The power of procurement

No longer confined to mere cost-cutting measures and supply chain efficiency, procurement now holds the key to unlocking a sustainable future.

The shift to circular procurement is a strategic imperative for our biggest buyers – federal, state and local governments. Every purchase decision carries significant environmental and social implications.

By strategically aligning procurement practices with sustainability goals, organisations can catalyse positive change across industries and communities, and close the loop between design, manufacturing, and recycling.

The Federal Government’s Environmentally Sustainable Procurement Policy (ESP) puts circular procurement on the national agenda and will stimulate industry investment and innovation in sustainable goods and services by generating stable demand at scale. The ESP applies to construction services, furniture, fittings and equipment, ICT goods and textiles. This will begin with construction services at or above $7.5 million from 1 July 2024.

Sustainability Victoria is already operating in this space, working with Victorian councils and industry across the supply chain to ensure more recycled product is bought at-scale.

‘By prioritising recycled materials in procurement, councils can reduce their dependence on virgin resources, divert local “waste” material for reuse or manufacturing, and support local circular economies,’ explains Sustainability Victoria’s Manager Markets Acceleration Shannon Smyth.

‘Embracing recycled products has economic advantages, fosters innovation, creates new markets, and enhances resilience in the face of supply chain disruptions.’

A 2021 analysis of local government procurement identified opportunities to use products and materials containing recycled content in construction and infrastructure projects. The research found that Victorian councils were forecast to spend $12.5 billion on capital works from FY2020–23 with around $5.5 billion of that on projects that had the potential to incorporate large volumes of recycled material.

With significant buying power and strong community ties, councils are uniquely positioned to become leaders in circular procurement.

‘Their procurement systems and process can be more agile to opportunities – not less onerous in terms of quality, but they have a level of community and social expectation to demonstrate progress, not only environmental issues, but also social issues as well,’ says Shannon.

Sustainability Victoria’s Buy Recycled Service is designed to improve confidence in recycled products, uplift procurement processes and enable knowledge sharing and networking within and between councils – 9 in 10 Victorian councils have engaged with Buy Recycled, including all metropolitan councils.

‘Whether it be new kerbside collection models right through to utilising products that are generated through the collection of those new resources – councils are adaptive, agile and willing,’ explains Shannon. ‘Councils are perfectly positioned because they can demonstrate the leadership directly back to community and, in turn, locally industry.’

Sixteen councils and more than 100 attendees from industry, council and state government attended Sustainability Victoria’s Buy Recycled Northern Showcase, held 13 June at Broadmeadows Town Hall at Hume City Council. The event allowed council officials and businesses to learn from local government and industry experts – including sustainability heavyweights Repurpose It, Veolia, Alex Fraser and Close the Loop – about using recycled materials in infrastructure and parks and gardens.

‘The direct feedback that I got from participants was that it allows them to speak directly with suppliers or councils that have used the product to get a clear understanding of what a recycled product does and how it performs when applied in the field. We’re talking warts and all – the good stories and bad stories as well,’ explains Shannon.

Presenting at the Showcase, City of Whittlesea’s Unit Manager Engineering Design and Construction Maurice Serruto understands how procurement can drive great outcomes for councils. ‘Recycling and sustainability are here to stay. You can get some easy wins by looking at the alternatives, like the use of recycled crushed concrete in lieu of quarried crushed rock.

‘In quarter 3 of 2023–24, we have used 300 tonnes of recycled crushed concrete and glass in concrete kerb construction and 2,100 tonnes of reclaimed asphalt,’ explains Maurice. ‘Not only that, we produced zero construction waste to landfill in these road projects with the material taken to resource recovery centres within or close to the City of Whittlesea.’

‘Both industry and small suppliers don’t necessarily have the opportunity to conduct robust in-field testing,’ adds Shannon. ‘So, for them to be able to partner with councils who are trialling a new recycled product at a smaller scale, and essentially provide that baseline data or case study for future, larger scale adoptions, that’s what these events have been really successful at doing over the last couple of years.’

Shannon says that events such as SV’s Buy Recycled Showcase support networking, and demonstrate the circular activity already happening, to help shape what circular can mean for councils and industry in Victoria.

'We’re really keen to continue to work closely with councils to expand what procurement can drive and deliver in terms of a circular, net-zero economy for Victoria,’ says Shannon.

Find out more

Meet our Buy Recycled Champions and learn how Victorian councils are already embedding sustainable procurement practices as their 'business as usual'.