If the amendments are implemented in anything close to their current form, many businesses will need to rethink budgets, procurement strategies, internal processes, and verification evidence well ahead of the 2026/27 measurement period. For some organisations, this will require fundamental changes rather than incremental adjustments to existing approaches.
Below is a high-level summary of the key proposed changes, together with practical context on what they could mean for your business.
Key proposed changes
1. New Transformation Fund under ESD
A new mandatory contribution is proposed under the Enterprise and Supplier Development (ESD) element:
- 3% of NPAT
- 20 points allocated on the scorecard
- Subject to the 40% sub-minimum, meaning failure to meet the requirement could trigger an automatic B-BBEE level drop.
This proposal introduces a direct and recurring cost that many businesses have not previously budgeted for. For companies operating on thin margins, the cash flow, forecasting, and governance implications could be significant and will need to be assessed early.
2. Heavier scorecard weighting (especially ESD)
The overall scorecard becomes meaningfully heavier:
- Total points increase from 109 to 131 (or 142 including bonus points)
- Enterprise and Supplier Development become the dominant element, with materially increased weighting for both QSEs and Generic entities.
This shift places sustained pressure on ESD performance and reduces the ability to offset weaker performance in one area with stronger results elsewhere on the scorecard.
3. Tighter procurement targets
The draft codes place stronger emphasis on procurement from 100% Black-owned suppliers, rather than relying on aggregated B-BBEE spend alone. In practice, this is likely to require:
- More granular tracking of supplier ownership and status
- Intentional supplier segmentation by category and ownership profile
- Active development of suppliers where structural gaps exist
For many organisations, existing procurement data will need to be cleaned, validated, and restructured to meet these more specific measurement requirements.
4. More evidence-driven verification
Verification under the ESD element is expected to become far more robust and outcome focused. Contributions will need to demonstrate:
- A documented needs analysis linked directly to beneficiary support
- Measurable and defensible outcomes tied to that support
- Annual monitoring and evaluation, supported by verifiable records, reports, and follow-up evidence
The days of light-touch ESD evidence, once-off initiatives, and loosely documented contributions are clearly numbered.
5. Multinationals
For multinational entities, the draft amendments propose increased flexibility through partial equity equivalent contributions, with scaled timelines linked to the size and nature of the investment. While this offers welcome relief in principle, it will still require careful structuring, approval processes, and long-term planning to implement effectively.
Public comment period
The draft codes are open for public comment for 60 days. This period is critical. It provides businesses and industry bodies with an opportunity to challenge what may be impractical, clarify unintended consequences, and support proposals that are workable, sustainable, and aligned with commercial realities.
What we recommend doing now
While the amendments are not yet final, early preparation will significantly reduce risk and avoid last-minute remediation:
- Model the 3% NPAT contribution into your 2026/27 budgets and medium-term forecasts
- Review and clean up supplier data, and identify gaps against the proposed procurement categories
- Stress-test your ESD strategy, particularly if you are a QSE or rely heavily on ESD for points
- Begin building an audit-ready ESD evidence file, with a clear focus on inputs, outcomes, and ongoing measurement.
