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Detailed guidance for implementation of climate change policy objectives

Find model approaches and further information in relation to implementing climate change policy objectives.

Introduction

Implementation of climate change policy objectives is one of three sustainable procurement objectives included in the Social Procurement Framework.

Corresponding sustainable outcomes

The Social Procurement Framework identifies two sustainable outcomes corresponding to this sustainable procurement objective:

  • project-specific requirements to minimise greenhouse gas emissions
  • procurement of outputs that are resilient against the impacts of climate change

These outcomes are addressed separately below.

Recommended action

Individual procurement activity requirements for government buyers (Table 3 of the Social Procurement Framework) recommends the following actions:

For individual procurement activities valued at or above $20 million (exclusive of GST), government buyers include requirements in relation to greenhouse gas emissions / climate change resilient outputs.

Project-specific requirements to minimise greenhouse gas emissions

Benefits for Victorians

The Climate Change Act 2017 (Vic) recognises the global agreement (the Paris Agreement) to keep global average temperature rise this century to well below 2°C above pre-industrial levels, and to pursue efforts to limit temperature increases to 1.5°C.

A key aspect of the Act is the commitment to reduce Victoria’s greenhouse gas emissions to net zero by 2050. It also provides a framework to manage the risks and opportunities that arise from the transition to a net-zero economy. Victoria’s Renewable Energy (Jobs and Investment) Act 2017 (Vic) legislates the Victorian Renewable Energy Targets of 25% of electricity generated in Victoria by 2020 and 40% by 2025.

Buildings and infrastructure can play an important role in this transition to a net zero emissions future. Long-lived, high-carbon buildings and infrastructure can create a ‘lock-in’ effect, which results in a commitment to high emissions over many years. The construction process itself, as well as the selection of raw materials, can involve the release of large quantities of greenhouse gases.

Throughout the procurement lifecycle, the Victorian Government can:

  • reduce emissions through design features, including low-energy design and incorporating low-carbon materials, helping Victoria to meet its emissions reductions targets
  • use government procurement to stimulate markets for energy-efficient and low-carbon technologies, products and services
  • provide significant cost savings over the life of assets by improving energy efficiency.

Model approach for government buyers

The model approach to delivering this outcome involves two components:

  • require suppliers to commit to achieving specific rating level(s) within nominated industry rating system(s) for design, delivery and operational phases of a project – for example, the Infrastructure Sustainability Council of Australia and Green Building Council of Australia Frameworks
  • require suppliers to commit to developing, implementing and reporting against an Environmental Management Plan to identify and manage risks to achieving and maintaining the specific rating level(s) through the design, delivery and operational phases of a project.

This model approach is designed to be scalable and flexible, to ensure that it remains appropriate for and proportionate to the value, scope, objectives and context of the project.

Further information for government buyers – Victorian Department of Environment, Land, Water and Planning

Industry standards and ratings systems

Industry standards exist to help drive better practice in the planning, design and operation of infrastructure projects. They set industry sustainability standards or benchmarks, which cover energy use, construction from low-impact materials and even the project’s management – covering practices and processes applied throughout the different phases of a project’s design, construction and ongoing operation. Projects that demonstrate they have met these existing standards achieve a rating.

These standards allow a procuring authority to pre-define a rating level for projects that is appropriate for the project’s budget, context and objectives. It is recommended that potential certifications are considered very early in the project planning process, otherwise some standards or credits may be unachievable, or much more difficult to achieve.

Two widely-used ratings systems for infrastructure are the Infrastructure Sustainability Council of Australia and Green Building Council of Australia frameworks.

Infrastructure Sustainability Council of Australia has developed the Infrastructure Sustainability rating system. This provides a performance and outcomes-based framework, covering improved sustainability outcomes (including emissions reduction) through planning, design, construction and operation of infrastructure assets. It evaluates performance of the project against a quadruple bottom line (governance, economic, environment and social performance). Projects are awarded points based on a score out of a possible 100 and potential ratings of ‘commended’, ‘excellent’ or ‘leading’ depending on final score. There are four stages involved in seeking Infrastructure Sustainability Council of Australia certification.

To support this process, the procuring authority should ensure the project appoints an Infrastructure Sustainability Accredited Professional to apply the scheme. This status is achieved by completing the certified Infrastructure Sustainability training programs and paying the appropriate fee. This person is then able to manage the implementation, document collation and application processes.

