Sustainable procurement

On 31 May 2022, the South Australian Parliament declared a climate emergency and committed to working with business, industry and community to transform the economy to net-zero emissions by 2050. The South Australian Government is accelerating work towards net-zero emission for government operations.

To achieve this ambition, it is crucial that we procure low-carbon goods and services. This not only helps reduce our carbon footprint, but also helps drive the transition to a low-carbon economy. We want to use our procurement power to support suppliers who offer low-carbon products. Doing this can help to:

create viable markets for these products
foster the growth of climate-smart businesses in South Australia.

Through our Sustainable Procurement Policy, we commit to:

identifying sustainability risks and opportunities as part of procurement planning
including appropriate requirements in tender and contract documents.

This is in line with the net-zero emissions target.

Role of suppliers in achieving net-zero emissions

As a supplier, we may ask you to provide information on:

the carbon footprint of your products or services
what actions you are taking, or will take, to reduce emissions.

This helps us to assess your capacity to deliver on the sustainability objectives of the procurement. We will take this information into account in tender evaluation.

Tender questions will vary depending on:

the nature of the procurement
the specific sustainability risks or opportunities involved.

For example, questions might relate to:

greenhouse gas emissions
resilience to climate change
resource efficiency (for example, recycled content or packaging)
other social or environmental aspects.

The level of detail requested will also depend on the value of the procurement. Low-value procurements often require less information than higher value procurements.

Key aspects of the sustainable procurement policy

Sustainability returnable schedules

In some cases, we may ask tenderers to nominate specific commitments relevant to the key sustainability risks or opportunities associated with a procurement.

For example:

the percentage of recycled content in pavement material
the number of diesel-fuelled technologies that will be replaced with solar, hybrid or electric.

These commitments are usually made via a returnable schedule. We will use them to compare offers. We may use them as the basis for contractual requirements or key performance indicators.

Sustainability returnable schedules are generally used for construction procurements more than $50 million.

Sustainability Framework for Asphalt

New and existing suppliers who wish to apply for prequalification for bituminous work will:

be requested to undertake an assessment of their plant
need to use the Australian Flexible Pavements Association’s Sustainability Framework for Asphalt (SF4A) for the assessment.

Bituminous work is sometimes procured indirectly, such as through a head contractor. In such cases, we encourage head contractors to:

request their suppliers’ asphalt plant sustainability score
take this into account in their supplier selection.

Participation in Fleet Pledge Program

We will ask the supplier to sign up to the South Australian Government’s Fleet Pledge Program for contracts that involve significant passenger vehicle travel. For example, where the supplier is likely to need a fleet of more than five passenger vehicles to carry out the service.

Driving South Australia’s fleets towards plug-in electric vehicles is a key action in South Australia’s Electric Vehicle Action Plan. Suppliers that take part in the program can access tools and resources to help them transition to electric fleet vehicles.

Providing emissions information

The government has a goal to achieve net-zero emissions in its government operations. This includes scope 1, 2 and some scope 3 emissions.

We need to be able to measure and report progress against our emission reduction goals. To do this, we may request emissions data from suppliers, particularly for procurements more than $50 million. Emissions data can also help procurers compare and select products with lower lifecycle impacts.

Understanding scope 1, 2 and 3 emissions

Scope 1 emissions are the direct emissions from sources owned or controlled by an organisation. For the South Australian Government, this includes fuel used in our public transport fleet.
Scope 2 emissions are indirect emissions from the electricity we purchase.
Scope 3 emissions are all other emissions associated with our activities. This includes emissions generated from the goods and services we procure.

Quantifying carbon emissions can be straightforward or very complex. This depends on the nature of the product or service. Many suppliers now provide Environment Product Declarations for their products. These estimate the carbon emissions generated per unit of that product, from raw material extraction through to sale of the product.

