Mental health in the workplace matters – a vision for company and investor action

5 June 2023

Protecting and promoting good workplace mental health is a business imperative, relevant not only to a company’s duty of care to its employers but also to its bottom line. It is potentially material to long-term value creation and a relevant consideration for investors when forming views on companies and sectors across global capital markets.

According to Mind, the mental health charity, ‘smart employers know that organisations are only as strong as their people – they depend on having a healthy and productive workforce.’¹

CCLA believes that investors have a key role to play in supporting and encouraging companies to strengthen their approach to workplace mental health. In May 2022, CCLA launched the Corporate Mental Health Benchmark UK 100 with two explicit aims. First, to strengthen the hand of those within organisations that are trying to make headway on mental health; second, to mobilise the investment community into action on this important topic. Following the successful launch of the inaugural UK 100 benchmark in May 2022, we published a global 100 version in October. Between them, the companies assessed in the two benchmarks employ more than 24 million people.²

The benchmark recognises that every company is at a different stage in the journey towards integrating mental health into business strategies and reporting. However, there are some common headlines which suggest that until now, the importance of mental health has been lost on the wider investment community.

• Nine in ten companies recognise workplace mental health as an important business concern, yet less than half have formalised their commitments to mental health in a policy statement.
• Almost one in three global companies has committed to removing the stigma associated with mental health, but few global leaders are championing the issue.
• Global companies are investing in mental health programmes and initiatives, yet reporting on the uptake of these is rare.
• Global companies lack effective governance and management processes to sustain action on workplace mental health.²

There may be no shortage of mental health initiatives in the international workplace, but when it comes to integrating mental health into formal management systems and processes, most global companies have much further to go. Appropriate action by employers not only improves the quality of people’s working lives, it also brings financial benefits at a corporate level, which means that investors stand to gain too.

There is clear evidence to show that improving the mental health of an organisation saves money and that the financial ramifications of failing to improve corporate mental health are profound. According to a study by Deloitte, mental ill health in the workplace costs employers annually an average of £1,652 per private sector employee.³

Perhaps more importantly, creating a positive environment for mental health costs a lot less than failing to do so. In the UK, Deloitte finds an average return of £5.30 for every £1 invested in mental health interventions in 2020-21.⁴ Globally, the World Health Organization (WHO) tells us that for every US$1 put into scaled-up treatment for common mental disorders, there is a return of US$4 in improved health and productivity.⁵

It is now twelve months since CCLA launched the UK 100 mental health benchmark, which aims to evaluate the extent to which employers provide the working conditions under which individuals can thrive, based on a company’s public disclosures. A lack of reporting renders it difficult for investors and other stakeholders to assess the quality of management controls or relative performance of companies on mental health. In benchmarking companies annually, CCLA hopes to drive greater disclosure on workplace mental health and to enhance an understanding of the risks and opportunities presented by mental health among some of the world’s largest private sector employers.

To truly affect change in the real world, we know we need to collaborate and work together with other investors. CCLA has built a global coalition of institutional investors to support the project. It currently has 44 members with $8.5 trillion in assets under management. With the appropriate measure of respect and encouragement, a combination of annual benchmarking and ongoing engagement could bring about real progress.

Momentum in the industry is growing. Given the cost-of-living crisis has arrived hot on the heels of the Covid pandemic, there is real urgency for action. This is our message to employers: promoting and investing in the mental health of your workers is both a moral and an economic imperative. By directing resources thoughtfully, not only will we improve the quality of people’s lives, but we will also build a workforce that is more productive, more resilient and more profitable.

We have just launched the CCLA 2023 Corporate Mental Health Benchmark UK 100. To read the findings from the report click here.