Overview

This Bill aims to help co-operative and community benefit societies raise money to invest in environmentally sustainable projects. It introduces a new type of share ("green share") with specific restrictions to ensure the funds are used appropriately and for the long-term benefit of the environment.

Description

The bill amends the Co-operative and Community Benefit Societies Act 2014 to allow these societies to issue "green shares" to raise capital for environmentally sustainable investments. These investments must substantially contribute to at least one environmental sustainability goal (e.g., low-carbon society or biodiversity) without significantly harming another.

Green Share Features: Green shares are transferable but not withdrawable. Holders have one vote regardless of the number of shares held, receive only standard compensation, and are only repaid their nominal value upon redemption or liquidation. They also have restricted voting rights on certain key decisions like mergers or conversions to company status.

Restrictions and Protections: The bill includes provisions to prevent the misuse of green shares, including exploitation of tax loopholes and investment fraud. The Treasury will create regulations to manage these aspects and may even introduce pilot schemes. It also aims to prevent the distribution of capital surpluses to shareholders beyond the nominal value of their shares.

Conversion Restrictions: The bill allows societies with green shares to permanently restrict their conversion into a company. The Treasury will also create regulations to manage the acquisition of a society’s own shares.

Government Spending

The bill does not directly specify government spending figures. However, it will require resources from the Treasury to create and administer the necessary regulations, and potentially to fund pilot schemes.

Groups Affected

• Co-operative and community benefit societies: These societies will gain the ability to access new funding sources for environmentally sustainable projects, but will face restrictions on how these funds are managed and how the society can be restructured.
• Investors: Individuals and organizations investing in green shares will have limited rights and returns compared to traditional shares but will contribute to environmentally sustainable projects.
• Treasury: The Treasury will be responsible for creating and implementing regulations to govern green shares, including those designed to prevent abuse and fraud.

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