Fitness industry’s social impact: Gymtopia at 10 years

Cia Athletica gym members in Brazil donate their gym trainers to allow kids to take part in sport

The Environmental, Social, and Governance (ESG) agenda

Over the past decade, the corporate world has seen a significant shift in its focus from just maximizing shareholder returns to also making a positive impact on the environment and society. This shift is known as the Environmental, Social, and Governance (ESG) agenda. In this post, I want to explore the ESG agenda, corporate social responsibility, and the role that businesses, particularly in the global health and fitness industry, can play in driving social impact. We will also examine the United Nations Sustainable Development Goals (SDGs) and Gymtopia’s achievements over the past 10 years.

A Brief Gymtopia Recap

The idea for Gymtopia came to me when I was speaking with Richard Bilton, President of Companhia Athletica, a successful chain of clubs in Brazil. Richard was telling me about a shoe collection project their clubs had started. The simple idea was to ask members to bring in their old gym shoes when they were trading up to a new pair. The shoes are laundered, bagged and passed to Symap, a Brazilian charity that encourages poor children into sport. Seemingly little things like shoes matter, because without shoes kids cannot take part in sport. Companhia Athletica collected 700 pairs of shoes from members to kick-start the project and is now collecting just under 4,000 pairs each year.  I was fascinated by Richard’s project for several reasons:

• How big could this shoe project become if other clubs around the world were inspired to get involved? It does not take long for the idea to spread and create momentum.
• Why are these inspiring and socially worthwhile club projects not more ‘discoverable’ by others around the world? I was finding out about them by accident at a conference in Sao Paulo. Discovery matters because it inspires others to get involved.
• Clubs are themselves significant and influential communities that can be harnessed to create any type of social impact that they care passionately about. Some gym chains now operate thousands of clubs with millions of members making them larger than the population of a small country. If you ask millions of members to participate in a simple ‘act of giving’ the result can be extraordinary.

So, the idea I had that day was to ‘capture’ all these stories and put them in a single place on the web where they are discovered and widely shared. This is Gymtopia’s mission.

Environmental, Social, and Governance (ESG): A Brief Overview

The ESG agenda has gained significant momentum over the past decade. Today, investors and consumers are demanding that companies be transparent about their environmental, social, and governance practices. This shift has been driven by several factors including:

1. The growing awareness of climate change and other environmental issues on businesses, society, and the economy.
2. Employee and consumer activism — more people are demanding that companies take responsibility for their social and environmental impact.
3. Reputation and brand risk, as companies face increasing scrutiny from consumers, employees, and other stakeholders on their ESG practices.
4. Growing investor demand for ESG information and investment opportunities that align with their values and sustainability goals.
5. The emergence of sustainable business models and innovations, as companies see the business case for incorporating ESG considerations into their strategy and operations. Look at the impact that spiralling energy costs are having on the survival of health and fitness businesses, caused in part by Russia’s invasion of Ukraine.
6. The need for ethical and responsible corporate behaviour — everything from sustainable sourcing, employment practices to corporate philanthropy.

The ESG agenda is now recognized as a critical element of corporate strategy and a means for businesses to create long-term value for all their stakeholders.

The Role of Business in Solving social Issues and Inequalities

I’ve long believed that businesses can play a significant role in solving social issues and inequalities. They have the resources, expertise, and reach to address some of the world’s most pressing problems. Companies are increasingly using their platform to highlight and solve large social problems. In doing so, they have demonstrated the power of business to drive change and create positive social impact.

Peloton: This fitness equipment and digital platform company has implemented initiatives to promote mental health and partnering with mental health organizations to raise awareness and reduce stigma.

CrossFit: Their gyms partner with organisations to support social justice initiatives such as LGBTQ+ rights and racial equity.

Headspace: This meditation and mindfulness app has partnered with numerous organisations to make its services accessible to underserved communities.

GoodGym: This UK-based running community has developed a unique business model that combines exercise with social good. The company organises group runs that involve performing tasks such as cleaning up parks or delivering groceries to older and isolated adults.

TOMS: This shoe and apparel company has a unique business model where for every pair of shoes sold, they donate a pair to someone in need. They have also expanded their giving to include eyewear and clean water initiatives.

Patagonia: This outdoor clothing and gear company has been a leader in promoting sustainable business practices and environmental conservation. They have launched numerous initiatives to reduce their environmental impact and encourage consumers to do the same.

The United Nations Sustainable Development Goals and the Health and Fitness Industry

The United Nations Sustainable Development Goals (SDGs) provide a framework for businesses to contribute to global development. The SDGs consist of 17 goals that cover a range of social, economic, and environmental issues. The health and fitness industry can play a vital role in driving progress towards these goals. For example, in addition to promoting healthy lifestyles, the industry can also contribute to reducing poverty, improving education, and addressing climate change — all key sustainable development goals.

Embracing ESG: Balancing Positives and Limitations

These are challenging economic times so while embracing the ESG agenda has several benefits, there are also potential limitations that need to be considered. For example, there may be a trade-off between financial performance and ESG performance. Additionally, companies may face increased regulatory scrutiny and the need for additional resources to implement ESG practices. However, evidence suggests that companies that embrace ESG practices can generate long-term value, reduce risks, and enhance their reputation. Moreover, companies that fail to address ESG risks may face increased regulatory and legal challenges, reputational damage, and loss of investor and consumer trust.

Responding to ESG Sceptic’s

There may be sceptics who argue that companies should focus solely on their primary mission and maximise shareholder returns. However, evidence suggests that embracing ESG practices can be good for business. By addressing environmental, social, and governance risks, companies can reduce costs, enhance brand reputation, and create new business opportunities. Moreover, businesses have a broader responsibility to society, and addressing social and environmental problems is not only the right thing to do but can also create long-term value.

Empirical Evidence for the Business Case of ESG

There is increasing empirical evidence to support the business case for ESG. For example, a study by George Serafeim, a Professor of Business Administration at Harvard Business School found that companies that embraced ESG practices had higher financial performance, lower risk, and better overall governance. Similarly, a report by the Global Impact Investing Network (GIIN) found that companies that focused on ESG factors were more likely to attract investment and generate better financial returns. These studies and many others suggest that embracing ESG practices can lead to long-term financial and non-financial benefits for companies.

Gymtopia’s Achievements Over the Past 10 Years

Gymtopia has achieved significant success over the past 10 years. The platform has become a hub for health and fitness organisations to showcase their social impact projects. It has inspired other organisations to start their own social impact projects and has created a community of like-minded individuals committed to driving social change. Gymtopia has also demonstrated the power of the health and fitness industry to create a positive social impact, showing that even small initiatives can make a big difference but there is more to do.

Conclusion

The ESG agenda has become a critical element of corporate strategy, with companies increasingly recognizing their responsibility to create long-term value for both shareholders and society. The health and fitness industry can play a vital role in driving social impact, and initiatives such as Gymtopia demonstrate the power of the industry to effect positive change. While there may be potential limitations to embracing ESG practices, evidence suggests that companies that do so can generate long-term financial and non-financial benefits. As we move forward, businesses must continue to embrace the ESG agenda and recognize the broader role they can play in creating a more sustainable and equitable world.