Sanlam Gauge Report says businesses are struggling to meet BBBEE targets

Businesses are not meeting their BBBEE scorecard targets, collectively achieving an average of 87.16% of their contribution targets. This is according to the 2022 Sanlam Gauge Report, the largest independent research taking a holistic measurement of economic transformation in SA.

As a sector-focused research report, it takes stock of how the public and private sectors are succeeding in transforming their businesses and leadership. 

Sanlam, together with the Sunday Times Business Times, shared the results of the 2022 Sanlam Gauge report during a recent virtual conference. 

“This year’s report drills down into the hard facts of economic transformation, what’s working, what is not working and what needs to change with SA’s BBBEE policy. In the second year of research, the study’s sample size has more than tripled while investigating the BBBEE scorecards of more than 10,000 companies grouped in 11 sectors. This increased sample size provides the research with more credibility and provides a valuable benchmark for organisations to measure themselves against,” said Andile Khumalo, co-founder of the Sanlam Gauge Report. 

The report found that most sectors are struggling to meet their targets, with the exception of the socioeconomic development pillar. For the second consecutive year, management control poses the biggest challenge to the newly reconstituted BBBEE Advisory Council — achieving only 55.9% of its target in this year’s report. 

Enterprise and supplier development is the next biggest challenge, achieving only 64.5% of the target. If done correctly, this element of the scorecard offers potential for inclusive economic growth based on encouraging procurement from small black owned businesses, in the process providing them with support to grow and develop. Black ownership achieved 74.8% of the target, a slight drop from last year. 

Socioeconomic development was once again a standout pillar, with companies in this year’s database exceeding the target by an average of 160%. Though some companies use this pillar as an opportunity to “tick the box” by throwing money at it, other larger companies are making an effort to ensure their contributions make a meaningful impact on beneficiaries. 

Given that targets are not being met, there’s a school of thought which says the overall BBBEE strategy needs to be adapted — or overhauled completely — to measure qualitative and quantitative areas to better reflect transformation on the ground. 

Ray-Ann Sedres, chief transformation officer at Sanlam, says the report clearly reveals there’s still a large amount of work to be done where transformation is concerned. 

“To reach their targets, businesses will need to collaborate. Sanlam challenges all businesses to prioritise this critically important journey.”

Historically, there has been no credible source of transformation data available in SA and the Sanlam Gauge has a vision to change that by creating a dedicated database providing credible information. 

“Despite the many challenges surrounding BBBEE, there is no other policy which can alleviate poverty, reduce inequality and create jobs to the same extent. Therefore, we have no choice but to make BEE work — our very future depends on it,” said Khumalo. 

Click here to read and download the full Sanlam Gauge sectoral report.