Supermarket chain Asda has announced that it will be donating the proceeds from its carrier bag charge in Scotland to help provide loans and grants to local community projects.

The Single Use Carrier Bags Charge (Scotland) Regulations, which came into effect on 20 October 2014, require retailers to charge shoppers in Scotland a minimum of five pence (5p) for every single-use carrier bag used, in a bid to reduce litter. The charge includes plastic, paper and plant-based bags and will apply to anyone selling goods, even online.

Between October and December 2014, Asda raised almost £145,000 through the levy, which it has placed into a new ‘Asda Community Capital scheme’.

Social Investment Scotland (SIS) will distribute half of the money to third sector organisations. This will be done through loans of between £10,000 and £50,000 to help provide investment capital to new social enterprises that ‘otherwise would find it difficult to access funds’.

Interest will not be charged during the first year of investment and from the second year, all interest raised on the Community Capital loans will be reinvested to support ‘good causes’.

The other half of the bag charge proceeds will be donated to the charity Foundation Scotland to be distributed to community projects via small grants. Asda employees and customers in Scotland will have the opportunity to nominate local projects and good causes that would benefit from Asda Community Capital grants of up to £2,000. To ensure the grants are as ‘locally relevant as possible’, regional selection panels of Asda employees will select the winning projects from those nominated.

It is hoped that the Asda Community Capital scheme will provide around £500,000 to community projects by October 2015, which will ‘have a meaningful benefit for communities long into the future’.

‘Delivering meaningful, sustainable benefits for Scotland’

Speaking of the scheme, Kevin McBride, Asda’s Senior Director for Scotland, commented: “At Asda, 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.”

Toughing on the loan-scheme, Alastair Davis, CEO of SIS, stated: “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.

“Given that we’ll only be lending to organisations that can become financially sustainable, we can ensure that the funds will be eventually recycled to support other enterprises who are seeking to develop and grow. It’s a really exciting venture and one that we’re very proud to be part of.”

Giles Ruck, Chief Executive of Foundation Scotland, stated that the organisation was “delighted” to be involved with the grant side of the scheme, adding that it would use its “knowledge to ensure that all the funds raised will help improve and strengthen the communities around ASDA stores across Scotland.”

Tesco proceeds to go to Keep Scotland Beautiful

Last year, rival supermarket chain Tesco called on its customers to vote for the charity that they thought should receive the proceeds of the Scottish bag charge. It was revealed in September that all monies raised from the charge (approximately £1 million a year) would be going to anti-litter campaigners Keep Scotland Beautiful for the year 2014/15.

Keep Scotland Beautiful has pledged to use the financial support to undertake ‘a million actions to improve local environments all across Scotland’.

Find out more about the carrier bag charge in Scotland or the SIS Community Capital loan scheme.