There is growing evidence strong mental health support can be a significant factor in strong workforce outcomes. While several large UK companies are taking steps to improve support services for their employees, much still needs to be done.
The long shadow of the Covid-19 pandemic has seen mental health become a bigger and bigger concern for the public, for government and, now increasingly, for investors in the UK market.
That’s because the UK is increasingly feeling the financial toll of poor mental health. An NHS-commissioned study this year estimated annual economic losses due to mental ill health at around £110bn ($139bn) in England alone, while Deloitte research has found UK employers in the private sector lose around £51bn each year to poor workplace mental health.
It's little surprise then that this topic has surfaced as a key part of the UK general election campaign with the Labour manifesto arguing “Britain is currently suffering from a mental health epidemic”
Leaders and laggards revealed
It’s this context that makes the publication of the latest CCLA Corporate Mental Health Benchmark - UK 100 this month of huge value to wealth managers. The benchmark – which ranks 101 of the UK’s largest listed companies on how they manage and report on workplace mental health – reveals which firms are best prepared to be ahead of the coming wave of policy action on mental health, and which might struggle to keep up.
Perhaps the benchmark’s most notable finding is that there is an upswell of leadership and best practice to be found in several large UK companies. Six firms made the top performance tier of the benchmark: BT Group, Centrica, Entain, Experian, J Sainsbury and Serco Group, with all those firms taking steps such as providing access to multiple mental health support services for employees, providing mental health training to line managers and publishing a CEO commitment on workplace mental health. Notably 20 firms ranked in the top two performance tiers of the benchmark in 2024 – double the number that qualified in 2022.
Another key finding was that the financial sector does especially well on mental health support. One in four of the companies in the top two tiers are financial service providers and the sector performs stronger than any other large sector in the UK 100.
Slow moving majority
Despite this encouraging leadership at the top, there is still a long way to go for the slow-moving majority of firms.
Around half of UK firms (51 companies) rate in the bottom two tiers, suggesting they are still in the early days of formalising their mental health management approach and disclosure. On the issue of providing training for managers – something the World Health Organization cites as an important intervention for companies to support worker mental wellbeing – only 44 per cent of companies disclose that they provide mental health training for line managers.
Similarly, only 35 per cent of companies publish clear mental health-related objectives and targets. That is in stark contrast to leadership examples such as J Sainsbury, which publishes a time-bound goal to train all line managers in mental health awareness, and Glencore, which has a target for all offices to have an employee assistance programme in place to support emotional and psychological wellbeing.
This significant gap between leaders and laggards is revealing for investors and advisers, who are increasingly seeing good management of mental health as a lens by which to identify the well-managed, productive workplaces most likely to yield robust returns.
The role of the investment industry
So, what more can the investment industry do to drive progress on corporate mental health?
While those managing money can readily engage with investee companies to promote change, the advisory industry has traditionally been one step removed from stewardship. Thankfully this is starting to change.
Last year, a coalition of advisory firms came together as ‘AdviserAction’ to engage collectively with companies on sustainability issues. The first area targeted by the group is workplace mental health, demonstrating that mental health is now a key focus for investor engagement. All aspects of the sector can be part of the movement to manage money for good.
Mental health and the health of the UK market
When considering the declining number of listings on the London Stock Exchange in recent years, one might not immediately make the link to the issue of mental health. It is, however, worth considering.
Healthy financial markets depend on healthy communities. The best route to resuscitating the UK’s reputation as a world leading financial centre is to re-establish its position as a market that sets the highest standards – including in labour rights and human resource management.
With growing evidence that strong mental health support can be a significant factor in strong workforce outcomes, it is an important element for UK firms and the wider market to consider as one of the key building blocks to reaffirm a reputation for leadership. Such leadership could help to entice back to the UK some traditional global investors, such as global family offices and wealth managers.
Clearly, excellence in mental health alone will not boost the total market capitalisation of the London Stock Exchange, and likewise the private sector cannot be solely responsible for curtailing the UK’s mental health crisis. This needs the full attention of policymakers and healthcare providers, alongside corporate efforts.
Regardless, fixing the problem could provide not only a significant boost to public health, it could also drive better economic health and perhaps a stronger reputation for the UK market abroad.
Amy Browne is stewardship lead at CCLA Investment Management
