Tracking transformation: Sanlam Gauge 2022 report to 'drill deeper' into BBBEE

Sanlam, the largest non-banking financial services group in Africa, has continued its partnership with Arena Holdings, the publisher of the Sunday Times Business Times, and KhumaloCo, with the second iteration of the Sanlam Gauge report set to be published in 2022.

The Sanlam Gauge was launched in 2021 as the first consolidated research report of its kind to provide a holistic measurement of economic transformation in SA, accounting for all elements of broad-based black economic empowerment (BBBEE). 

The 2022 Sanlam Gauge will once again deliver insights on sectoral, rather than individual, company performance to provide a more defined view of how sectors within SA are transforming, so that players can work together to pull specific levers to set in motion meaningful inclusivity, growth and transformation of their industries. 

The Intellidex-led research for the 2022 Sanlam Gauge relies on BBBEE scorecards from a sample of more than 2,200 companies, grouped into sectors using the international Standard Industrial Classification (SIC) Codes.

Companies are then assigned to the 11 sectors of the BBBEE classifications system:

1. Agriculture;
2. Construction;
3. Defence;
4. Financial;
5. Forestry;
6. Information communications technology (ICT);
7. Integrated transport;
8. Marketing, advertising and communications;
9. Property;
10. Tourism; and
11. Generic.

Companies are assigned to the codes they are measured against. 

Andile Khumalo, co-founder of the Sanlam Gauge and CEO of KhumaloCo, says that the 2022 research will be focused on achieving greater granularity within sectors to understand more clearly where certain industries are underperforming.

“We have extended our research by tracking sample company progress over the previous 10 years, to really see how SA Inc has performed historically when it comes to transformation. This enables us, for example, to track the progress over the past 10 years of skills development within the integrated transport sector, or management control within the financial sector,” says Khumalo. “Within that data we’re seeking trends that may be linked to specific events or legislation to try to achieve a better understanding of what drives transformation and what hinders it.”

In addition, the 2022 research will drill deeper to examine the subsectors within many of the consolidated sectors. The BBBEE scores of these subsectors will also be released.

“A good example is the ICT sector which includes IT companies like Microsoft, as well as telcos like MTN and Vodacom. This means that the Sanlam Gauge will be able to separate the IT companies from the telcos, lending itself to better insights and research,” Khumalo says.

Similarly, the generic scorecard companies — which form a large percentage of the sample population, reflective of the current reality — will be dissected more carefully.

This grouping houses important sectors and the Sanlam Gauge will reflect scores of the manufacturing and mining sectors, as well as the wholesale and retail sector. It will drill down more, reflecting scores of subsectors within those broader sectors. For example, the motor vehicle subsector’s scores are carved out from the rest of the wholesale and retail sector. 

This year sector councils will be engaged before the Sanlam Gauge is published, allowing input from those tasked with driving transformation in the various sectors of the research report.  

Karl Socikwa, group CEO of market development & sustainability at Sanlam, says SA’s Gini coefficient (a measure of income inequality) is now the highest in the world, according to the 2022 World Bank report.

“The country has a reputation as one of the most unequal societies globally, and the value of the Sanlam Gauge is therefore critical in providing greater transparency to areas of business where work needs to be done in becoming more inclusive and representative,” says Socikwa. “As the country looks to rehabilitate the economy after two years of pandemic lockdown, transformation remains a vital issue.” 

The Sanlam Gauge continues its role as a platform that facilitates debate on the pace of socioeconomic transformation of the SA economy, to drive action that propels the country forward towards a more inclusive economy, and to safeguard the integrity of BBBEE legislation. 

The second Sanlam Gauge event will take place on July 20 2022, presented by Arena Events. This will be followed by the publication of the highly anticipated Sanlam Gauge research findings in the Sunday Times Business Times. 

For more insight visit Sanlamgauge.co.za.

This article was paid for by Sanlam.