City of Melbourne ESG Procurement Framework: What Cleaning Suppliers Must Know to Win Council Contracts product guide

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Why the City of Melbourne's ESG Procurement Framework Matters for Cleaning Suppliers

For cleaning businesses seeking government work in Melbourne, the Victorian Government's Social Procurement Framework is only part of the compliance picture. The City of Melbourne spends over $250 million on goods, services, and works every year — and every dollar of that spend is now subject to a distinct, council-level ESG procurement regime that operates alongside, but separately from, the state framework.

This matters for cleaning suppliers because the council's approach is not a passive policy document. The ESG Procurement Framework aligns City of Melbourne's procurement decisions with its sustainability commitments, goals, targets, and objectives by defining key ESG priorities and objectives as decided by the Council, assisting purchasing decisions to ensure ESG outcomes through procurement is business-as-usual, and encouraging buyers to think strategically about environmental and societal risks and opportunities and work more closely with suppliers.

In practical terms, this means that a cleaning company bidding on a City of Melbourne contract — whether for office cleaning at the Melbourne Town Hall, grounds maintenance in a council park, or facilities services across council-owned assets — must understand the council's ESG framework as a distinct compliance environment, not simply assume that meeting Victorian Government SPF requirements will be sufficient.

This article decodes that framework, explains the ethical screening process, maps the Supplier Code of Conduct obligations, and identifies the specific implications for commercial cleaning service providers.

The Architecture of the City of Melbourne's ESG Procurement Framework

What the Framework Is Designed to Do

The City of Melbourne's ESG procurement framework has been designed to support the council in achieving its ESG priorities and objectives through the procurement process. It explains what the council means by ESG and details how staff are guided to embed it in their decision-making when buying goods and services.

Critically, the framework is iterative: the council regularly updates it to ensure it remains current with its priorities and the expectations of its community. This is not a static compliance exercise. Cleaning suppliers who win contracts must be prepared to adapt to evolving requirements over the life of an agreement.

The Three ESG Priority Areas

The framework is structured around three pillars, each with specific priorities relevant to cleaning procurement:

1. Environmental Sustainability

The framework's environmental sustainability dimension aims to promote sustainable business practices, including ensuring suppliers carry out practices that support biodiversity and climate resilience. For cleaning suppliers, this translates into requirements around chemical management, waste reduction, and energy-efficient equipment — all of which must be demonstrable, not merely claimed.

The council's broader sustainability commitments underscore why these expectations are genuine rather than cosmetic. In 2015, Council passed a resolution to divest from fossil fuels, and in 2016 was the first Council, and one of the first organisations internationally, to introduce 1.5°C science-based targets for its operations.

The council has been certified carbon neutral for its operations every year since 2012 and cut emissions from council operations by 53 per cent since 2013. Suppliers operating in the council's supply chain are expected to reflect — and contribute to — this ambition. (See our guide on Green Cleaning Products and Sustainable Practices: What Melbourne Commercial Cleaners Should Be Using for specific product benchmarks.)

2. Social Sustainability

The social sustainability dimension aims to elevate the inherent social value of doing business, including by increasing the inclusion of people experiencing social or economic exclusion or disadvantage.

For cleaning suppliers, this is the most operationally demanding pillar. The council expects suppliers to demonstrate tangible social outcomes — not aspirational language. The council aims to work with suppliers whose business practices meet legislative requirements and whose principles align with its own by promoting fair workplaces, including gender equality, diversity, equal opportunities, and National Employment Standards.

Cleaning is explicitly identified in Victorian local government guidance as a "leverage" procurement category — one that provides significant social procurement opportunity due to its labour intensity. Leverage categories such as cleaning, maintenance, horticulture, and catering are priority areas for social procurement as they provide significant potential to generate employment outcomes for priority cohorts.

3. Governance

The governance dimension aims to work with suppliers whose business practices meet legislative requirements. Governance priorities supporting safe and fair workplaces are overarching principles considered in all procurements.

Governance is not a standalone evaluation criterion — it is a threshold condition. An evaluation weighting at a minimum of 10 per cent will apply for all procurements. This means that even the smallest council cleaning contract will carry a minimum 10% ESG weighting in its evaluation scorecard, with governance compliance as a floor below which no supplier can fall.

