Sustainable procurement was once seen as a well-meaning ambition—something to consider if time, budget, and policy allowed. But that mindset no longer holds in today’s public sector. Climate targets are now enshrined in legislation. Government operations face growing public scrutiny. Agencies are directly accountable for reducing carbon and waste.
Sustainability is no longer a peripheral concern. It now sits at the heart of how procurement is planned, evaluated, and delivered. This isn’t just about buying recycled paper or installing energy-efficient lighting. It’s about embedding environmental and social responsibility into every purchasing decision.
What Is Sustainable Procurement?
Sustainable procurement, in essence, is the process of purchasing goods and services in a way that not only achieves value for money across the full lifecycle but also delivers positive environmental, social, and economic outcomes.
This means taking into account not only price and functionality, but also, importantly, factors such as:
- Environmental impacts (e.g., emissions, waste, water use)
- Ethical and social considerations (e.g., modern slavery, Indigenous participation, local employment)
- Whole-of-life costs (e.g., maintenance, energy, and end-of-life disposal)
As outlined by ISO 20400, sustainable procurement supports wider sustainability goals, including climate action, social inclusion, responsible consumption, and supply chain transparency.
Why It Matters in 2025
Procurement’s Role Is Evolving—And Expectations Are Rising
Governments are some of the biggest purchasers in the economy. In Australia, government procurement accounts for more than $75 billion annually at the federal level alone. That purchasing power has massive influence—and with it comes responsibility.
Here’s why sustainable procurement is now non-negotiable for public sector agencies:
1. Environmental Accountability
Government has a duty to lead by example in reducing emissions and waste. Procurement plays a direct role in achieving Australia’s Net Zero by 2050 commitment and supporting the National Waste Policy Action Plan.
In 2025, federal and state agencies are being held to higher standards—particularly around construction, energy, ICT, and fleet procurement.
2. Legislation and Policy Obligations
The Commonwealth Environmentally Sustainable Procurement (ESP) Policy requires all procurements over $1 million in key categories (furniture, ICT, textiles, construction) to meet specified sustainability criteria from July 2025 (dcceew.gov.au).
In addition, state governments such as those in NSW and Victoria have introduced binding guidelines and targets related to emissions, recycled content, circular economy outcomes, and social value requirements.
3. Risk and Resilience
Sustainable procurement helps mitigate supply chain risks—from climate-related disruptions to regulatory and reputational risks associated with unethical suppliers.
Embedding sustainability criteria into procurement evaluations ensures resilience and due diligence in high-risk markets. It also intersects closely with probity in procurement, which underpins transparency, fairness, and integrity in the procurement process. Read more about probity in procurement here.
4. Social Licence and Public Expectations
Procurement decisions are under public scrutiny like never before. Communities expect government to “walk the talk” on climate action and responsible spending.
Recent media coverage, such as the criticism of non-recyclable PPE and excessive packaging in government procurement, has shown that failure to meet sustainability expectations can quickly lead to backlash.
What’s Changed: From Policy to Practice
Sustainable procurement is not new, but what’s different now is urgency, policy clarity, and enforceability.
✅ Commonwealth ESP Policy Expansion
In March 2024, the Australian Government announced the phased rollout of the ESP Policy to additional procurement categories. From July 2025, it will cover:
- ICT hardware (e.g., laptops, servers)
- Textiles and uniforms
- Office and classroom furniture
Each must meet lifecycle environmental standards, including greenhouse gas assessments, product durability, and end-of-life circularity (Budget.gov.au).
Agencies must incorporate these requirements into tender evaluation criteria and contract clauses.
✅ Net Zero in Government Operations Strategy
All government agencies must now develop procurement strategies that support their agency’s carbon reduction plans. This includes tracking embodied carbon in major infrastructure and fleet decisions, as well as selecting low-emissions suppliers where available (pmc.gov.au).
