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Kevin James, CEO of Global Carbon Exchange talks to Ryan Bakos, CEO of Bakos Brothers, to discuss the company's sustainability journey.
Bakos Brothers was South Africa's first 100% carbon free retailer – and the world's first carbon free furniture retailer.
Ryan Bakos, Bakos Brothers CEO
Kevin James:
I am sitting with Ryan Bakos, the Chief Executive of Bakos Brothers, a very successful furniture manufacturing and retail business, which has been in business for 40 years. Ryan, please tell me a bit more about the history of the company.
Ryan Bakos:
 The company was founded in 1971 and at the time there were five Bakos brothers, all working for different furniture stores. They decided to join forces and launched Bakos Brothers.
Kevin James:
Ryan, in terms of it being a family business and the strategy you have recently embarked on regarding environmental sustainability – do you think that there is a link between your environmental motivation and the fact that this is potentially a legacy that you are passing on to your children?
Ryan Bakos:
It definitely plays a role. I would love to see Bakos Brothers going for another forty years – and when one looks a hundred years into the future, the planet is in trouble. When one considers population growth and our lack of respect for natural resources, it concerns me – and I realize that I have to make as much noise as possible about trying to ensure that my children and especially my grandchildren can enjoy our wonderful planet. If we don't get vigilant and start pushing – I think there might be big trouble ahead.
Kevin James:
I have been on this path with you since 2009 when Bakos Brothers was the first retailer in South Africa to go carbon neutral, probably at a time when most companies didn't even know what it meant. What motivated you to embark on your sustainability strategy?
Ryan Bakos:
At the time, it did not have anything to do with business; it was a purely emotional decision. I've always been aware of our environment and how human beings don't look after our resources – we just take and give nothing back. When you hear statistics like 55 000 species going extinct every year, you realize that when our ecosystems start crumbling there will be dire results.
Back in 2009 I felt like a test monkey – I was not sure who to turn to for advice. I knew about offsetting and wanted to learn more, I wanted to analyze how the company was doing and where I could make a difference. As I started searching on the internet, I came across Food & Trees for Africa (FTFA), and contacted their founder Jeunesse Park. She was an inspirational woman – and everything just moved on from there.
We started off with you, Kevin, from Global Carbon Exchange, doing a carbon audit to understand our carbon emissions. This was a real eye-opener – it was actually quite frightening how much one small company could emit, especially considering our growth ambitions.
Kevin James:
Let's explore the concept of carbon neutrality – what kinds of projects have you supported in order to achieve your carbon neutral status?
Ryan Bakos:
I've been waiting for technology to become cheaper – such as LED lighting. It used to be about R400 for a 3 watt globe, it is now about R40 for a globe. I was waiting for that to start happening, because I couldn't afford changing the company – and it is quite a large capital outlay to bring in the technology you require to reduce your footprint.
We are currently growing quite fast – we've opened up three new branches in the space of 18 months, so our carbon output is still increasing, despite our efforts to minimize this. It is a bit of a wage war – you cannot stop growth, we want to grow; so we will be doing the light fittings with the Eskom rebates which are now available, and exploring whatever avenues are available to us. At the end of the day, the smaller our footprint – the less carbon credits I have to buy to maintain our carbon neutral status; and ultimately, this impacts the bottom line.
Kevin James:
You started off by supporting the FTFA initiatives by planting trees in urban areas; you've also been involved in financing certain renewable energy projects and bought the emissions reductions from those energy projects – what would you consider the benefits of not only reducing your impact on the environment, but also supporting projects that have social upliftment opportunities.
Ryan Bakos:
There have definitely been huge benefits for us. We've had a lot of PR, probably more than 30 interviews in the last 18 months. I also had the opportunity of being on the front page of Financial Mail, with a very positive article about the company. Not only has the exposure been huge, our clients appreciate it too. In 2009 we had to train our staff about why we want to be carbon neutral, we pushed our status across all media platforms – and we have seen the benefit in the general public gaining that education too.
I wanted to create the awareness that there are companies legitimately trying to make a difference. We wanted consumers to start supporting companies that were trying to save the planet. Unfortunately, the recession has influenced the choices of companies and consumers due to the costs involved in supporting an environmental strategy.
Kevin James:
How far away do you think we are from environmental issues becoming selection criteria for customers when making purchase decisions?
Ryan Bakos:
I am going to link this answer directly to catastrophic climate change. Weather has never appeared as much in the headlines as we have seen of late. The more we experience these extreme weather conditions, the more likely it is that people are going to realize that there is a problem and that mother earth is not happy. People are starting to realize that we are probably responsible for the changes – and they therefore become more likely to take the initiative to be more respectful towards the earth. People will hopefully realize that what they buy will ultimately impact on the planet and start supporting companies that are trying to make a difference.
People need to start talking with their friends about it and start educating others. It comes down to responsibility.
Kevin James:
Apart from the carbon neutral initiative, what else does Bakos Brothers have in the pipeline regarding environmental performance?
Ryan Bakos:
We have been offsetting our retail division (our electricity bill, our trucks, our imports, our staff commutes etc.) – but in the last 18 months we've started going into furniture manufacturing which is a separate business entity. I am currently exploring analysing the carbon impact of making a couch for instance, and educating consumers with the sale of each couch in terms of the product footprint. I'd like to provide them with the opportunity to offset the carbon footprint of the product by planting trees for instance. I am presuming that some consumer will be prepared to spend an extra R300 to offset their purchases.
Kevin James:
How do you feel our South African leaders are responding to the environmental challenges we currently face?
Ryan Bakos:
At least they are aware of the problem and are talking about it; other governments are just keeping quiet. I think we are one of the leaders in the field when it comes to developing nations. I do know that the government is planning on building more coal power stations though – being one of the smallest economies and the 13th largest emitter, that is a concern – and I am hoping that this will be addressed. I am however happy that the government is engaging in this conversation. A company is a drop in the ocean compared to the affect the efforts of a government could have on the environment.
Kevin James:
What are your thoughts regarding the imminent South African carbon tax?
Ryan Bakos:
I have been carbon neutral for about three years now – and I believe that there should be some compensation for the companies that have been offsetting their emissions. The government needs to provide clarity on where the money will be going – and I also have questions about how the government will be offsetting.
It does not seem realistic that companies should be double taxed for trying to save the planet. At the moment, being carbon neutral means being accountable, knowing where the money is going whilst having a positive social impact as well as reducing emissions. A carbon tax should give companies that same peace of mind.
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