The Ethical Screening Process: What Cleaning Suppliers Must Know

How the Positive and Negative Screening Works

One of the most distinctive features of the City of Melbourne's approach — and one that sets it apart from the Victorian Government's SPF — is its dual ethical screening methodology.

All procurement activity will be subject to a positive and negative ethical screening test.

This means the council evaluates suppliers on both what they do (positive screening — do they generate social and environmental value?) and what they are connected to (negative screening — do they have relationships with harmful industries?).

Harmful Industry Declarations: The Five Categories

The City of Melbourne aims to reduce relationships with suppliers who engage with harmful industries to ensure its procurement decisions align with its ESG commitments. The council is developing an ethical screening process to help identify risks and opportunities and create partnerships with suppliers that prioritise social responsibility and environmental stewardship.

Any planned, current, or within the past 12-month operations of the supplier, their parent company, or subsidiaries associated with fossil fuels, deforestation, tobacco and related products, armaments, or gambling must be disclosed.

For cleaning suppliers, this disclosure obligation extends beyond the cleaning entity itself. A cleaning company owned by a parent group with investments in any of these five categories must disclose that relationship — even if the cleaning operations themselves are entirely separate. This is a critical due diligence point for cleaning businesses operating under holding companies or private equity ownership.

What Happens After a Declaration

Declaring a relationship with a harmful industry does not automatically make suppliers ineligible to be awarded a contract. However, it will be considered as part of the risk assessment process. Mitigations proposed by suppliers will also be considered in this context.

Any declarations of a relationship with a harmful industry as part of a supplier submission will require a proposed mitigation management plan which outlines how the supplier will reduce the risks posed by the relationships. During the compliance check phase of the evaluation, a risk-based assessment of the declaration and proposed mitigation management plan is undertaken following City of Melbourne's processes.

Suppliers must also consider that if successful and awarded a City of Melbourne contract, they will need to declare to Council any harmful industry relationship that may arise during the life of the agreement.

This ongoing disclosure obligation is significant. A cleaning company that is acquired mid-contract by a parent entity with fossil fuel interests, for example, must proactively declare this to the council — it cannot wait for the contract to expire.

The Supplier Code of Conduct: Minimum Obligations for All Cleaning Suppliers

The City of Melbourne's Supplier Code of Conduct establishes the floor of acceptable supplier behaviour. The council views its suppliers as partners and cares about the way business is conducted when providing goods, services, or works to the community.

The Code establishes three core obligation categories directly relevant to cleaning services:

1. Ethical Business Conduct

Suppliers are expected to act with integrity in their business activities, including relationships, practices, sourcing, and operations.

2. Fair and Safe Workplaces

Suppliers are expected to provide a fair and ethical workplace that upholds high standards of human rights and integrates appropriate labour and human rights policies and practices into its business. Suppliers are expected to provide a healthy and safe work environment and integrate sound health and safety management practices into its business.

For cleaning suppliers, this is a direct trigger for Cleaning Accountability Framework (CAF) alignment. The CAF's multi-stakeholder standard for fair labour practices maps directly onto these Code obligations — and cleaning suppliers with CAF certification can credibly demonstrate compliance at tender stage. (See our guide on The Cleaning Accountability Framework: What Melbourne Property Owners and Procurement Teams Need to Know.)

3. Environmental Responsibility

Suppliers are expected to minimise the environmental impact of their operations and maintain environmentally responsible policies and practices.

This obligation is non-negotiable and applies to every contract, regardless of value. Cleaning suppliers should be prepared to document their environmental management approach — ideally through ISO 14001 certification or equivalent — and demonstrate specific practices such as GECA-certified product use and waste diversion protocols.

The Procurement Threshold Structure: When ESG Requirements Escalate

Understanding the council's spend thresholds helps cleaning suppliers calibrate how much ESG documentation to prepare.

If spend is under $2,000, the council seeks one informal quote from the market. When spend is between $2,000 and $50,000 (ex GST), a minimum of two quotes are sought. When spend is between $50,000 and $250,000 (ex GST), a minimum of three quotes are sought. For larger purchases over $250,000 (ex GST), a full tender or Expression of Interest is issued.

