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B-BBEE or CSI: How do businesses create sustainable value?

Broad-based Black Economic Empowerment or Corporate Social Investment? These are often posed as paradigmatically different kinds of business initiatives, with very different goals and outcomes. 

But thinking of CSI and B-BBEE as two entirely separate programmes isn’t always helpful. In many cases, it’s helpful to think of B-BBEE as a framework for more effective social investment. 

Goal-based social investment

B-BBEE policy wasn’t created in a vacuum. The B-BBEE codes are designed to leverage the efficiency and intelligence of the private sector to address urgent social needs. 

For example, B-BBEE regulations are especially concerned with finding solutions to the severe problems South Africa faces with unemployment and access to higher education.

Of course, managers are concerned about those sorts of problems, too. Many CSI initiatives aim to address precisely the kinds of social issues as B-BBEE policy.

So, why the sharp distinction? 

CSI in the real world

One issue is that popular misconceptions about either initiative can sometimes become accepted wisdom. CSI is just a PR stunt. Or B-BBEE is simply a box-ticking compliance undertaking.

But these misconceptions are not grounded in practice.

Sure, sometimes ‘CSI’ is deployed simply to make a big media splash without any real substance to show for it. And, of course, when poorly implemented, CSI initiatives and B-BBEE programmes don’t provide much benefit. And, yes, there are compliance box-ticking exercises that are an administrative headache and don’t produce all that much good.

But that’s true for any initiative. And any serious business leader appreciates that, ultimately, it’s how you put a plan into practise that really matters.

A framework for doing good 

If B-BBEE and CSI have overlapping goals, many managers may still value the apparent flexibility and freedom to create their own CSI initiatives. After all, B-BBEE sets out very precise (and, admittedly, complex) compliance rules.

However, there are two important factors to bear in mind. Firstly, B-BBEE offers more leeway for creative social development than many people realise. A quick glance at the BEE123 SED directory, a list of organisations that support Socio-Economic Development, reveals the diverse opportunities for meeting the SED element of the B-BBBEE scorecard. Whatever your company’s vision for a better South Africa, it’s likely you can achieve it with the right SED partner. 

Secondly, the B-BBEE framework has rules, defined goals and monitoring requirements for a reason. It’s not bureaucracy for bureaucracy’s sake. 

When results matter

In practice, working to meet the rigorous compliance demands of a strategic B-BBBEE initiative strongly incentivises you to partner with credible organisations and requires ongoing monitoring and reporting. 

In other words, when it comes to producing social good via B-BBEE, results are non-negotiable. If you don’t realise the initiative’s goals, you often fail to meet the criteria for B-BBEE compliance.  

Now, this is not to say that all good CSI is really B-BBEE. There will be many good CSI initiatives that don’t consider the B-BBEE codes at all. And plenty of B-BBEE compliance programmes don’t resemble our ordinary understanding of CSI.

But, by having a richer understanding of both, managers can make smarter decisions about how to achieve their companies’ social goals and make a sustainable impact, while producing real value.

Turn your social vision into practical reality

BEE123 provides market-leading B-BBEE compliance software and advisory services to make managing B-BBEE compliance simpler and more effective. 

Ultimately, our approach is based on the philosophy that B-BBEE is an opportunity to be seized, not merely a problem to be overcome.

Through our experiences, expertise and network of partners, we’re committed to working with you to turn your most ambitious vision into reality, while ensuring you meet the most stringent B-BBEE compliance requirements. 

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