Gym : Sustainability Report 2022

The Gym Group plc

Sustainability Report 2022

Extracted from Annual Report and Accounts 2022

The Gym Group plc|  Annual Report and Accounts 2022

The Gym Group plc  |  Annual Report and Accounts 2022

Strategic report

Sustainability Report

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report	Governance
statements	Financial

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	At The Gym Group, we remain committed
	to breaking down barriers to fitness,
	enabling everyone to live healthier
	and more rewarding lives, within the
	natural balance of the planet. The cost-
	of- living crisis, driven by high inflation
	and compounded by the soaring cost
	of energy, has presented a range of
	challenges for UK society, including
	The Gym Group and our members.
	Our low cost and accessible gym model,
	which is delivered in a resilient and
	sustainable way, is therefore more
	compelling than ever.
	Our sustainability strategy was created to help deliver
	our purpose and consists of five key pillars, as defined by
	our 'sustainability wheel'. Our 2022 report highlights our
	performance and activities during the year, in line with
	our strategy.
	We continue to report with reference to Global Reporting
	Initiative 2021 Universal Standards and against
	Sustainability Accounting Standards Board Leisure
	Facilities Standards. Full reporting can be found on our
	website along with our sustainability strategy, materiality
	matrix, and sustainability governance structures.
	We were the first carbon neutral gym chain in the UK and
	have again offset our remaining carbon emissions for 2022
	through investment in carefully chosen and Gold Standard
38 |	certified carbon offset projects in support of our journey
to net zero.

Social impact

Research into the benefits of exercise clearly shows that when our members visit our gyms at least four times

a month, improvements in their physical health, mental wellbeing and social development (social value) are achieved. We therefore introduced a new performance metric in 2022, to help us track our positive social impact. In 2022, the Covid-19 pandemic continued to impact our ability to deliver this societal benefit, with further disruption from the pandemic in January and February. This report sets out how we have achieved our target and delivered an increase of 8% in social value compared to 2019 by enabling over 53 million gym visits.

The environment

The UK saw a record temperature of 40.3°C in July 2022, 1.6 °C higher than the previous record. Across the globe, 2022 has been a year of extreme climate events claiming hundreds of thousands of lives and displacing millions of people. We are in a period of 'climate changed' as well as climate change, and we are evaluating both risks and opportunities to ensure our business is resilient to this change.

We have expanded our assessment of climate-related impacts within our Task Force on Climate-Related

Financial Disclosures ('TCFD') reporting and explored further water management measures.

At COP27, UN Secretary General António Guterres made some of his strongest comments yet on global warming, saying, "our planet is fast approaching tipping points that will make climate chaos irreversible". The UN's environment agency ('UNEP') reported that there is "no credible pathway to 1.5°C in place", and the only way to limit the worst impacts of the climate change crisis is a "rapid transformation of societies". The report highlights that, if current pledges of action were delivered in full by 2030, then we would experience a rise in global temperature of about 2.5°C, with catastrophic effects.

Our commitment to net zero has taken a significant step forward this year, with a full submission to the Science Based Targets initiative ('SBTi'); this includes the recalculation of our 2019 carbon footprint - our baseline year.

Our Green House Gas ('GHG') emissions are therefore restated in this report and we have removed data for 2020 and 2021; this is due to the lack of comparability owing to the significant impact of Covid-19 on our operations. Our 2022 emissions are stated in line with this revised calculation for direct comparison.

Diversity and equal opportunity

The Gym Group is a place where we want everyone to feel included and accepted, with equal opportunities to succeed, and we continue to make progress towards our goals. We were also delighted to be recognised by Reward Gateway in their Engagement Excellence Awards.

Good jobs and quality education

This year was our first time assessment for the We Invest In Wellbeing accreditation where we achieved silver. We also received the Best Places To Work award by Glassdoor and maintained our Investors In People Gold accreditation.

Human rights, anti-bribery and anti-corruption

We conduct our business honestly and ethically wherever we operate. Our Human Rights Policy Statement and Anti-Bribery and Corruption Policy Statement can be found on our website. We also have a detailed Anti- Bribery and Corruption policy, which is available to all employees via our intranet along with training.

David Melhuish

Chief Development and

Sustainability Officer

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The Gym Group plc|  Annual Report and Accounts 2022

The Gym Group plc  |  Annual Report and Accounts 2022

Strategic report

Sustainability Report continued

Good jobs and quality education

We also introduced new apprenticeship development opportunities across our Gym Support function, which enables existing employees to undertake a professional qualification relevant to their role, such as accountancy, marketing and leadership. In 2023, we will expand apprenticeship opportunities to support our Gym Operations teams.

