As investors, we want the companies in which we invest to be successful. A universal problem for companies is how to support and nurture a workforce to protect its mental health.
According to the Global Health Data Exchange, approximately 15% of the world’s working population experience a mental disorder at any given time. We believe that the stark human and economic costs associated with poor mental health represent a substantial obstacle to companies’ success. Put simply, employers are losing billions of pounds because employees are less productive, off sick or leaving work all together.
The social and economic challenges faced in the aftermath of the Covid-19 pandemic and during the cost-of-living crisis are having wide-ranging implications for the population’s mental and physical health, lending a greater level of urgency to the campaign.
With the support of Chronos Sustainability, and an Expert Advisory Panel including Paul Farmer (former CEO of the charity Mind), Lord Dennis Stevenson, the Principles for Responsible Investment and others, CCLA has spent the past two years building and refining a set of assessment criteria. In Q1 2022, we used these criteria to evaluate and score the 100 largest UK-listed companies with more than 10,000 employees on their public disclosures. On 26 May 2022, the CCLA Corporate Mental Health Benchmark UK 100 was launched. We didn’t stop there, on 10 October 2022, we launched the CCLA Corporate Mental Health Benchmark Global 100 and in June 2023 we launched the second iteration of the UK benchmark. Following this, the second iteration of the global benchmark was launched in October 2023.
Our award winning corporate mental health benchmarks are the culmination of sustained collaboration with workplace mental health experts, data providers, charities and UK-listed and global companies. As responsible investors, we want our companies to be successful and to make a positive difference in their sphere of influence. Successful companies safeguard staff mental health because in doing so they also safeguard their economic success.
The benchmark is now starting to serve as an important engagement tool and accountability mechanism for a growing global coalition of investors and asset owners. As of September 2023, we have a coalition of investors representing $8.7 trillion of assets. On behalf of our founding signatories, we wrote to all company CEOs in both the UK and global benchmarks to ensure that they optimise their organisation’s performance by eliminating avoidable costs associated with mental ill-health and taking concerted efforts to create the working conditions under which every individual can thrive.
See our previous work
Why is mental health an investor concern?
Few would disagree that companies have a moral duty to provide their workers with a psychologically safe place of work. Watch Elizabeth Sheldon, COO, and Amy Browne, Stewardship Lead, explain why investors should be concerned about mental health.
Why should employers address mental health in the workplace?
Despite increasingly frequent discussion in everyday life, one of the biggest obstacles to good workforce mental health is a reluctance to talk about it. Stigma around mental ill-health is real, and it persists.
The Marmot Review and The Stevenson / Farmer review highlight how ‘Good work’ – including autonomy, equality, fair pay, work–life balance, professional progression and the absence of bullying and harassment – can promote and enhance mental and physical health. It can optimise workforce productivity, help to maintain high morale and minimise absenteeism and tension between colleagues. It can also provide economic security, social connection, opportunity and a sense of purpose.
On the other hand, discrimination and poor working conditions can result in stress and limits the ability of individuals to get on and thrive in work (ISO).
In the UK, private sector employers lose £43–46 billion each year to poor workplace mental health, from a combination of sickness absence, presenteeism, and costs associated with workforce turnover. Mental ill health is unquestionably a business risk and should be managed as such.
‘Good health and wellbeing: ensure healthy lives and promote wellbeing for all at all ages’; this is the United Nation’s third Sustainable Development Goal (SDG). Although the emphasis is on physical health, the third progress assessment relates to, ‘non-communicable diseases, mental health and environmental risks.’
The SDGs were adopted by all UN member states in 2015 as a universal call to action to end poverty and ensure a better planet for future generations. Importantly, it is recognised that action in each of these areas is interlinked. The mission cannot and will not be realised unless we take mental health – as part of the 17-piece SDG jigsaw – seriously. Achieving the SDGs requires a cohesive effort by governments, the private sector, civil society and citizens alike. Employers must do their bit.
What have we found?