✅ Circular Economy Targets at State Level
The Victorian Government mandates minimum recycled content in major public works and construction procurement. Similarly, the NSW Government’s BuyNSW program requires consideration of waste minimisation and circularity for all procurement categories (buy.nsw.gov.au).
Practical Strategies for Embedding Sustainable Procurement
For procurement professionals, the transition to sustainable procurement isn’t just about ticking compliance boxes—it’s about embedding a whole-of-system mindset.
Here’s how government buyers can make sustainability a core part of their practice:
1. Update Templates and Specifications
Standardise environmental and social sustainability clauses in RFQs, RFTs and contracts. More importantly, avoid defaulting to lowest cost and instead adopt weighted evaluation criteria that prioritise lifecycle value.
Use tools like the Australian Government Sustainable Procurement Guide to inform template language and expectations.
2. Engage Suppliers Early
Hold market sounding sessions or industry briefings to explain your sustainability goals. Many suppliers are ready to innovate, but they need clear signals and support to adapt.
Ask them:
- Can they offer carbon-neutral or recycled content products?
- Are they reporting on emissions or circularity?
- Do they have ethical sourcing certifications?
3. Invest in Capability Building
Sustainability isn’t always intuitive to buyers trained in cost and compliance. Upskill teams in:
- Lifecycle costing
- Circular procurement models
- Supplier ESG evaluation
- Environmental impact measurement
Training can be sourced via platforms like Procurement Learning Centre or in collaboration with local sustainability experts.
4. Build Sustainability into Performance Management
Include sustainability KPIs in supplier contracts and track them. Are products being reused or recycled? Is waste being diverted from landfill? Is supplier emissions data being shared?
Ultimately, make sustainability a measurable, auditable component of performance—not an afterthought.
Addressing the Challenges
Of course, there are real challenges to implementing sustainable procurement—especially in budget-constrained environments.
Challenge 1: Perceived Higher Costs
Sustainable products often have higher upfront prices, but lower operating costs and longer lifespans. For example, energy-efficient lighting or ICT equipment may cost more initially, but save significantly over time.
Solution: Use whole-of-life costing rather than upfront cost to evaluate value for money.
Challenge 2: Supplier Readiness
Not all suppliers can meet sustainability requirements immediately—particularly SMEs or regional businesses.
Solution: Offer transition periods, provide technical guidance, or support supplier development through panels, pre-qualification schemes, or joint ventures.
Challenge 3: Data and Reporting Complexity
Capturing and reporting on emissions, recycled content, or modern slavery compliance can be complex.
Solution: Start small. Choose a few key metrics. In addition, use existing standards (e.g., ISO, ecolabels). Build your reporting maturity gradually.
Why This Is a Moment of Opportunity
Done well, sustainable procurement doesn’t just reduce harm—it creates opportunity:
- Drives innovation in the private sector
- Stimulates demand for ethical, circular, low-carbon goods
- Supports Indigenous, local and social enterprises
- Builds resilience into supply chains
- Delivers better value to citizens over the long term
In 2025, agencies like Transport for NSW, Department of Defence, and Department of Education Victoria are embedding sustainability across procurement pipelines—demonstrating that this shift is not only possible, but powerful.
Final Thoughts: From Trend to Standard Practice
The conversation around sustainable procurement has changed. Today, it’s no longer a ‘nice to have’; moreover, it’s not something that can simply be delegated to the sustainability team. Instead, it has become a core expectation of every procurement professional—and, in addition, a powerful strategic lever for governments that want to be seen as responsible, future-focused, and trusted.
The road ahead requires commitment, collaboration, and capability—but the benefits are worth it. Indeed, every purchasing decision is an opportunity to lead, to influence the market and, ultimately, to deliver more than just goods and services. It’s a chance to invest in a better, fairer, and more sustainable future.
Let’s not waste it.
Further Reading and Resources
- Environmentally Sustainable Procurement Policy – Department of Climate Change, Energy, the Environment and Water
- Net Zero Government Operations Strategy – Department of Prime Minister and Cabinet