The carbon intensity of many types of services can also be quantified and compared. For example, we may ask cloud services providers to provide their carbon emissions per CPU-hour, which reflects:

how energy efficient their data centres are
the proportion of renewables used.

We may request suppliers to provide emissions data:

upfront during the tender stage to help us make comparisons
during delivery to enable tracking and reporting of emissions.

Procurements with multiple activities over extended periods

For procurements that involve multiple activities over extended periods, such as facilities management, it is not practicable to provide an emissions estimate upfront. In such cases, we may ask tenderers to provide:

information on their proposed approach to reduce emissions associated with the contract
examples of the steps they have taken to reduce emissions in their value chain.

The contract may also include requirements for the supplier to:

establish an emission baseline for the goods or services being delivered
develop emission reduction plan, including key performance indicators and reporting.

Example

See an example of a simple emission reduction plan for a mailroom services contract.

Requirement for certain suppliers to have organisational emission reduction targets

From mid-2024, suppliers tendering for work valued at more than $50 million must provide evidence that they have an organisational emission reduction target(s) addressing:

scope 1 and 2 emissions (from their own fuel and electricity use)
at least one scope 3 embodied emission source in their supply chain.

Understanding scope 1, 2 and 3 emissions

Scope 1 emissions are the direct emissions from sources owned or controlled by the organisation. For example, fuel used in a construction plant.
Scope 2 emissions are indirect emissions from electricity purchased by the organisation.
Scope 3 emissions are all other emissions associated with the organisation's activities. This includes emissions generated from goods and services the organisation procures.

The emission reduction targets must be:

SMART (Specific, Measurable, Attainable, Realistic and Timebound)
publicly available on the supplier’s website.

Tenderers must provide a public URL link to the emission reduction* target. The commitment or target can be any form of a SMART target. The science-based target methodology is recognised as best practice. However, it is not mandated. Organisations can establish targets that work for their scale and level of experience.

Case study examples

You can find examples of organisational emission reduction targets in the Embodied Carbon Reduction Pledge Policy.

Download the policy from Materials Embodied Carbon Leaders Alliance.

Our delivery partners must address at least one scope 3 embodied emission source. This is designed to ensure they are taking steps to manage emissions in their supply chains.

Note that the requirement is for an emission reduction commitment or target, not offsetting. We do not discourage offsetting carbon as it is a strong interim step. However, suppliers must also have a commitment or target to reduce emissions.

Example format of an initial emission reduction plan for a mailroom services contract

Key emission sources

Baseline (year 1) emissions

Emission source	Quantity	Emissions factor	Emissions	% of total
Fuel used in delivery vehicles
Electricity used in depots and office
Packaging materials
Cloud data services

Emission reduction plan

Emission source	Target	Actions*	Key performance indicators
Fuel used in delivery vehicles	Reduce emissions from fuel use by X% by year X	Transition to electric vehicles	Emissions per km (fleet average) % fleet that is hybrid or electric Implement scheduling software to optimise trips
Fuel used in delivery vehicles	Reduce emissions from fuel use by X% by year X	% reduction in emissions from delivery vehicles
Electricity used in depots and office	Reduce emissions from depot/offices by X% by year X	Commission Type 2 energy audit by year X Implement recommendations (TBC following audit)	Annual energy consumption per depot or office Annual emissions per depot/office
Electricity used in depots and office	Reduce emissions from depot/offices by X% by year X	Switch to green power by year X
Packaging materials	Reduction in embodied emissions from packaging materials compared to baseline	Seek information from current and alternative suppliers on: embodied carbon and recycled content of current packaging material what low-carbon and/or recycled packaging options are available	Average embodied emissions (gCO2-e/kg) of packaging material Average % recycled content of packaging materials
Cloud data services	Reduction in emissions from cloud data services compared to baseline	Seek information from current and alternative cloud providers on embodied carbon (gCO2-e/CPU-hour) Request price for carbon-neutral cloud service	Emissions (gCO2-e/CPU-hour) of cloud data service