ESD glossary
Enterprise categories
Measured entity — the business being assessed against the B-BBEE scorecard. Everything else in this glossary is measured relative to this entity.
EME (Exempt Micro Enterprise) — a business with annual turnover of R10 million or less. EMEs don't need a full verification audit — a sworn affidavit confirming turnover is enough.
QSE (Qualifying Small Enterprise) — a business with annual turnover between R10 million and R50 million. QSEs need a full audit by a SANAS-accredited verification agency, measured across five scorecard elements.
Generic enterprise — a business with annual turnover above R50 million. Generic enterprises carry the fullest scorecard obligations and the most detailed verification requirements.
Scorecard basics
Scorecard element — one of the five categories the Generic Codes measure a business against: ownership, management control, skills development, enterprise and supplier development, and socio-economic development. Each carries its own weighting points.
NPAT (Net Profit After Tax) — the profit figure your ESD spend targets are calculated against. Enterprise development and supplier development targets are both set as a percentage of NPAT.
B-BBEE status level — a rating from 1 to 8 (1 being the strongest) that summarises your overall scorecard performance. This is the number that appears on your B-BBEE certificate.
Procurement recognition level — the percentage a client can claim toward their own procurement spend when they buy from you, based on your B-BBEE status level. Level 1 carries 135% recognition; Level 8 carries 10%. This is why your B-BBEE level affects how attractive you are as a supplier, not just your own scorecard.
ESD-specific terms
Beneficiary — the business receiving ESD support. To count toward your scorecard, a beneficiary generally needs to meet the ownership and size thresholds set out in the Codes (typically EME or QSE, with the required Black ownership percentage).
Enterprise development — ESD spend directed at Black-owned businesses generally, not necessarily ones that supply you. Grants, low-interest loans, and mentorship all qualify if they meet the Codes' definitions.
Supplier development — ESD spend directed specifically at Black-owned businesses already in, or being brought into, your supply chain, intended to make them more competitive suppliers over time.
TMPS (Total Measured Procurement Spend) — the total procurement spend a measured entity's preferential procurement score is calculated against.
Transformation Fund — proposed, not yet in force. Draft 2026 amendments to the Codes would let entities contribute 3% of NPAT to a pooled Transformation Fund instead of splitting spend between enterprise and supplier development. Public comment on this proposal closed 30 March 2026; it isn't yet part of the scorecard. See our article on the 2026 draft amendments for the full picture.
Verification terms
SANAS (South African National Accreditation System) — the body that accredits the verification agencies allowed to issue B-BBEE certificates. A certificate from a non-accredited agency isn't valid.
Verification agency — a SANAS-accredited body that audits your scorecard claims against your evidence and issues your B-BBEE certificate.
Measurement period — the 12-month period your scorecard and supporting evidence need to reflect. Beneficiary status, spend, and certificates all need to be current for this specific window, not just current at the time you compile your submission.
Fronting — a deliberate or attempted circumvention of the B-BBEE Act, such as listing a Black person as a director without real management control, or using a Black-owned company as a pass-through with no genuine participation. Fronting is a criminal offence, not just a scorecard risk.
Sources
- QUALIFYING SMALL ENTERPRISE (QSE) & GENERIC CERTIFICATES, SANAS BEE — sanasbee.co.za/qse-certificates
- EMEs, QSEs and Start-up Enterprises, BEE Ratings-SA — beeratings.com/emes-qses-and-start-up-enterprises
- B-BBEE in Procurement: Levels, Scoring & Tenders, Jorpex — jorpex.com/glossary/b-bbee-procurement
- Fronting, Department of Trade, Industry and Competition — thedtic.gov.za/financial-and-non-financial-support/b-bbee/fronting
- Guidelines on Complex Structures & Transactions, and Fronting, dtic — thedtic.gov.za (BEE-GuidelinesComplexstructuresFronting.pdf)