Business concern around workplace mental health is growing, thanks not only to a growing body of evidence on the financial costs associated with poor health, but also greater awareness by the public and investors. The CCLA Corporate Mental Health Benchmarks provide a window into how more than 200 of the world's largest listed companies approach and manage workplace mental health, based on their published information.
Fully integrating mental health into business strategies and reporting cycles takes time and each company is at a different stage in its own journey. Where disclosure on workplace mental health is absent, investors are unable to assess the effectiveness of a company’s management controls or its performance relative to peers. The results of the 2023 CCLA Corporate Mental Health Benchmarks show that while encouraging progress is being made, there is much work still to be done.
Key findings from the 2023 Global 100+ report
Nineteen companies, with a combined workforce of 6 million people, have improved their performance tier, with three companies moving up two tiers.
Mental health is now almost universally recognised as an important business concern.
95% recognise the importance of mental health (90% in 2022).
Formal initiatives aimed at raising awareness of mental health are now commonplace.
84% of companies have programmes to raise awareness (72% in 2022).
The provision of internal or external mental health services and support is on the rise.
78% of companies provide multiple support services (72% in 2022).
Companies are increasingly monitoring the uptake of support services and initiatives.
43% of companies measure uptake of services and initiatives (26% in 2022).
And what's next?
In order to realise the change that is necessary, we recommend a set of actions for companies and call on investors to encourage companies to take the following steps:
- Acknowledge workplace mental health as an important consideration for the business and for its employees.
- Signal board and senior management commitment to promoting mental health in the workplace, recognise the link between mental health and ‘good work’ principles, and encourage a culture of openness on mental health.
- Publish a commitment to workplace mental health in a policy statement (or equivalent) together with a description of the scope of this commitment and of the governance and management processes in place to ensure the policy is effectively implemented and monitored.
- Set objectives and targets to improve workplace mental health.
- Report annually on progress against the company’s mental health policy and objectives.
We hope that the findings and recommendations in our 2023 benchmarks will act as a guiding framework for companies; to help strengthen their management approaches and sustain a structural focus on workplace mental health.
As well as being a moral imperative, we believe that workplace mental health is potentially material to long-term value creation. As such, we will continue to support companies to promote mental health in the workplace and to provide transparent reporting on the steps the companies take to manage effectively the business risks and opportunities presented by workplace mental health.
The CCLA Corporate Mental Health Benchmarks are an essential step towards better understanding the performance of companies on workplace mental health. They offer a clear framework for companies to structure their management and disclosures on mental health and provide investors with a tool to consider workplace mental health when forming investment views on companies and sectors across global capital markets.
We are committed to the following.
1. Repeat the UK 100 and Global 100+ corporate mental health benchmarks in 2024
We will conduct the third iteration of the UK 100 and Global 100+ benchmarks in 2024. We expect to cover a similar scope of companies and broadly the same methodology as used in 2023 to allow for year-on-year comparison. There will be some enhancements to the 2024 benchmark criteria to further align it to the ‘WHO Guidelines on mental health at work’.
We will write to all companies in early 2024 to confirm their inclusion in the 2024 benchmark cycle, and will share with them the new benchmark criteria, as well as the timeline for company assessments and publication of the benchmark results.
2. Continue to build investor support for the Global Investor Statement on Workplace Mental Health
In June 2022, we started to build support for a global investor statement on workplace mental health. The aim was to mobilise the investment industry into action on this important topic. The statement was launched in July 2022, with 29 founding signatories representing $7 (£5.6) trillion in assets under management. As of September 2023, it is made up of 48 investor signatories, with a combined $8.7 (£7.2) trillion in assets under management. We will continue to build this coalition.
The statement outlines the expectations by investors of companies to ensure that business performance is optimised, through both a healthy and productive workforce and the elimination of unnecessary costs associated with poor mental health. It calls on investors to encourage companies to develop and implement effective management systems and processes on workplace mental health, and to report annually on their workplace mental health strategies and performance.