Broad-Based Black Economic Empowerment

Broad-Based Black Economic Empowerment (B-BBEE) is a mechanism, developed by the South African Government, to address the socio-economic imbalances of the past.
The intended beneficiaries of B-BBEE are historically disadvantaged individuals who are South African citizens. The B-BBEE Codes of Good Practice introduce a measurable
scorecard aimed at encouraging companies operating in South Africa to directly contribute to the economic transformation in the following areas:

• Ownership
• Management Control
• Employment Equity
• Skills Development
• Preferential Procurement
• Enterprise Development
• Corporate Social Development

Companies receive scores based on their individual performance within each element.
Not all businesses are bound by the B-BBEE legislation, but the way it is being implemented means that it will affect almost all players in the economy.
To do business with the South African Government all companies need to make a contribution towards the objectives of B-BBEE.

The Transformation Initiative is primarily created to assist Swedish multinationals with the Ownership element of the scorecard including its Equity Equivalent component. The
initiative will also address the Enterprise development and the Socio-economic development elements of the B-BBEE scorecard.

Equity Equivalent - Instead of selling equity, companies can apply for exemption from transferring ownership. If approved, companies will be allowed to carry out equity equivalents programmes.

Enterprise Development - This element is used to support existing, or the fostering of, new Small and Medium-sized Enterprises owned by historically disadvantaged South
Africans in the financial and other sectors of the economy.

Socio-Economic Development - This element encourages companies to come up with initiatives aimed at directly providing historically disadvantaged South Africans with a
means of becoming economically active or initiatives intended to facilitate access to the economy. This element of the scorecard supports CSR projects.