It is important to Downer that our suppliers and contractors share our values and reflect our expectations when doing business with and for us. Downer undertakes a comprehensive prequalification process to ensure our suppliers and subcontractors meet our high standards of business conduct. This includes background checks on financial health, health and safety standards and policies, environmental policies, and adherence to Downer’s key requirements. 

Downer’s standardised Procurement framework, which is supported by a range of best practice platforms, ensures we are engaging with the right suppliers and subcontractors to achieve our business, ethical, Zero Harm and social objectives. Downer’s Procurement team’s key objectives align with Downer’s Pillars and are to:

  • Ensure value for money is delivered across all Downer procurement activities 
  • Meet governance and probity requirements
  • Streamline procurement processes
  • Deliver on our social and sustainable procurement goals.

Downer believes that effective sustainable procurement and sourcing will improve Downer’s reputation, while also supporting our long-term Group-wide sustainability objectives. Downer defines sustainable procurement as the act of adopting social, economic, governance and environmental factors alongside the typical procurement considerations such as price and quality.

In FY22, we engaged a third party to perform an overarching current-state and future-state review of our sustainable procurement practices. The review considered the following social, economic, environmental and governance criteria:

Social

  • Buy local
  • Health and safety
  • Human rights and modern slavery

Economic

  • Total cost of ownership
  • Equitable processes
  • Supply chain efficiency

Governance 

  • Risk management 
  • Compliance 
  • Reporting

Environment

  • Scope 3 emissions 
  • Reduce waste
  • Circular materials

Downer’s definition of social procurement has been embedded into The Downer Standard, and is closely aligned to the principles of ISO 20400 – Sustainable Procurement, which are: Accountability; Transparency, Ethical behaviour; Full and fair opportunity; Respect for shareholders; Respect for law and norms; Respect for human rights; Innovative solutions; Focus on needs; Integration; Analysis of cost; and Continual improvement.

These principles will also inform the creation of a Target Operating Model, which will be built on the current state of Downer’s sustainable procurement activities, with a clear roadmap to the future state framework. This framework, demonstrated below, focuses on four key ESG stage gates in Downer’s existing procurement lifecycle.

Key social procurement initiatives Downer is currently undertaking include:

  • Modern slavery: Refining Downer’s FY22 Modern Slavery Statement, due for release in December 2022, and taking action to meet targets set out in our FY21 Statement
  • Supplier engagement: Refreshing The Downer Standard documentation relating to sustainable procurement requirements of customers, suppliers and subcontractors 
  • Internal audit: Review of procurement practices across various projects to measure compliance with The Downer Standard, with the aim of widening the scope of our sustainable procurement practices. 

In addition, Downer has set the following future targets:

  • Procurement community: Creation of Procurement Leadership Council and community forum to address shared sustainability requirements across the Group 
  • Supplier requirements: Strengthen Downer’s contractual and sourcing documentation to support more rigorous supplier prequalification in order to understand a supplier’s sustainability credentials prior to engagement. 

An example of Downer’s approach to social and sustainable procurement comes from our DM Roads business, which in November 2021 announced a new contract with Good Cycles to deliver vegetation management for the Western Region Maintenance Contract (MRAMS) across the west and north-west of Melbourne, valued in excess of $2 million per year over the next three years. 

Good Cycles and DM Roads will work collaboratively to provide mentorship and coaching through a tailored six-month Supported Employment Program, expanding employee experiences in the field and creating pathways of opportunity for disadvantaged communities. The contract officially commenced on 30 November 2021, and will support Good Cycles to empower young people with barriers to work by offering them employment pathways. It is expected to support more than 20 new employment positions for youth in western Melbourne, with each of these jobs offering vital future opportunities with education and employment partners. 

Good Cycles will provide environmentally sustainable vegetation management and control and bring to life a safe, enhanced streetscape, vibrant economy and long-term social benefits. The contract is an example of DM Roads leading the way in the advancement of social procurement. The team will now build the model into more service contracts to support local communities and deliver value for the Victorian economy. 

DM Roads has set a major industry precedent with this largescale contract, by taking our longstanding partnership with Good Cycles to the next level, supporting the exponential growth of its revenue and assisting a seamless transition into vegetation management. Since November 2019, DM Roads has successfully partnered with Good Cycles to improve the amenity and safety of 66 kilometres of shared user paths along the Hume and Western freeways to deliver the best experience for Melbourne’s western community, replacing nearly 500 kilometres of utility vehicle inspections with e-cargo bikes to make the operation safer and more environmentally friendly for pedestrians and cyclists.

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