Almost a quarter of the UK’s largest listed employers have improved their performance on workplace mental health overall in the past year, with almost half now recognising the link between financial wellbeing and the mental health of their employees.
The CCLA's second annual Corporate Mental Health Benchmark-UK 100 report assessed 100 of the UK's largest listed companies with more than 10,000 employees each, representing a combined workforce of 5 million employees on their global approach to workplace mental health.
The asset manager's research ranks companies across five overall performance tiers to encourage companies and investors to think seriously about mental health as a systemic risk, and to develop robust management systems so that companies and their employees can thrive.
Some 24 names move up the rankings - including Centrica, Experian, HSBC and Serco, who entered the top tier.
Since the inaugural benchmark in 2022, 24 companies have moved up at least one tier, including ten firms who have moved out of tier five and almost a fifth of companies (19) ranking in the top two benchmark tiers, doubling the number from 2022.
Of the 100, four companies have made the top tier, with Centrica, Experian, HSBC and Serco Group performing strongest overall. The biggest improver, however, was Weir Group, climbing from tier four in 2022, to tier two in 2023.
And, in the aftermath of the pandemic and with the UK facing a continuing cost of living crisis, 43% companies in this year's benchmark published a formal policy explicitly acknowledging the link between financial wellbeing and mental health.
Compared to 26% in 2022, CCLA said this 17 percentage point increase is the most marked year-on-year increase across the benchmark's 27 performance indicators.
CCLA stewardship lead Amy Browne said: "Covid-19 and the cost of living crisis have only served to compound our belief that poor mental health is a systemic risk. Companies have an economic and moral imperative to manage this risk. The huge increase in companies acknowledging the link between fair pay and financial wellbeing, and the mental health of their employees, is encouraging. It demonstrates that employers have an increasing awareness of their own responsibilities in ensuring good mental health in the workplace.
"Over the last 12 months, we have been bowled over by some of the feedback we have received from UK 100 companies. Many have used our recommendations to strengthen their own approaches, while others have used our insights to initiate and escalate internal conversations on mental health to the highest level. While it's encouraging to see solid progress from many, it is early days and we'll be monitoring companies closely over time."
Despite the improvements, however, CCLA's research pointed to areas that needed close attention.
It said that, while 93% of companies recognise mental health as an important business issue, 34% are yet to formalise their commitment to mental health in a policy statement. Similarly, 89% of UK companies are clearly investing in mental health programmes and initiatives, yet only 33% of companies report on their uptake.
The report said one of the biggest areas needing improvement is in public leadership on workplace mental health - noting that, while 57% of companies have committed to removing the stigma associated with mental health (up from 44% in 2022), few leaders are publicly championing the issue.
It said for investors who believe that CEO leadership is a key driver of change, the finding that fewer than 1 in 4 CEOs (37%) are formally signalling their leadership on mental health, is a potential cause for concern.
Paul Farmer, the former chief executive of mental health charity Mind was a member of the advisory panel for CCLA's benchmark. He commented: "Business leaders have a critical and hands-on role to play to step up to this new challenge.
"Leadership must be visible and it must be intentional. The marginal improvement we've seen this year in CEOs publicly signalling their support for workplace mental health could indicate that leadership efforts needs extra energy.
"This is an area of corporate practice that has significant moral and financial implications and which companies and investors alike should be monitoring closely. The positive lessons from Covid of a more compassionate leadership must not be lost at this crucial time."
CCLA chief executive Peter Hugh Smith also believed there was a need to do more on mental health. He said: "Healthy financial markets need healthy communities and the cost of mental ill-health among the corporate workforce is significant.
"For companies, employers play an important role in improving the mental wellbeing of their workers. This includes paying people enough and fairly, offering secure, good-quality jobs, and providing benefits that extend the value of their pay.
"For investors, it is very straightforward, we want to see companies taking positive steps to address this issue and we are confident that this will deliver a triple win - for employees, for employers and for investors. The risk of not doing so is too financially punitive. We have started the journey, the early results are positive, but it's a long road ahead. Collectively as an industry, we need to help companies to do more."
Source: CCLA's Corporate Mental Health Benchmark-UK 100 report
In 2020, specialist sustainability advisory firm, Chronos Sustainability was appointed to support CCLA on the creation of the Corporate Mental Health Benchmark.
The first report on UK companies: The CCLA Corporate Mental Health Benchmark - UK 100, launched in May 2022 followed by an analysis of global companies in the CCLA Corporate Mental Health Benchmark - Global 100, launched in October 2022.
The second iteration of the UK 100 benchmark was released on 5 June 2023, and The Global 100+ Benchmark will be published in October 2023.
An expert advisory panel, comprising independent workplace mental health experts and specialist practitioners, provides independent technical guidance on workplace mental health and supports CCLA and Chronos Sustainability on the development of the benchmark. Co-chaired by Elizabeth Sheldon (COO, CCLA) and Lord Dennis Stevenson CBE, the Panel comprises Paul Farmer CBE, Age UK; Dr Shekhar Saxena, Harvard T H Chan School of Public Health; Dr Junko Umihara, Showa Women's University; Dr Richard Caddis, BT; and Remi Fernandez, United Nations Principles for Responsible Investment (UNPRI).