Despite an abundance of corporate pledges on mental wellbeing, companies are failing to translate this into action. Given current economic conditions, asset manager CCLA argues this must change.
- CCLA published an analysis of the mental health practices of 100 of the world’s largest listed companies.
- Poor employee mental health presents a financial risk for companies due to low productivity, absence and high turnover.
- All companies are exposed to this risk and investment in wellbeing initiatives has been found to generate strong returns.
Values-based asset manager CCLA has launched what appears to be the world’s first Corporate Mental Health Benchmark Global 100. The benchmark provides insight into the commitments, leadership and disclosure of 100 global companies’ performance on mental health support. It is intended to highlight corporate action resulting in stronger support for employees, as well as guidance for management looking to improve operations and investors pursuing sustainability standards.
Poor employee mental health is a concern for businesses
A survey published by Deloitte in April 2022 found that low wellbeing cost employers between £53 billion and £56 billion in the UK alone during the previous 12 months. It was a 25% increase since 2019, before the coronavirus pandemic hit, leaving long-lasting consequences on people’s psyches.
Poor mental health in the workplace can translate to increased absences, high labour turnover and presenteeism – which is attending work when ill, usually affecting productivity.
Deloitte found that investing in workers’ mental health generates positive returns for a company, at around £5.30 for every £1 invested.
Management can support employees by screening, training, promoting awareness and targeted interventions, such as personal therapy.
Mental health is still “a relatively immature business issue”
CCLA said that 90% of the companies which were assessed had recognised employee mental health as an important business concern, but only half have established a formal policy or strategy.
Only 15% of them had set targets and objectives, which are necessary to measure the effectiveness of a policy or intervention.
Despite growing recognition of the importance of mental health, only a fifth of company chief executives have publicly endorsed their commitment to action, which suggests it is not yet a priority.
David Atkin, chief executive of Principles for Responsible Investment, said: “Companies have made positive steps forward when it comes to protecting their workers, but this benchmark shows that mental health is still a relatively immature business issue.
“As such, investors should call on companies to signal their board and senior management commitments to promoting mental health at work and to recognise the link between mental health and the principles of ‘good work’, which include issues such as diversity, flexible working and financial well-being.”
HSBC (LON:HSBA) scored the highest according to CCLA’s benchmark, while companies such as Apple (NASDAQ:AAPL), McDonald’s (NYSE:MCD) and Tesla (NASDAQ:TSLA) were just “at the start of the journey” in adopting a formal approach to mental health.
All companies are at risk from low mental wellbeing amid the economic crisis
Over a tenth of the working population are experiencing a [diagnosed] mental disorder at any given time, according to 2019 estimates by the Global Health Data Exchange, meaning that all companies are exposed to this risk.
The number of staff suffering mental health challenges is bound to rise due to the pandemic’s long-lasting effects and the increasing pressure of the current economic crisis.
Companies are recognising the link between good mental health and financial wellbeing. However, only a third of those analysed by CCLA have established a formal process to connect the two.
Mental health must be addressed as a “moral and an economic imperative”, said Amy Browne, stewardship lead at CCLA and co-author of the report.
Businesses with a mental health strategy need to ensure this is implemented correctly and leads to measurable results. This requires processes such as senior management oversight, the setting of objectives and monitoring of performance.
Companies will benefit from increased productivity and employee retention, as well as attracting interest from sustainability-oriented stakeholders.
There is the issue of reputation: many companies with a poor mental wellbeing track record have also been called out for damaging workplace practices. These include things such as systemic sexual harassment, racial discrimination, homophobia and more.
