Asda will donate the funds arising from the bag charge to support innovative social enterprises and community projects across Scotland.
The “Asda Community Capital” will donate almost £145,000, which has been raised between October 2014, when the charge came into force, and December 2014, to support innovative social enterprises and community projects across Scotland.
In partnership with Social Investment Scotland (SIS), half of the proceeds will be distributed through loans, helping third sector organisations who otherwise would find it difficult to access funding.
Investment will be available from £10,000 to £50,000 for a period of up to 6 years. Interest will be charged at 5 percent fixed from year two to year six, however no interest will be charged in year one.
In fact, an investee will not have to pay back anything in year one (neither interest nor capital), and no interest will be accrued during this period. Further to this, social enterprises will be able to pay back the loan early, with no penalty, should they be in a position to do so.
Kevin McBride, Asda – “By working with our partners Social Investment Scotland and Foundation Scotland, we have the opportunity to invest innovatively in our local communities, helping to grow the social enterprise sector and supporting local projects in every Asda mile”
The other half of the funds will be donated to Foundation Scotland to be distributed in small grants of up to £2,000.
Estimates suggest that single use carrier bag charging by Asda could raise as much as £800,000 in the first year of carrier bag charges being levied. Although if the policy has the Government’s desired effect, carrier bag use will fall and there will be a subsequent drop in proceeds.
Asda’s approach will ensure that the donated funds have a meaningful benefit for communities long into the future.
Kevin McBride, Asda’s Senior Director for Scotland, said: “We want the carrier bag charge to have long-term social – as well as environmental – benefits. By working with our partners Social Investment Scotland and Foundation Scotland, we have the opportunity to invest innovatively in our local communities, helping to grow the social enterprise sector and supporting local projects in every Asda mile.
“By working in partnership, we can ensure that Asda Community Capital delivers meaningful, sustainable benefits for Scotland, helping to drive growth, create jobs and regenerate communities for the long-term.”
Alastair Davis, CEO, Social Investment Scotland, added: “Scotland’s third sector has an increasingly crucial role to play in fostering thriving communities through local job creation, community engagement and economic development. Many of the enterprises delivering these benefits frequently struggle to access capital, either as a result of their own investment readiness or the lack of suitable financial products.
“Through the creation of Asda’s Community Capital, we’ll be able to support the development of highly motivated, small, community-based enterprises throughout Scotland. In turn, we can help to connect more capital with communities, making a real, measurable and sustainable impact on people’s lives.”