13

employees enrolled on apprenticeships

42%

Fitness Trainee Kickstart programme

66%

of participants converted to a Fitness Trainer role at The Gym Group

Kickstart Business Support programme

Miranda Jeffery, General Manager at our Northampton gym, shares her career and development adventure at The Gym Group.

Strategic report
report	Governance
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Engagement survey

83%

Participation rate

(decrease of 2 percentage points from 2021)

Overall engagement score

67%

(increase of 6 percentage points from 2021)

40 |

Our people first culture is vital to our success and remains a business focus at The Gym Group. Through our 'people promise' we are committed to supporting our employees in their career adventures, providing new opportunities and

a culture where people can achieve their goals.

The impact of the increase in the cost- of-living brought us new challenges in 2022 and looking after our people's wellbeing and talent development has remained a business priority. To deliver this, we have implemented development programmes across

a variety of roles and continued to provide wellbeing support through the delivery of our LeadWell programme in partnership with Outliers Wellbeing, covering topics such as psychological safety and tackling burnout.

Employee engagement

We have continued to utilise our annual engagement surveys to listen to our teams' experiences, and we have used the findings to shape our people strategy. Feedback from

our 2021 engagement survey results indicated that our people were looking for additional opportunities to learn and develop. In response to initiatives launched in 2022, we have seen key drivers of employee engagement, such as job satisfaction and opportunities to learn and develop, increase by 8 and 10 percentage points respectively.

Employee learning and development

We relaunched our 'Emerging Talent' management development programme in May 2022, providing high potential Assistant General Managers with development pathways into General Manager roles. This achieved huge success, with a 95% retention rate and 42% promotion rate in this first cohort. In June we expanded the 'Emerging Talent' framework by launching a bespoke Fitness Trainer programme, which serves to provide the skills required to progress. This resulted in an 83% retention rate, with 65% of participants securing promotions to Assistant General Manager positions. By providing opportunities to develop into management roles, we hope to grow and retain our internal talent pipelines and will continue to deliver our Emerging Talent programmes

in 2023.

promotion rate - Emerging Talent management development programme

65%

promotion rate - Fitness Trainer Emerging Talent programme

As we move into 2023, we will remain focused on delivering internal development programmes and aim to introduce targets to measure the effectiveness of these programmes. Development in 2023 will be focusing on female leadership, conscious leadership and building a future leader's pipeline for gym operations.

In our communities

The UK Government's Kickstart Scheme - designed to provide job placement opportunities for young adults at risk of long term unemployment - concluded this year. Since joining the scheme in December 2020, we have given

234 young people the opportunity to gain work experience and a qualification in fitness.

38%

of participants converted to permanent roles within our Gym Support function

Due to the success of the Kickstart programme, we have decided to create a Grow Your Own talent development scheme in 2023. Within this scheme we will launch The Gym Group Academy to provide a framework for multiple pathways into a career in fitness. The scheme will deliver further education, experience and the personal training certifications required to become a Fitness Trainer. The Gym Group Academy will focus on those currently on universal credit, hard to reach demographics and women. Programmes will run throughout the year and range from five day work experience placements to 16 week Grow Your Own Fitness Trainer programmes.

Whilst our partnership with the Rio Ferdinand Foundation pilot 'Find Your Future' programme did not generate the participant engagement anticipated, we were active in delivering engagement visits to supported community projects.

I joined The Gym Group in 2019 as a Fitness Instructor but was always really interested in the operational side of the business. With the ongoing support and encouragement of my manager, I applied for the Assistant General Manager role and in 2021, achieved my first step into management. I instantly knew this was the right path for me and loved leading, educating and motivating my own team of Fitness Trainers, as part of my new role.

In 2022, I was selected to take part in the Emerging Talent leadership development programme. This programme was a huge support in fast tracking my career at The Gym Group, and I was soon promoted to General Manager. The modules within the programme helped build my understanding of the role and the skills and knowledge required to deliver in this position.

"Completing the Emerging Talent programme has not only fuelled my knowledge but also my passion for working at The Gym Group."

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The Gym Group plc|  Annual Report and Accounts 2022

The Gym Group plc  |  Annual Report and Accounts 2022

Strategic report

Sustainability Report continued

Good health and wellbeing

This incredible result was not only driven by higher membership numbers (up 14.3% on 2021) but was also the result of our focus on motivating

our members to exercise in our gyms regularly.

