Low rates of CEO advocacy, target-setting and disclosure have resulted in underwhelming overall performance against benchmark.
Companies globally are getting to grips with creating a positive environment for mental health in the workplace, but progress remains slow.
CCLA Investment Management’s second annual CCLA Corporate Mental Health Benchmark Global 100+ has assessed 110 of the world’s largest listed companies on their approaches to and management of workplace mental health-based policies, commitments and reporting.
“We are facing a crisis of mental ill health globally, which has significant knock-on effects for employers and businesses,” Amy Browne, CCLA’s Stewardship Lead, told ESG Investor.
“One of the main takeaways of this benchmark has been that positive peer pressure is incredibly powerful; comparing companies against one another publicly has been key to driving progress right across the board,” she said.
“By launching a public benchmark, we’ve injected an element of competition into an area that has frankly been hidden behind closed doors and been hugely stigmatised for too long.”
Ninety-five percent of all assessed companies now recognise mental health as an important business concern, up from 90% in 2022, with 84% companies noting they have installed programmes to raise awareness, compared to 72% in 2022.
Companies are also increasingly monitoring employee uptake of mental health support services and initiatives, increasing from 26% in 2022 to 23% in 2023.
“This really shows how the provision of mental health initiatives and services is increasingly seen as a component of business strategy which requires investment and resource,” said Browne.
Further, 19 of the 110 companies improved their mental health performance tier, of which there are five in total. These 19 companies have a combined workforce of six million people.
The benchmark nonetheless noted a low rate of CEO advocacy, with just 17% of companies publishing evidence of a CEO statement promoting workplace mental health. The average benchmark score for companies with a CEO statement is 75% higher than those without one, the report said, noting that, while this finding does not prove a causal effect, it does suggest a correlation between CEO leadership and overall good corporate management on the issue.
There is room for improvement, with 22% of companies disclosing that mental health training is provided to company managers, and just 19% setting mental health-related objectives and targets in line with their policy commitments.
The benchmark also noted that the overall average company score has improved to 28%, from 25% the previous year.
“The overall average score remains pretty dire, I do think it’s only a matter of time until progress ramps up,” Browne said.
“Companies are increasingly seeking advice and guidance on how they can improve their benchmark score in the coming years.”
The estimated total annual costs of employee absenteeism, presenteeism and labour turnover at UK-based companies increased by 25% since 2019 to an estimated annual total of £53-£56 billion (US$69-US$73 billion) in 2021, according to a 2022 report by Deloitte, with poor mental health found to be a key contributor to this escalation.
Further, the Big Four accountancy firm calculated that employers see an average return of £5.30 for every £1 invested in staff mental health.
Triggering a conversation
The benchmark has ultimately been designed to be a tool for investors as well as companies, according to Browne.
“Any asset owner or manager with exposure to one of the assessed companies will be able to clearly see how they measure up on this issue compared to its peers, and that can prompt a productive conversation.”
The global benchmark is supported by 48 investor signatories (representing US$8.7 trillion in assets) to the Global Investor Statement on Workplace Mental Health.
“Any asset owners who want to be more heavily involved are very welcome,” Browne added.
“The more that investors approach companies as a cohesive voice, the more likely companies are to respond.”
Browne said the structure of the benchmark aims to consider not only the policies in place around mental health, but also how they are implemented on the ground and whether there is evidence to indicate strategies are working.
“If we just focused on the policies, then there would be a danger of mental health becoming a tick box exercise,” she said.
The CCLA’s global benchmark is the sister benchmark to the UK 100 Benchmark, which was updated in June.
Both benchmarks are independently conducted by sustainability advisory firm Chronos Sustainability, which is a technical sustainability partner to CCLA.
In July, a separate group of institutional investors managing over US$2 trillion in assets announced a collaborative engagement initiative targeting the tech sector on mental health. The group will be approaching companies like Netflix and Meta on their consideration of mental-health related risk within their business models.
UK pension fund Railpen, the Pensions and Lifetime Savings Association and the Chartered Institute of Personnel and Development, an association for HR professionals, previously analysed the quality of workplace disclosures in the 2021 annual reports of FTSE 100 companies around social themes.
They found that only 13% of these reports discussed mental wellbeing, highlighting that it is not prioritised to the same degree as physical health, despite its links to absenteeism and productivity.