For cleaning contracts — which typically recur annually and involve significant labour costs — most council engagements will exceed the $250,000 threshold, triggering a full tender process with formal ESG evaluation criteria. Prior to commencing the sourcing process for all purchase amounts above $250,000 (excl. GST), a Procurement Plan is to be completed. That Procurement Plan will include ESG objectives specific to the contract — objectives that cleaning suppliers must respond to in their tender submissions.

SDG Alignment: How the Council Connects Procurement to Global Goals

The City of Melbourne has committed to the United Nations Sustainable Development Goals (SDGs), with its ESG priorities aligning these goals and 88 localised targets to encourage collaborative action.

This SDG alignment has practical implications for cleaning suppliers. When the council evaluates tender responses, ESG claims that can be mapped to specific SDGs — such as SDG 8 (Decent Work and Economic Growth) through employment of priority jobseekers, or SDG 13 (Climate Action) through carbon-neutral cleaning operations — carry greater weight than generic sustainability statements.

Cleaning suppliers who can demonstrate their contribution to specific SDGs — supported by verifiable data such as employment outcomes, emissions reductions, or social enterprise certifications — are better positioned in this evaluation environment. (See our guide on Measuring and Reporting Social Impact from Your Cleaning Contract for a framework on quantifying these outcomes.)

The Local Supplier Preference: A Competitive Advantage for Melbourne-Based Cleaners

Whilst value for money is a key objective, consideration will also be given for investment in local business and genuine employment opportunities within the City of Melbourne.

The council prefers to use local suppliers within the municipality of Melbourne as one of its core priorities. For cleaning companies operating within the Melbourne municipality, this preference creates a genuine competitive advantage — provided they can also demonstrate ESG alignment. A locally-based cleaning provider that employs Melbourne residents, uses local supply chains, and meets the council's ESG criteria is structurally advantaged over an equivalent interstate or outer-suburban competitor.

Practical Implications: What Cleaning Suppliers Must Prepare

At Tender Stage

Cleaning suppliers bidding on City of Melbourne contracts should prepare the following ESG documentation as standard:

1. Harmful Industry Declaration — A clear statement confirming whether the company, its parent entities, or subsidiaries have had any involvement with fossil fuels, deforestation, tobacco, armaments, or gambling in the past 12 months. If applicable, a mitigation management plan.

2. Workplace Compliance Evidence — Documentation demonstrating compliance with National Employment Standards, OHS legislation, and modern slavery obligations. CAF certification or a Cleaning Accountability Framework engagement plan is strongly recommended. (See our guide on Modern Slavery Risk in Commercial Cleaning: How Melbourne Organisations Can Identify and Mitigate Supply Chain Exposure.)

3. Environmental Management Documentation — Evidence of environmentally responsible practices: ISO 14001 certification, GECA-certified product lists, waste diversion data, and/or carbon neutrality credentials.

4. Social Outcome Commitments — Specific, measurable commitments to employ priority jobseekers, engage social benefit suppliers in the supply chain, or deliver other quantifiable social outcomes. Vague commitments to "diversity" will not satisfy the council's evaluation criteria.

5. SDG Mapping — A clear articulation of which SDGs the supplier's operations contribute to, supported by verifiable data.

During Contract Delivery

The social and sustainable procurement requirements for a project are specified in tender documentation. Bidders are required to demonstrate how they will deliver outcomes by outlining relevant actions in their tender response. If successful, these obligations are then specified in the contract.

If a supplier has committed to certain social and sustainable outcomes in its tender response, buyers will hold them accountable for these commitments. Cleaning suppliers must treat ESG tender commitments as contractual obligations — not aspirational statements.

How the City of Melbourne Framework Differs from Victoria's SPF

Procurement teams and cleaning suppliers must understand that the City of Melbourne's ESG Procurement Framework is not simply a local implementation of the Victorian Government's Social Procurement Framework. Key distinctions include:

(See our guide on Victoria's Social Procurement Framework Explained: Requirements, Thresholds, and Obligations for Cleaning Contracts for a full breakdown of the state-level regime.)

