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Getting Ahead on Mental Health

As the full impact of mental wellbeing on business and society becomes apparent, how can companies lead on managing mental health risks?

Mental health has long been neglected by society. Often viewed as a taboo subject, the full impact of poor mental health of employees, consumers and communities is gaining relevance for companies and investors. Businesses seeking to lead on ESG issues should start to assess mental health risks and engage with stakeholders on the impacts of mental health. Following World Mental Health Day on the 10th of October, we explore the extent to which companies are responsible for addressing mental health issues, and what actions investors are taking with respect to the related Environmental, Social, and Governance (ESG) considerations.

The Societal Impact of Mental Health

When considering which ESG issues are material, companies are increasingly adopting a ‘double-materiality’ approach, incorporating both how the business impacts consumers and more broadly society, in addition to what impacts ESG-related issues have on the company. For some companies this may mean assessing how their products and services affect the mental health of consumers. Investors are asking companies to consider these aspects. In particular, technology and media companies are increasingly coming under pressure to safeguard the mental health of their users [1]. In 2018, JANA Partners and CalSTRS sent a letter to Apple requesting greater protections for young consumers in the context of their mental health [2].

The Importance of Employee Mental Health

For most companies, mental health can be categorized as a human-capital issue. While COVID-19 has raised awareness of the topic, prior to the pandemic the US National Institute of Mental Health found that 20% of adults experienced at least one mental health issue [3]. Additionally, there is worrying evidence about mental health after the pandemic, with the employee wellness firm ‘LifeWorks’ finding that stress levels across Australia, Canada, the UK and the US are still increasing month-by-month [4]. To address this trend, many companies are beginning to assess employee mental health, with a Willis Towers Watson survey of 610 US employers finding that more than half were planning on measuring employee stress [5].

The Economic Costs of Mental Health

Inadequate treatment of mental health creates economic costs, as well as social and human impacts. These costs have been estimated by the World Health Organization to be at least $2.5 trillion a year for the global economy, and is expected to increase to $6 trillion by 2030 [6]. ‘One Mind At Work’ is a US collaboration of companies which has found that the benefits of improving employee mental health conditions outweighed the economic costs in the large majority of cases [7]. Additionally, the World Economic Forum has conducted research which shows that for every dollar invested in improving the care of people with mental health issues, there is a return of $4 to the economy [8].

Investor Awareness of Mental Health is Starting to Grow

ESG investors have begun to identify mental health as an issue within their own organizations. Nuveen surveyed 700 investment professionals globally and found 54% were ‘concerned’ or ‘very concerned’ about mental health, with burnout (44%) and stress levels (43%) receiving similar attention [9]. Putnam Investors is one example of an asset manager seeking to integrate mental health, believing that “employers have human, strategic, and economic incentives to address mental health more proactively” [10].

Despite this growing awareness from investors ShareAction, an NGO promoting responsible investment, highlighted in a September 2021 report [11] that investors are not doing enough. The report found that very few investors have directly engaged with companies on mental health in the workplace. Despite this, to increase communication between investors and companies on mental health CCLA, an asset manager linked to the Church of England, is in the process of developing a mental health benchmark to “provide a view on how listed companies approach and manage employee mental health” [12].

Rating Agencies and Reporting Frameworks

Currently, rating agencies and reporting frameworks do not identify mental health as a material issue for companies. Going forward frameworks including the Sustainability Accounting Standards Board (SASB) are currently investigating how to integrate mental health into their board human capital framework [13].


As economies recover from the pandemic, the key recommendation for companies from the Mental Health Foundation, a UK-based NGO, is “to value mental health and well-being as core business assets” [14]. Building on this, companies can start to identify the risks and impacts of poor mental health from both business and stakeholder perspectives, alongside considering what data points may be the most important to identify and monitor issues in relation to mental wellbeing. In addition, companies can develop policies on mental health in line with the CCLA’s Mental Health Benchmark Criteria [15] or the International WELL Building Institute’s workplace health standard [16]. From an ESG-investor perspective, companies which lead on the management of mental health through the lenses of social, human and economic capital will be best prepared for investor engagement on mental health.

Leaders Arena’s unique ESG market intel helps companies to better integrate, engage and lead their dialogue with Responsible Investors.



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