CCLA Investment Management has launched the first-ever benchmark on the management and disclosure of corporate mental health, covering 100 of the UK’s largest companies.
The CCLA Corporate Mental Health Benchmark – UK 100 assesses and ranks these employers, all listed on the London Stock Exchange, on how they are approaching and managing workplace mental health.
Designed to act as a catalyst for change by incentivising employers to create conditions under which workers can thrive, the benchmark also gives institutional investors a new tool for appraising and engaging with companies.
“Until now, it has been very difficult for investors to evaluate and compare company performance on mental health,” said Amy Browne, stewardship lead at CCLA. “Being able to understand the relative strengths and weaknesses of corporate practice on mental health will inform and accelerate progress.”
She continued: “Consistent with their fiduciary duty to beneficiaries, institutional investors should feel they can use the findings in this benchmark to push for positive change at the companies in which they invest.”
But there are also financial benefits for investors in using the benchmark, said Browne.
“Unlike many topics in the sustainability or ESG space, there is hard statistical evidence to show that companies stand to gain financially from investing in workplace mental health,” she said.
In its 2022 report Mental health and employers: The case for investment – pandemic and beyond, Deloitte found there was an average return of £5.30 for every £1 invested by UK employers in staff wellbeing.
The CCLA benchmark assesses the largest UK-listed companies by market capitalisation with over 10,000 employees.
Companies’ public disclosures on workplace mental health were evaluated using 27 distinct assessment criteria which are aligned with international standards and frameworks on psychological safety at work.
Based on their scoring against these criteria, the benchmark ranks companies across five tiers according to the maturity of their approach to managing and reporting on workplace mental health. Most companies fall into tiers three, four and five.
“We want to encourage companies to improve over time and celebrate good practice, not stigmatise those who are just beginning”
Amy Browne, stewardship lead at CCLA
Each company received an individual assessment report for internal use, with a numerical score against each of the 27 criteria, with suggestions for improvement.
The three companies assessed as leading the way on workplace mental health management and disclosure were Centrica, Lloyds Banking Group and Serco Group.
Chronos Sustainability, a specialist sustainability advisory firm with expertise in targeted benchmark initiatives, advised CCLA on the benchmark’s design and development.
CCLA was also supported by a panel of independent workplace mental health experts and specialist practitioners, including representatives from Unpri and mental health charity Mind.
Overall, the benchmark revealed that while most companies now publicly acknowledge mental health as an important business concern, many have a considerable way to go in formalising their management and reporting on workplace mental health.
Three-quarters (76%) of companies have developed multiple workplace initiatives aimed at raising awareness of mental health in the workplace, and 91% provide employees with access to mental health services. Much of this has been in response to heightened need and psychological distress during the pandemic.
However, while 93% of the companies acknowledge workplace mental health as an important business issue, only 34% publish formal objectives and targets, highlighting that many have not yet translated their policy commitments into action. Just 11% disclose any related key performance indicators.
The report also found that while 44% of companies have a clear position on promoting a culture of openness on mental health, public advocacy by chief executive officers is broadly lacking. Only 35% of benchmark company CEOs have publicly signalled a leadership commitment to promoting mental health in the workplace, making it difficult for investors to gauge the extent to which company leaders are championing mental health.
“Fully integrating mental health into business strategies and reporting cycles takes time, and each company is at a different stage in its own journey,” said Browne.
“We want to encourage companies to improve over time and celebrate good practice, not stigmatise those who are just beginning. We hope that the findings will strengthen the hand of those within organisations who are trying to make headway.”
An investment manager exclusively for charities, religious organisations and the public sector, CCLA began engaging with companies on mental health in early 2019. Through the benchmarking process, it has engaged with around 20 companies, the vast majority of whom have welcomed the initiative wholeheartedly, said Browne.
CCLA expects to launch the sister benchmark to the UK 100, the Global 100, in October 2022.
The report can be accessed here.