As a business dedicated to generating social value, we created a new KPI for the Executive Committee to drive social value. Performance is measured on the percentage of members who visit our gyms at least four times a month. Our target for 2022 was to return to 2019 levels; we exceeded this target and achieved a 7.1% increase on 2019 to 47.2% by launching a range of initiatives including celebrating member visits, creating member challenges and welcome videos

for new members to increase the accessibility of our gyms.

Safety at our gyms

The safety and security of our people remains a priority focus, and we have improved processes for both our members and employees. This is supported by a more sophisticated approach to reviewing risk, as well as robust strategic crisis management plans and emergency action plans.

Our main focus throughout 2022 was to conform our health and safety management system to ISO 45001:2018. We are now working on certification to the ISO standard in 2023.

Our Primary Authority partner, Wakefield Council, provides valuable insight from a regulatory perspective into our management system

and processes and supports us in responding to regulatory queries

Positive impact of exercise on mental wellbeing

Interview with Fraser, member at The Gym Group Greenwich

Why did you join The Gym Group Greenwich?

I joined The Gym Group because I felt that I needed to do a bit more

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statements	Financial

Social value generated in 2022

£756m

(vs £700m in 2019)

70%

Of social value comes from direct NHS cost

The World Health Organisation ('WHO') has long recognised that regular physical activity is proven to help prevent and manage diseases, such as heart disease, stroke, diabetes and several cancers. Exercise can also improve mental health, quality of life and wellbeing.

2022 saw a dramatic increase in the cost-of-living, with the crisis disproportionately impacting lower income demographics. Offering affordable facilities to exercise is therefore increasingly important.

Our network of 229 gyms affords access to

52.5%

of the UK population

The social impact of

The Gym Group

Growing the positive impact our business has on our members and the communities we serve is central to our purpose. We are proud to have increased the social value generated in 2022, beyond our target by 8% to £756 million.

Information on how the social value is calculated and the Social Value Model can be found on our website.

• of members visiting at least
  4x per month1

	44.0%			47.2%
41.7%
			32.6%
		23.9%
2018	2019	2020	2021	2022

1 Calculated as a rolling 12-month average.

from other Local Authorities. We have begun seeking a secondary partnership with a Fire Authority.

2022 was the first year of delivering an unannounced health and safety audit schedule across the business; as a result, we observed a marginal reduction in our Group audit results, in which we obtained an audit score of 96%.

Our overall headline accident rate hasn't seen a material change. We have developed additional rates for more serious accident types which demonstrate whilst our overall rate remains static, we have seen positive reductions in our more serious accident and incident types.

for my fitness and find an outlet from university stress.

What do you like about The Gym Group?

The community that is led by Jason at The Gym Group Greenwich is incredible. When I go to the gym,

I know I am seeing people that genuinely care about me. The staff and members are incredibly friendly. Importantly, I don't feel judged - it is a social space as well as a place to exercise, and whilst I go to the gym mostly on my own, there are always people around for me to talk to and workout with.

What role does The Gym Group play in your general wellbeing?

savings and mental wellbeing benefits to our members

42 |

With 28 new gym openings in 2022, we continue to locate 32% of our growing estate in the 20% most deprived areas of the UK, reinforcing our commitment to tackling inactivity in disadvantaged communities.

At The Gym Group, we have made it our purpose to break down barriers to fitness, and not only provide access to low cost, safe and high quality fitness facilities to our members, but also

to motivate our members to use our gyms regularly.

Social value generated

+8%

vs target

				756
	700	2022 target
540			485
		370
2018	2019	2020	2021	2022

Average Audit Score

96%

(2021: 97%)

I was diagnosed with depression and anxiety and was prescribed anti-depressants to cope with day-to-day living. I also had some therapy sessions with the NHS and my university. However, it felt like I had to find my own path to improve my mental wellbeing. When gyms opened again post pandemic,

I went regularly. I always look forward to going to the gym and feel so much better afterwards. That positive feeling doesn't leave me, it stays with me for the rest of the day.

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The Gym Group plc|  Annual Report and Accounts 2022

The Gym Group plc  |  Annual Report and Accounts 2022

Strategic report

Sustainability Report continued

Diversity and equal opportunity

In May 2022, we relaunched our wellbeing strategy to the business. In response to the cost-of-living crisis, we focused on providing financial and emotional wellbeing support, highlighting available resources and bringing forward pay reviews. We launched the first cohort of our new Mental Health Ambassadors programme in October, a six-month programme providing refresher training and upskilling to 24 (existing and new) mental health champions to further support our colleagues.

To improve the retention of female talent, we investigated the key factors impacting our female employees' experiences and drivers to leave the business. In 2023, we will use these insights to inform our EDI strategy and support our gender pledges.

