What projects will a new environment and sustainability reporting policy apply to, and how should engineers prepare? Construction engineer and lawyer RJ Serrano CPEng explains what you need to know.
What is the Environmentally Sustainable Procurement Policy and Reporting Framework?
The Environmentally Sustainable Procurement (ESP) Policy and Reporting Framework is a procurement connected policy that mandates the integration of sustainability principles into government procurement processes.
The policy aims to minimise environmental impacts and promote resource efficiency of government projects and their delivery. It mandates detailed reporting on sustainability metrics such as carbon emissions and material recycling to monitor and improve the environmental performance of government procurements.
Engineers are expected to deliver outcomes that do not compromise the ability of future life to enjoy the same or better environment, health, wellbeing and safety as currently enjoyed. As an engineer, getting ready for the ESP policy means adopting practices that align with its sustainability goals.
What projects will the ESP policy apply to?
The ESP policy applies to future projects with non-corporate Commonwealth entities and prescribed corporate Commonwealth entities, as listed in the Public Governance, Performance and Accountability Rule 2014. Other government entities are encouraged to adopt the policy to support its environmental objectives.
The policy targets carbon-intensive industries, notably construction services due to their significant carbon footprint and waste production, and ICT goods to address the growing e-waste problem.
Starting July 1 2024, the policy applies to construction projects of more than $7.5 million, and from July 1 2025 it extends to furniture, fittings and equipment, ICT goods and textiles for projects of more than $1 million.
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What engineers can expect from future government procurement processes?
If you’re tendering for government projects, you might already be incorporating environmental sustainability into your proposals due to the Commonwealth Procurement Rules. The ESP policy, however, goes beyond the status quo by mandating that government entities consider sustainability.
You will need to outline how you will optimise environmental sustainability in delivering your services or goods through your supplier environmental sustainability plan (SESP).
What is an SESP?
You’ll need to include an SESP in your tender documentation. It may include a reporting template to collect data on your project’s sustainability outcomes, which helps evaluate how well the procurement meets environmental goals. The SESP must address key areas such as how you will implement sustainable practices, opportunities for innovation, and your overall corporate sustainability performance.
For construction services, there are two types of SESP templates available, depending on whether a sustainability rating is being applied or not. Option A involves setting a sustainability rating for the project, utilising third-party certifications such as Green Star for buildings and infrastructure sustainability ratings for infrastructure projects like roads and utilities.
When a sustainability rating is pursued, innovation metrics may also be included to further enhance environmental performance.
Option B is used when no specific sustainability rating is set. Instead, suppliers report against base metrics that cover key sustainability aspects such as waste diversion from landfills, the use of recycled content materials, and the utilisation of low embodied emissions materials.
Additionally, achieving a National Australian Built Environment Rating System (NABERS) embodied carbon rating, when available, is considered under this option.
Who is responsible for meeting SESP targets?
If your tender is selected, your SESP becomes part of the contract and is subject to regular reviews to ensure compliance and continuous improvement. Arguably, imposing such contractual obligations can provide the procuring entity with assurance that the project and its delivery align with the ESP policy’s principles and contribute to broader sustainability targets.
You are responsible for meeting the commitments outlined in your SESP. The principal (the relevant government entity) will verify whether these commitments have been met. Both contracting parties will review the SESP at agreed intervals to identify any risks or opportunities for improvement. If changes to the SESP are necessary during the contract term, they will be mutually agreed upon to ensure the project’s sustainability goals remain aligned.
Notably, ineffective execution of the SESP could result in a breach of your contractual obligations.
How can engineers supplying services to the government prepare for the ESP policy?
Stay ahead by familiarising yourself not only with the ESP policy’s requirements but also with the broader government procurement strategy focusing on climate, environment and circularity. For instance, the Sustainable Procurement Guide offers valuable insights into what procuring officials may consider regarding sustainability.
If you haven’t done so, start documenting the sustainable designs and materials you’ve incorporated into your projects, as well as future considerations and improvements. This can streamline the planning and execution of your SESP.
Invest in training programs for you and your team to build expertise in sustainable practices and stay informed about the latest developments in sustainability and environmental regulations. Your project team drives the project’s sustainable outcomes and, arguably, a well-versed team is more effective in implementing sustainable practices.
Collaborate with suppliers and stakeholders who share your commitment to sustainability, and maintain clear communication about the project’s sustainability goals and progress.
Where to get more information regarding sustainable practices?
There are numerous high-quality resources available to help you enhance your sustainability skills. For instance, the Department of Climate Change, Energy, the Environment and Water offers a masterclass-style video series focused on environmental sustainability in procurement. These videos, along with various case studies, showcase successful applications of sustainable procurement practices.
The Green Building Council of Australia provides free access to thought leadership papers, business cases, reports, roadmaps and guidelines centred on sustainable building practices. Similarly, the Infrastructure Sustainability Council offers technical reports and recordings of webinars related to sustainability in infrastructure projects.
For Engineers Australia members, there are numerous free events available year-round, along with published guidelines on implementing sustainability principles in practice.
These resources are all available online and can significantly aid in developing a comprehensive understanding of sustainable practices in engineering and procurement.
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