UK fund manager CCLA is building a tool to help investors engage with large companies on how they are managing their employees’ mental health.
The CCLA Mental Health Benchmark, supported by sustainability advisory firm Chronos Sustainability, will launch in the first half of 2021. It seeks to enable investors to measure and compare how portfolio firms are performing when it comes to staff wellbeing, and provide guidance on how corporates can address and report on the topic.
The first iteration will focus on the top 20 FTSE 100 businesses by market capitalisation and progressively extend its reach. It will aim to define key expectations on mental health, looking at factors such as whether a company promotes mental health awareness among employees and contractors, whether it considers mental health safeguarding in job design and whether managers are trained to provide positive mental health support in the workplace. The initiative will be supported and advised by a panel, currently being recruited, of investors and experts on mental health and employee wellbeing.
Amy Browne, Stewardship Lead at CCLA, which manages investments for charities, religious organisations and the public sector, told RI that the aim is “to highlight the companies who should be recognised as leaders, and to encourage others to follow their example”.
“Getting the measure of employee mental health isn’t an easy task, but it’s essential, and our goal is to drive collective, systemic advances in the way companies approach the wellbeing of their most precious assets: their people.”
There is already a wealth of data to demonstrate that poor mental health impacts company revenue as well as individual employees, with recent research from Deloitte concluding that it costs UK employers up to £45bn each year. The study suggested that for every £1 spent on supporting mental health, employers get £5 back on their investment in reduced presenteeism, absenteeism and staff turnover.
Browne described that work being done by charities to promote good practice at companies on mental health as “the carrot” in the ‘carrot and stick’ scenario – meaning it is the reward or incentive for good behaviour. The benchmark, she said, could act “a bit more like the stick” – disincentivizing bad behaviour through transparency and competition.
The benchmark builds on a CCLA engagement programme that began in early 2019, inspired by recommendations from a report commissioned by the UK Government, which identified only limited attempts by companies to address poor mental health in the workplace – in contrast to their approach to physical health and safety. CCLA was told it was the only investor asking questions about mental health and wellbeing at the time, which also prompted the initiative.
In April, on the back of the covid crisis, a $2trn coalition of investors including CCLA and Schroders, wrote to FTSE 100 companies. 73 of the respondent firms acknowledged mental health as an issue in the workplace and outlined steps they were taking to address it.
The latest announcement was made for World Mental Health Day on October 10.