This year, we also joined ukactive's Everyone Can disability taskforce, contributing to thought leadership and influencing change within

our sector.

The Gym Group gender balance

Male Female

27.4% 30.7% 29.2% 30.7%

72.6% 69.3% 70.8% 69.3%

2019 2020 2021 2022

Senior leaders gender balance

Male Female

23.8%	24.5%	28.8%	35.1%
76.2%	75.5%	71.2%
		64.9%
2019	2020	2021	2022

Ethnicity

We continued to collect and monitor our employee ethnicity data in 2022.

Gender pay gap

In January 2022, we introduced a new director level to the business. This resulted in an initial increase in males at a senior level, creating a rise in our mean gender pay gap to 3.3% (versus 1.6% in 2021). Our median pay gap remained consistent with 2021 reporting as most of our employees undertake the same role and are therefore on the same pay rate, regardless of whether they are male or female.

Ethnicity pay gap

We collected ethnicity data from 98% of our employees enabling greater accuracy in our pay gap reporting in 2022. We are pleased to report our mean ethnicity pay gap as of April 2022 has improved, falling to 14.8% (versus 16% in 2021). Our median ethnicity pay gap remains at 0% as most employees did not change roles or pay during the year. We recognise that more work is required to reduce our mean ethnicity pay gap.

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Target

2022 result

40% 35.1%

female senior leaders1 by 2025

Target

2022 result

50/50 30.7%

Breaking down barriers to fitness and ensuring The Gym Group is a place where everyone feels included and accepted, with equal opportunities to succeed, remained a core focus in 2022.

Last year, with the impact of the cost-of-living crisis, we prioritised reviewing our diverse and inclusive recruitment practices and representation. To support our Equality, Diversity and Inclusion ('EDI') pledges launched in March 2022, we developed recruitment and retention

interviews for all operational positions. We also revised job adverts to reflect gender neutral language and tone, and provided alternative application routes for those who require adjustments. Additionally, we promote flexible working practices within our recruitment adverts. To further attract diverse talent, we released our series of inclusive brand videos to showcase the diversity of our people and their experiences working at The Gym Group.

We launched our Inclusive Traineeship in October 2022, the first of which was in partnership with the Down's Syndrome Association, and welcomed five amazing trainees. The

EDI pledges 2022-2030

Gender

Throughout the year, we have taken positive action to support movement towards our gender pledges.

In 2022, female representation among our senior leaders1 increased by

6.3 percentage points to 35.1% and across the business by 1.5 percentage points to 30.7%. Whilst some progress has been made, a focus on female retention and development will be key to achieving our targets.

1 Senior leaders includes senior managers, heads of department, directors and members of the Executive Committee.

Using ethnicity data collected from communities within a five-minute catchment area of our gyms, we established how reflective our workforce is of the communities we serve. Within Gym Support, those identifying as Black, African and Caribbean increased by 2.3 percentage points compared with 2021. Across Gym Operations, whilst those identifying as ethnically white increased by 1.8% percentage points from 2021, overall ethnic diversity remains broadly above census data and in line with catchment data. However, we are aware that Asian employees are currently under represented; more work is required to understand reasons for this trend.

Our full ethnicity and gender pay gap reports, which provide further detail on our figures and the actions we are taking to address these gaps, will be available on our website by the end of March 2023.

gender balance by 2030

44 |

KPIs and targets and report progress quarterly to the Sustainability Committee. Our Chief Development and Sustainability Officer, David Melhuish, remains the sponsor of the EDI group, playing a crucial role in raising the agenda and positive action on diversity. Overall, we are pleased to have reported positive progress against our EDI targets, however, we recognise that more work is required.

Inclusion at The Gym Group Approach to recruitment

To reduce bias and ensure an inclusive hiring approach, we introduced standardised competency based

programme has delivered valuable work experience within our gyms, whilst supporting our trainees with their Active IQ Level 1 Award in Fitness and Physical Activity. The Traineeship has been a success and we intend to continue the programme under our Gym Academy framework, with further cohorts planned for 2023.

Employee inclusion and retention

We have continued to embed our employee led EDI working groups throughout 2022, which are focused on age, cultural diversity, disability, gender and LGBTQI+ to drive inclusion in the business.

Gym Support: Index vs communities we serve

200

Over

represented

Black, African,

160 Caribbean

Mixed

120

White

80

Asian

40

Under

represented

0	2021	2022

Gym Operations: Index vs communities we serve

200
			Over
	Black, African,		represented
160	Caribbean	Mixed
120
			White
80
40	Asian		Under
			represented
0	2021	2022	| 45