ESG is no longer simply a reporting obligation or policy aspiration. Increasingly, it is becoming a core procurement and delivery requirement for public infrastructure projects.
As Queensland moves closer to the Brisbane 2032 Olympic and Paralympic Games (the Games), councils and public sector agencies are under increasing pressure to deliver infrastructure and services that are not only timely and cost-effective, but also environmentally sustainable, socially responsible and capable of delivering long-term community value.
Most councils already have well-developed environmental, social and governance policies. The challenge is not intent, it is execution. As project pipelines grow and procurement activity increases in the lead up to the Games, the gap between policy commitments and contract delivery will become harder to ignore.
The key question is not whether an organisation has an environmental, social, and governance (ESG) policy. It is whether its procurement and contract documents are capable of delivering it. The distinction is important. Policy sets expectations. Procurement determines who is selected to deliver them. Contracts determine whether those commitments are actually achieved.
From policy to contract-led delivery
ESG outcomes are delivered through procurement – not policy alone. Policies establish objectives, but procurement design, contract drafting and contract management determine whether those objectives become measurable project outcomes.
This requires ESG to be embedded across the procurement lifecycle, including:
- clearly defining ESG objectives at the outset;
- incorporating those objectives into specifications and scopes of work;
- aligning evaluation criteria with those requirements; and
- capturing commitments in enforceable contract terms.
Without this alignment, ESG commitments often fall away once the contract is awarded.
Evaluation is where ESG succeeds or fails
A common breakdown point is evaluation.
ESG requirements are frequently included in procurement documentation but are not rigorously assessed or consistently applied during tender evaluation. The result is that ESG becomes a stated objective, rather than a genuine decision-making factor.
Effective evaluation requires a clear link between:
- ESG criteria, which define what is being assessed;
- ESG requirements, which set the minimum standard; and
- ESG outcomes, which reflect the actual impact to be delivered.
Evaluation must be evidence-based. Supplier claims should not be accepted at face value. Submissions should be supported by data, prior performance or independent verification. Where ESG is a priority, it must carry meaningful weight in the evaluation process.
This requires evaluation panels to understand not only procurement methodology, but also how proposed ESG initiatives will operate in practice during delivery.
Without this discipline, procurement processes risk selecting outcomes that do not align with stated policy objectives.
Translating ESG into KPIs and deliverables
High-level commitments have limited value unless they are tied to specific, measurable obligations.
Effective ESG drafting focuses on:
- quantifiable targets, such as emissions reduction percentages, energy performance benchmarks or waste diversion rates;
- time-bound obligations linked to project milestones; and
- measurable social outcomes, including local participation targets or supplier diversity metrics.
These obligations should be supported by structured reporting requirements and, where appropriate, independent verification.
Importantly, councils should distinguish between inputs (what a contractor promises to do), outputs (what is delivered) and outcomes (the benefit ultimately achieved). Measuring only activity does not necessarily demonstrate value.
Councils should also consider how ESG performance interacts with commercial mechanisms, including milestone certification, incentives for exceeding targets and consequences for underperformance.
If ESG is not measurable and enforceable, it is unlikely to be delivered.
Local content and Indigenous participation
Driving local economic and social outcomes is a key priority for many councils. However, these objectives often weaken as procurement moves into contract delivery.
To improve outcomes, contracts should:
- include clear local content or participation requirements where appropriate;
- require detailed implementation plans; and
- include reporting obligations that track performance against those commitments.
These requirements must be aligned with market capacity and should also be designed consistently with the applicable procurement framework, funding conditions and any legal constraints affecting participation preferences or tender evaluation.
Early engagement is critical to ensure obligations are realistic and capable of being delivered.
Councils should also be careful not to create obligations that unintentionally reduce competition or exclude otherwise capable suppliers. Local participation requirements should be proportionate, transparent and capable of objective assessment.
Circular economy and lifecycle outcomes
Modern infrastructure procurement is increasingly shifting from lowest upfront cost to whole-of-life value.This includes reducing waste, improving resource efficiency and designing assets for durability, reuse or adaptation.
Procurement and contract frameworks can support this by:
- mandating the use of recycled or sustainable materials where feasible;
- setting measurable waste diversion or recycling targets; and
- requiring design approaches that consider long-term asset performance.
Councils should also consider total cost of ownership. Solutions with a higher upfront cost may deliver better long-term value through reduced energy use, lower maintenance or improved asset life.
Avoiding greenwashing in procurement
As ESG becomes a more prominent evaluation factor, the risk of greenwashing increases.
Suppliers may overstate their credentials or make commitments that are not substantiated.
This risk can be managed by:
- requiring evidence-based submissions at tender stage;
- incorporating ESG commitments into contractual warranties and representations;
- reserving rights to audit and verify performance; and
- linking ESG obligations to clear contractual consequences.
ESG claims should be treated in the same way as any other commercial representation. If they cannot be substantiated, they should not be relied upon.
Independent accreditation, recognised certification schemes and audited performance data can provide greater confidence that claimed ESG outcomes are genuine.
Governance and contract management
Even well-drafted ESG obligations will not deliver outcomes without active management.
Councils need contract management frameworks that:
- assign clear internal responsibility for ESG oversight;
- establish governance reporting to executive management where ESG obligations are significant;
- integrate ESG reporting into regular contract management processes; and
- establish escalation pathways where performance falls short.
In many cases, the issue is not the absence of ESG commitments, but the absence of consistent monitoring and enforcement.
ESG must influence the procurement decision
As infrastructure investment accelerates towards 2032, councils will increasingly be judged not only on what they deliver, but on how they deliver it.
Embedding ESG into procurement and contract management provides an opportunity to demonstrate responsible stewardship of public funds while creating measurable environmental, social and economic benefits for the communities those projects are intended to serve.
How Muscat Tanzer can help
In the lead up to the Games, ESG obligations will increasingly form part of how councils demonstrate responsible procurement, sustainable delivery and public value.
At Muscat Tanzer, we assist councils, council-owned corporations and infrastructure agencies to embed ESG objectives throughout the procurement lifecycle, from early procurement strategy and market engagement, through tender evaluation, contract drafting and ongoing contract management, ensuring policy commitments become practical, measurable and enforceable project outcomes.
Paul Muscat
Director
Muscat Tanzer
