About

This objective contributes to maximising the value of products and materials by keeping them in use for as long as possible. A priority action is to preference the use of recycled content on an ‘if not, why not’ basis as outlined in the NSW Waste and Sustainable Materials Strategy. This means prioritising the purchase of products and materials that contain recycled content where there’s no significant additional cost or negative impacts on performance or the environment. The NSW Circular Economy Policy Statement sets the ambition for a circular economy in NSW and highlights procurement as a way to lead by example. By purchasing products that contain recycled materials and have high circularity, the government stimulates the markets for recycled products and circularity.

What is a circular economy?

The transition to a circular economy is a priority for the NSW Government. We want to move away from a linear economy, which is an economic model where resources are extracted, transformed into products, used and then discarded as waste.

In contrast, a circular economy model optimises resource use. A circular economy minimises waste and maximises the value of products, materials, and resources through a system of closed-loop production, consumption, and recycling as shown in Figure 6.

Figure 6 also shows the '10 Rs of Circularity', developed by Jacqueline Cramer in Building a Circular Future: Ten Takeaways for Global Changemakers.  The 10 Rs provides a hierarchy for circularity approaches and should be considered in the procurement process to achieve the best circular economy outcomes.

Figure 6. 10 Rs of Circularity. Source: Building a Circular Future: Ten Takeaways for Global Changemakers.

This objective contributes to achieving NSW’s emission reduction targets by procuring low-carbon materials and products, and by supporting suppliers that invest in reducing their emissions.

What is net zero?

Net zero refers to achieving a balance between the greenhouse gas emissions released into the atmosphere and the emissions being removed from the atmosphere. Reaching net zero greenhouse gas emissions by 2050 is necessary to achieve governments’ commitment in the Paris Agreement to keep global temperature rise well below 2 degrees Celsius and avoid the worst impacts of climate change. A significant reduction in emissions generated by human activity is required to achieve net zero.

Under the Climate Change (Net Zero Future) Act 2023 (NSW) there are 3 legislated targets to reduce greenhouse gas emissions in NSW:

• A 50% reduction on 2005 levels by 2030
• A 70% reduction on 2005 levels by 2035
• Net zero by 2050.

The act sets an objective for NSW to be more resilient to the changing climate and establishes the independent Net Zero Commission. The act also provides principles for NSW policymakers, including identifying responsibilities for the NSW Government to urgently develop and implement best-practice approaches to addressing climate change.

The NSW Government Net Zero Plan Stage 1: 2020-2030 outlines four net zero priorities. See Figure 7.

The Government Sector Finance Amendment (Annual Reporting Requirements) Regulation 2023 requires annual reporting on metrics and targets to manage climate- related risks and opportunities.

This objective encourages consideration of products and services that enhance energy and water efficiency in procurement processes. It seeks to embed procurement specifications that align with or exceed requirements under the Government Resource Efficiency Policy. It also encourages consideration of the water efficiency goals outlined in the NSW Water Strategy.

This objective contributes to the reduction in air, water and soil pollution through the procurement of goods and services that responsibly manage pollutants. This supports healthy environments by minimising or eliminating air pollutants in line with the NSW Clean Air Strategy, and safeguards ecosystems and improves river catchment health in line with the NSW Water Strategy.

This objective considers climate change risks and potential adaptation measures to enhance the resilience of NSW Government assets, communities and natural capital assets in line with the NSW Climate Change Adaptation Strategy.

This objective explores opportunities to protect habitat and biodiversity by procuring nature-positive goods and services in line with the NSW Natural Capital Statement of Intent. Nature-positive is a term used to describe circumstances where nature (species and ecosystems) is being repaired and is regenerating rather than being in decline.

The NSW Government Resource Efficiency Policy (for general government sector agencies with over 100 employees) prescribes the minimum standards for efficient energy, water, waste and air emissions in government operations.

The NSW Waste and Sustainable Materials Strategy 2041: Stage 1 –2021-2027 focuses on the environmental benefits and economic opportunities in sustainable waste management. Under the strategy, all NSW Government agencies are required to preference products that contain recycled content on an ‘if not, why not’ basis, which means that recycled products should be preferred where there is no significant additional cost or negative impact on performance or the environment.

The SME and Regional Procurement Policy (for procurements above $3 million) requires the tender evaluation process to include a 10% non-price criterion to support the NSW Government’s economic, ethical, environmental and social priorities.

Capital infrastructure and construction projects have specific procurement requirements regarding environmental sustainability:

• NSW Decarbonising Infrastructure Delivery Policy requires a number of actions such as contractual performance requirements for contractors to report on upfront carbon and the development of a carbon management plan. This Policy applies for building sector projects valued over $50 million and all other infrastructure project types valued over $100 million.
• Protection of the Environment Operations Act 1997 aims to protect, restore and enhance the quality of the environment in NSW. It also currently provides the mechanism for the NSW Government to develop a Protection of the Environment Policy.
• Environmental Management Guidelines for Construction (4th Ed.) which provides guidance on how to plan and implement environmental management systems for NSW Government construction projects.