If company management are not sold on the human reasons for supporting employees’ mental health, there are “major financial reasons” for doing so, according to CCLA Investment Management’s stewardship lead Amy Browne.
In this episode of the Green Dream, Browne explains how businesses that get mental health in the workplace right will see stronger share prices over time and why creating a positive environment for mental health in the workplace actually costs a lot less than failing to do so
She also talks about how she has been “blown away” by the progress made at some of the corporates and what fund selectors should be asking asset managers on this topic.
Watch the full video interview above and read the transcript below.
NK: Hello and welcome back to the Green Dream. Today I’m joined by Amy Browne, who is stewardship lead at CCLA Investment Management. We’re going to talk about all things mental health. So you’ve been doing quite a lot of work around this. Can you talk to us about why it’s important for corporates to consider this and also investors?
AB: There are lots, lots of reasons, but you know, for people who may not be so sold on the human reason for supporting employees’ mental health, there are major financial reasons for doing this as well. So to give you some numbers, for example, mental ill health at work costs businesses billions of pounds every year. And Deloitte estimates that it costs an average of £1,600 per employee every year.
If you extrapolate that out based on a company like Amazon, that amounts to a total loss every year of $2.7bn.
See also: – ISSB to rock regulation and why benchmarking businesses on mental health works
NK: Wow. I think people realise this that much involved. Obviously, there is the risk, the human element, but that is such a huge figure.
AB: Yes. And it’s a very, very material figure, which is why it’s not only important for the companies themselves, for the employers, but also for investors.
Now, possibly, more excitingly, creating a positive environment for mental health in the workplace actually costs a lot less than failing to do so. Deloitte again finds an average return of £5.30 for every £1 invested in mental health interventions in the workplace. So it’s a win-win situation. If we can get it right, businesses will prosper and which should in theory translate to stronger share prices over time.
NK: Okay, fantastic. And CCLA, you’ve created this mental health benchmark which we’ve covered when asked to comment it, and it’s been updated recently. Where have there big jumps, and what has impressed you in terms of the initiatives that you’ve seen?
AB: So many and actually we’ve delighted by the amount of engagement that companies have had with this initiative, because often as a fairly small investor, it’s very difficult to get companies to listen. And often investor relations departments will see the requests in emails and pull up the drawbridge and say, either stonewall you, not respond at all, or give a very standard response and then done with it? But I think, and it’s really nice to see because the project is beginning to mature, companies are coming to us now for recommendations.
We’ve had a lot of companies… So we’re moving as investors from being what maybe we were perhaps a little bit of the pest in the past to free management consulting in many ways. And so we’ve had a great uptake by scores of companies who have come in asking us for advice. If you were to ask me for a couple of specific examples of companies that have blown us away, Weir group was one; their score against the benchmark criteria increased by almost 45% in a year.
I called them up I said ‘how did you do that?’ Because that is that is a lot of work. And she said, well, first of all, it started when your letter, the letter that we’d written on behalf of an $8.5trn investor coalition, arrived and landed on the chief executive’s desk and that then sparked internal conversations.
We then built a project plan around your recommendations and then spent months, almost a year building that project out and implementing it across the business. And it worked.
NK: Okay, fantastic. So why what would you like to see in terms of corporate action? Are there any particular areas that really need to focus on this?
AB: Yes, I think it’s very easy for companies to throw out initiatives here, there and everywhere aimed at supporting people, which is great, and it definitely has a place. But what we’d really like to see is companies really acknowledging the link between the fundamental principles of good work and good mental health. So that’s not just about yoga sessions and fruit and wellness training. This is about acknowledging the link between fair pay and financial wellbeing and good mental health. If you’re not being paid fairly for the work that you’re doing, you’re not going to be a happy or productive member of the of your business.
Diversity, equity and inclusion; if you’re feeling like a marginalised member of your business again, you’re not going to be happy or productive employee. Equally anti-bullying and non-harassment; if a company does not have a formal position that is carried out solely throughout the business, again, bullying and harassment causes people too often, very often actually, to leave the business altogether, and then there are costs associated with that.
NK: Okay, What should fund selectors be asking asset managers about this? What should they be saying in their due diligence?
AB: I would say, first of all, do you do you speak to your investee companies, the companies that you’re investing in, do you ask them about how they take care of the health and wellbeing of their own employees?
Because actually employees are often the number one asset in a company that’s really, really important. So what do you do? What do you ask investee companies about how they’re looking after their people? Then I would love them to say, ‘have you ever heard of the CCLA Corporate Mental Health Benchmark? And if you haven’t, you should have a look at it because it’s a great resource for investors.
NK: Okay, fantastic. Yes, It’s good to have an uplifting conversation about mental health. So thank you for coming. We always in the Green Dream question with what is your favourite sustainable drink or snack,
AB: Snails.
NK: Really?!
AB: Yeah. So I have a small garden that I have way, way too many snails, so you just pluck them off the ground on a wet day and just pop them in some boiling water and a little squeeze of ketchup. And then I pop them in.
NK: Okay, well, I’m not sure about that one but thank you very much.