Further information on the Infrastructure Sustainability rating system.

Green Building Council of Australia Green Star’ framework is a voluntary rating system for buildings in Australia to support the sustainable transformation of Australia’s built environment. It has four separate ‘Green Star’ ratings systems, covering community-scale precinct development, the design and construction of a building, the retrofit of a building and the operational performance of a building. Certification ranges from one star (minimum practice) to six star (world-leading).

Similar to Infrastructure Sustainability Council of Australia, projects must register and compile appropriate documentary evidence for the application process. Formal Green Star certification requires an independent assessment panel to assess the application against the appropriate benchmarks. The final Green Star rating is determined by how many points are achieved in this assessment.

Further information on Green-Star

Examples

The Level Crossing Removal Authority required all level crossing removal projects to achieve, at a minimum, an Infrastructure Sustainability Council of Australia Infrastructure Sustainability rating of ‘Excellent’ and a 4 Star rating from Green Building Council of Australia for Above Ground Rail.

Rail Projects Victoria mandated the Metro Tunnel Project to achieve an Infrastructure Sustainability Council of Australia Infrastructure Sustainability S rating of ‘Excellent’ and a 5 Star Green Building Council of Australia

Environmental Management Plans

To assist in meeting emissions reduction goals, an Environmental Management Plan should be developed. Environmental Management Plans describe how an action might impact on the natural environment in which it occurs and outlines clear commitments from the entity taking the action on how any impacts will be avoided, minimised and managed so that they are environmentally acceptable.

These plans operate in a similar way to risk management plans by identifying potential environmental risks and opportunities and then considering actions to minimise or mitigate those risks. Again, this can be mandated as a requirement for all projects within a category.

The Federal Government’s Environmental Management Plan Guidelines provide general guidance to stakeholders preparing environmental management plans for environmental impact assessments and approvals under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). Regardless of whether an application is made under this legislation, the environmental management plan guidelines can be used to prepare an Environmental Management Plan.

General guidance on establishing environmental management systems that can support the development of an Environmental Management Plan is also available in AS/NZS ISO 14001:2015 Environmental Management Systems – Requirements with Guidance for use (Standards Australia). The whole or parts of this standard can be used to systematically improve environmental management of an organisation and its projects.

If internal capability does not exist within an organisation, a suitably-qualified professional can be appointed to work with the project team to develop an Environmental Management Plan.

Procurement of outputs that are resilient against the impacts of climate change

Benefits for Victorians

Climate change already poses significant physical, operational and economic risks to buildings, infrastructure and the users and communities they serve.

The Victorian Government is responsible for managing risks to its own operations, assets and services, and for ensuring that future assets and services procured are resilient to the impacts of climate change. All departments and agencies need to consider and prepare for climate change impacts to minimise disruptions to services and additional costs, as well as help communities to adapt accordingly.

There is growing recognition that the public and private sectors should be more proactive in how they identify and address climate change risks in relation to assets they build, own and operate. Financial institutions and shareholders are increasingly expecting infrastructure owners and operators to better account for climate change risks in their business planning and governance systems. Relying on insurance to pay for reconstruction or repair after an event is becoming more difficult for assets with high exposure to climate change risks. Instances of uninsurable assets are becoming more common.

Buildings and infrastructure typically have long operating lives, making them vulnerable to long-term climate change impacts, including sea level rises and changing rainfall patterns and increased extreme temperatures. It is often expensive or difficult to retrofit or move these assets once they have been established. In addition, as climate change increases the frequency and severity of natural hazards (such as extreme weather events, floods, droughts, heatwaves and bushfires), it can negatively impact on the health and wellbeing of infrastructure users and building occupants.

Incorporating design features that account for existing and future climate change risks will enable Government to reduce long-term maintenance costs of buildings and infrastructure, maintain asset performance standards, improve usability, and reduce downtime, repair and replacement costs when climate change impacts occur. Taking account of climate change risks when designing buildings and infrastructure can help protect the wellbeing and safety of people and communities who use and depend on these assets.

