We want our buying power to make a difference beyond the financial value of the goods and services we purchase. We want to contribute to a fair, inclusive and environmentally and socially sustainable community for all, via our suppliers and supply chains.
The Environment, Social and Governance (ESG) Procurement Framework aligns City of Melbourne's procurement decisions with our sustainability commitments, goals, targets and objectives by:
- defining our key ESG priorities and objectives, as decided by the Council
- assisting purchasing decisions to ensure ESG outcomes through procurement is our business-as-usual
- ensuring the whole organisation consistently prioritises ESG outcomes through procurement
- encouraging buyers to think strategically about environmental and societal risks and opportunities and work more closely with suppliers.
Our ESG priorities
We aim to promote environmentally sustainable business practices by:
- measuring and reducing carbon emissions in our supply chain
- stimulating a circular economy by collaborating with existing and new suppliers to improve environmental management to deliver long-term circular economy practices
- enhancing biodiversity and climate resilience by supporting healthy ecosystems and collaborating with organisations to address climate risks and build community resilience.
We aim to elevate the inherent social value of doing business by:
- increasing opportunities for Aboriginal businesses and communities to address inequality and strengthen their role in the Melbourne economy
- increasing equity, inclusion and wellbeing for marginalised communities.
We aim to work with suppliers whose business practices meet legislative requirements and whose principles align with ours by:
- promoting fair workplaces, including gender equality, diversity, equal opportunities, and National Employment Standards.
- ensuring suppliers support safe workplaces that comply with occupational health and safety, modern slavery and child-safe legislation.
Alignment with the Sustainable Development Goals
The Sustainable Development Goals are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. Achieving sustainable development is the most critical challenge facing our generation.
Our procurement policy and ESG framework directly support many of the goals.
ESG Procurement Framework
Our ESG procurement framework has been designed to support us to achieve these ESG priorities and objectives through procurement process. It explains what we mean by ESG and details how we guide staff to embed it in their decision-making when we buy goods and services. The framework is iterative: we regularly update it to ensure it remains current with our priorities and the expectations of our community.
Harmful industries
We aim to reduce relationships with suppliers who engage with harmful industries to ensure our procurement decisions align with our Environmental, Social and Governance commitments.
The City of Melbourne is developing an ethical screening process to help identify risks and opportunities and create partnerships with suppliers that prioritise social responsibility and environmental stewardship.
Process
Suppliers may be required to disclose any relationships with industries that are deemed harmful when submitting a tender or quotation to City of Melbourne.
Declaring a relationship with a harmful industry does not automatically make suppliers ineligible to be awarded a contract. However, it will be considered as part of the risk assessment process. Mitigations proposed by suppliers will also be considered in this context.
What relationships do suppliers need to declare?
Any planned, current or within the past 12-month operations the supplier, their parent company or subsidiaries associated with; fossil fuels, deforestation, tobacco and related products, armaments or gambling.
Those suppliers that are unsure whether their organisation's engagement constitutes a relationship with a harmful industry, it is advisable to declare it.
Assessment
Any declarations of a relationship with a harmful industry as part of a supplier submission will require a proposed mitigation management plan which outlines how the supplier will reduce the risks posed by the relationships.
During the compliance check phase of the evaluation, a risk-based assessment of the declaration and proposed mitigation management plan is undertaken following City of Melbourne’s processes.
The City of Melbourne’s risk assessment will assess each relationship on its own merits. Harmful industry declarations will play a role in the evaluation and awarding of contracts, alongside other criteria relevant to procurement, with ethical screening also considered. Each assessment will be made on a case-by-case basis. Suppliers must also consider that if successful and awarded a City of Melbourne contract, they will need to declare to Council any harmful industry relationship that may arise during the life of the agreement.