Key Takeaways

• The City of Melbourne spends over $250 million on goods, services, and works every year , making it one of the most significant procurement buyers in the local government sector — with ESG requirements embedded across all spending categories, including cleaning.

• All procurement activity is subject to a positive and negative ethical screening test , meaning cleaning suppliers are evaluated on both the social and environmental value they generate and any harmful industry relationships they or their parent entities hold.

• Harmful industry relationships involving fossil fuels, deforestation, tobacco and related products, armaments, or gambling must be disclosed at tender stage, with a mitigation management plan required if any such relationship exists.

• Governance priorities supporting safe and fair workplaces are overarching principles considered in all procurements, with an evaluation weighting of at minimum 10 per cent applying for all procurements.

• Suppliers awarded a City of Melbourne contract must also declare to Council any harmful industry relationship that may arise during the life of the agreement — making ESG compliance an ongoing contractual obligation, not a one-time tender requirement.

Conclusion

The City of Melbourne's ESG Procurement Framework represents one of the most detailed and operationally demanding local government procurement regimes in Australia. For commercial cleaning suppliers, it creates a clear competitive dynamic: those who invest in genuine ESG capability — verified certifications, documented social outcomes, clean corporate structures, and demonstrable environmental practices — will be structurally advantaged over those who rely on marketing language and unverified claims.

The framework's dual ethical screening process, its explicit harmful industry declaration requirements, its minimum 10% ESG evaluation weighting, and its SDG alignment architecture together create a procurement environment where ESG credibility is not a differentiator — it is a prerequisite.

Cleaning suppliers who approach City of Melbourne tenders with the same rigour they apply to Victorian Government SPF compliance, and who understand the council's distinct priorities and thresholds, will find that this framework rewards preparation and transparency. Those who underestimate its specificity will find themselves screened out at the compliance check stage — regardless of how competitive their pricing is.

For a complete picture of the ESG compliance landscape for Melbourne cleaning suppliers, read our related guides on ESG Certifications and Standards Relevant to Commercial Cleaning Providers in Melbourne, How to Evaluate ESG Claims When Selecting a Commercial Cleaning Provider in Melbourne, and Social Enterprise Cleaning Companies in Melbourne: How They Work and Why They Qualify as Social Benefit Suppliers.

References

• City of Melbourne. "Environmental, Social and Governance (ESG) Procurement." City of Melbourne Official Website, 2024. https://www.melbourne.vic.gov.au/esg-procurement

• City of Melbourne. "Tenders, Contracts and Suppliers." City of Melbourne Official Website, 2024. https://www.melbourne.vic.gov.au/tenders-contracts-and-suppliers

• City of Melbourne. "Procurement Policy and Supplier Code of Conduct." City of Melbourne Official Website, 2024. https://www.melbourne.vic.gov.au/procurement-policy-and-supplier-code-conduct

• City of Melbourne. Procurement Policy. July 2024. https://mvga-prod-files.s3.ap-southeast-4.amazonaws.com/public/2024-08/procurement-policy.pdf

• Victorian Government. "Social Procurement." Buying for Victoria, Department of Treasury and Finance, 2024. https://www.buyingfor.vic.gov.au/social-procurement

• Victorian Government. "About Social Procurement: Suppliers." Buying for Victoria, Department of Treasury and Finance, 2024. https://www.buyingfor.vic.gov.au/about-social-procurement

• Local Government Victoria. Beyond Value for Money: Social Procurement for Victorian Local Government, 2nd edition. Department of Environment, Land, Water and Planning, 2019. https://www.localgovernment.vic.gov.au

• Allens. "How Government Is Integrating Environmental Sustainability into Procurements." Allens Insights, December 2021. https://www.allens.com.au/insights-news/insights/2021/12/how-government-is-integrating-environmental-sustainability-into-procurements

• Cities Power Partnership. "City of Melbourne's Climate and Sustainability Commitments." Cities Power Partnership, 2023. https://citiespowerpartnership.org.au/partners/city-of-melbourne/

• Social Traders / CEDA. "Driving Social Outcomes Through the Power of Procurement." CEDA, 2024. https://www.ceda.com.au/news-and-resources/opinion/corporate-social-responsibility-i-social-compact/driving-social-outcomes-through-the-power-of-procurement