Model approach for government buyers

The model approach to delivering this outcome involves three components:

Prior to the market approach, government buyers should:  

  • complete a climate risk assessment for a proposed project via a suitably qualified professional in accordance with a recognised standard (for example, ISO 31000:2009 Risk Management – Guidelines and Australian Standard AS 5334 Climate Change Adaptation for Settlements and Infrastructure – a risk-based approach); and 
  • prepare information for potential suppliers on meeting climate risk requirements identified in the climate risk assessment and include specifications in the market approach that set mandatory requirements; and 

Require suppliers to commit to achieving specific rating level(s) within nominated industry rating system(s) (for example, Infrastructure Sustainability Council of Australia, Green Building Council of Australia) and/or developing, implementing and reporting against an Environmental Management Plan.

This model approach is designed to be scalable and flexible, to ensure that it remains appropriate for and proportionate to the value, scope, objectives and context of the project.

Further information for government buyers – Victorian Department of Environment, Land, Water and Planning

The primary method for addressing climate resilience in a building or infrastructure project is to complete a climate change risk assessment during the procurement/design phase.

Typically, a climate change risk assessment will:

  • summarise the project site’s characteristics and the assets on the project site
  • identify the current and future climate impacts that may occur on the project site, relying on best available information (including relevant climate change scenarios, if available)
  • assess the risks that these impacts pose for the assets and people on the project site
  • list actions and responsibilities for addressing these risks, particularly those rated as high or extreme
  • include a mechanism for monitoring and reviewing impacts, risks and actions over time

A climate change risk assessment is a flexible and scalable tool that can be used to assess different types and sizes of projects.

Examples:

  • The Fishermans Bend Climate Readiness Strategy, developed for Australia’s largest urban renewal project at Fishermans Bend, is a comprehensive plan for identifying, assessing and managing climate change risks that may impact on the infrastructure, built environment and community that will be located at Fishermans Bend.
  • The Metro Tunnel Project includes a climate risk assessment and an adaptation plan to address climate risks. This involves measures to protect infrastructure, stations and precincts, as well as use materials that are resilient to climate change.

The climate risk assessment should be developed in accordance with a recognised standard by a suitably qualified professional. The Department of Environment, Land, Water and Planning provides a range of information and resources that can be used to inform a climate risk assessment.

The most commonly used and recognised standards for developing climate change risk assessments are:

  • ISO 31000:2009 and the Australian Greenhouse Office Climate Change Risks and Impacts: A Guide for Government and Business 2006
  • Australian Standard AS 5334:2013 Climate change adaptation for settlements and infrastructure - a risk based approach

‘Suitably-qualified professional’ generally refers to someone with a formal tertiary qualification in environmental science, planning or another related field and has experience in conducting climate change risk assessments.

To ensure that climate change risks are embedded throughout the project, the climate change risks identified in the climate change risk assessment should be incorporated into the broader project risk register.

Where a project involves multiple, discrete packages of work, government buyers should consider developing a climate change and resilience framework that coordinates and standardises climate change risk assessments across the entire project.

Example:  

  • The Level Crossing Removal Program developed a climate change risk assessment framework to guide contractors in how to meet Level Crossing Removal Program’s climate risk requirements outlined in its Sustainability Policy. The framework ensures that all Level Crossing Removal Program projects meet their mandatory minimum requirements for a climate change risk assessment and adaptation actions that respond to any high priority or extreme climate change risks.

As noted in relation to Project-specific requirements to minimise greenhouse gas emissions, consider adopting accepted industry standards in sustainability rating tools. Government buyers can pre-define and specify a specific rating level that is appropriate and proportionate to the project.

If the infrastructure project falls under Victoria’s Critical Infrastructure Resilience Arrangements, consider incorporating the long-term effects of climate change into the emergency risk management planning for the project.

Other approaches

The model approaches outlined in Detailed guidance for opportunities for environmentally sustainable outputs and Detailed guidance for opportunities for environmentally sustainable business practices, which provide guidance on the other sustainable procurement objectives in the Social Procurement Framework, may also contribute to the implementation of Victoria’s Climate Change Policy Objectives.

Tools and support

This content on this page is taken from the Social Procurement Framework – Buyer Guidance Guide to individual procurement activity requirements. Access a pdf or accessible Microsoft Word version of this guide in the social procurement document library.

For more information about social procurement, please contact the Social Procurement team.

Reviewed 08 November 2019

Buying for Victoria

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