What is Socio-Economic Development and why is it different to Corporate Social Responsibility?
In recent months, there has been some confusion surrounding the activities relating to Socio-Economic Development (SED) from a B-BBEE perspective, and Corporate Social Responsibility (CSR). Let’s look at the definition of each of these elements.
Socio-Economic Development (SED) is defined in the B-BBEE Codes, as monetary or non-monetary contributions implemented for communities, natural persons or groups of natural persons, where at least 75% of the beneficiaries are black people. The objective of SED is the promotion of sustainable access to the economy for the beneficiaries.
The most common contributions under SED are as follows:
- Development programmes for black women, black youth, black disabled people as well as black people living in rural areas.
- Support for education programmes, resources and materials at primary, secondary and tertiary education levels, as well as bursaries and scholarships.
Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company become more conscious of the impact that they can have on all aspects of society, including economic, social and environmental. This means that in the ordinary running of a business, a company should operate in ways that enhance the society and the environment in positive ways.
From the above definitions, it can be seen that while there can be an overlap in some of the activities for CSR and SED, it does not mean that these are the same initiatives. The focus of SED is to uplift specific black people and communities through targeted contributions that will provide the beneficiaries with access to the economy, through either Skills Development, Healthcare, or Early Childhood Development Programmes.
While the focus of CSR is to be a good corporate social citizen. This includes running the company in an environmentally friendly manner, providing assistance in the form of donations to NPOs as well as hosting social events which raise awareness to social issues.
While some of the contributions made under CSR can qualify as SED, we must not get these initiatives confused. These are two very different initiatives and in order to not lose out on B-BBEE points, SED activities must be aligned with what is outlined in the B-BBEE codes.
To find out if your CSR is aligned to SED as defined by B-BBEE, please don’t hesitate to contact us at EconoBEE.