Office of the Chief Scientist and CSIRO, Australia’s comparative and competitive advantages in transitioning to a circular economy. This finds that our construction industry has some of the best potential to build globally competitive products or services in a circular global economy.

A commitment from government to take action on the recommendations and work with industry to realise the opportunities will turbo-charge the transition to a circular economy.

On invitation of the Australian Government, our CEO Davina Rooney recently represented Australia and GBCA members at the World Circular Economy Forum 2024 in Brussels. We spoke to Davina about her observations from the forum and find out what the key discussion topics were.

Read the interview here.