Sustainability Report 2005-2006

Department of the Environment and Water Resources, 2007

Economic performance

Expenditure

PA12: Sustainability criteria for expenditures and financial commitments

Goals 2005-06

Assess the extent of environmental purchasing activity under Outcomes 1 and 2 and identify opportunities to improve purchasing performance.
Complete a cost-benefit analysis of opportunities to purchase greenhouse offsets for Outcomes 1 and 2 greenhouse gas emissions (from direct and indirect sources).

Performance 2005-06 and trends

DEH raised 2530 purchase orders in 2005-06 under Outcome 1. These purchase orders represent expenditures and financial commitments. This was a total value of $667 817 066 (over multiple financial years). 28% of the purchase orders raised involved officers considering and applying environmental purchasing criteria as part of their expenditure or financial commitment. This represents commitments of $199 544 920 over multiple financial years. 67% of the purchase orders raised did not involve the consideration of environmental purchasing criteria. This represents commitments of $468 272 146 over multiple financial years.

Actual data on the extent of environmental purchasing activity in purchase orders raised under Outcome 2 are not available.

Opportunities to improve include greater education and dissemination of the environmental criteria for expenditure or financial commitments. This may be achieved through revisions of the relevant Chief Executive Instructions and procurement and grants management guidelines.

Work on the costs and benefits of purchasing greenhouse offsets continued in 2005-06, but was not completed. A range of opportunities for securing offsets has been identified, assessed and costed. This includes both purchasing offsets and also generating some of our own abatement. Work will continue in 2006-07, as part of a new Greenhouse Challenge Plus agreement for DEH.

Commentary

Procurement activity is governed by the relevant legislation and policy discussed in indicator PA11. Specific financial and economic criteria for assessment in procurement activities centre on the core principle underpinning the Commonwealth Procurement Guidelines of value for money. Specific environmental criteria for assessment in purchasing activities can be found on the DEH website at http://www.deh.gov.au/settlements/government/purchasing/index.html. Social criteria for assessment in procurement activities can include OH&S compliance.

DEH officers must consider financial and social criteria in their procurement activities. Data on consideration of environmental criteria is captured through use of the financial information system-a specific field has been created to allow officers to indicate whether environmental considerations were applicable. Social data are not currently collected. There is no specific policy for the consideration of economic sustainability issues, but some procurements for remote sites are conducted with consideration of local economic impacts.

Sustainability criteria in DEH’s procurement policy are not currently required to apply to grants expenditures.

During the 2005-06 reporting period, a supply chain environmental performance survey was carried out to better identify the extent to which environmental issues are a priority for existing suppliers. Data stemming from this survey appears under the EN33 indicator.

Goals 2006-07

Assess the extent of environmental purchasing activity and identify opportunities to improve purchasing performance.

Environmental performance reporting