The cost-of-living crisis is not just affecting people’s bank accounts, it’s adversely affecting their mental health. According to research by The Living Wage Foundation and the Joseph Rowntree Foundation, this is true particularly among the lower paid. Increasing costs for households paints a bleak outlook, but what can we, as charity investors, do to encourage good mental health and why should we be concerned?
There is clear evidence to show that improving the mental health of an organisation saves money and that the financial ramifications of failing to improve corporate mental health are profound. According to a study by Deloitte, mental ill health in the workplace costs employers annually an average of £1,652 per private sector employee.
There may be no shortage of mental health initiatives in the international workplace, but when it comes to integrating mental health into formal management systems and processes, most global companies have much further to go.
Perhaps more importantly, creating a positive environment for mental health costs a lot less than failing to do so. In the UK, a Deloitte finds an average return of £5.30 for every £1 invested in mental health interventions in 2020-21. Globally, the World Health Organization (WHO) tells us that for every US$1 put into scaled-up treatment for common mental disorders, there is a return of US$4 in improved health and productivity.
Why does this matter to charity investors?
Appropriate action by employers not only improves the quality of people’s working lives, it also brings financial benefits at a corporate level, which means that investors stand to gain too.
In May 2022, CCLA launched the Corporate Mental Health Benchmark UK 100, with two explicit aims. First, to strengthen the hand of those within organisations that are trying to make headway on mental health; second, to mobilise the investment community into action on this important topic. During the benchmarking process, we learned that workplace mental health remains uncharted territory for many investor relations departments. This suggests that until now, the importance of mental health has been lost on the wider investment community.
To truly affect change in the real world, we know we need to collaborate and work together with other investors. With the appropriate measure of respect and encouragement, a combination of annual benchmarking and ongoing engagement could bring about real progress.
Momentum in the industry is growing. Given the cost-of-living crisis arrived hot on the heels of the Covid pandemic, there is real urgency for action. This is our message to employers: promoting and investing in the mental health of your workers is both a moral and an economic imperative. By directing resources thoughtfully, not only will you improve the quality of your people’s lives, but you will also build a workforce that is more productive, more resilient and more profitable.
CCLA Investment Management Limited (Registered in England & Wales under number 2183088) and CCLA Fund Managers Limited (Registered in England & Wales under number 8735639) are authorised and regulated by the Financial Conduct Authority (FCA). Their registered address is One Angel Lane, London, EC4R 3AB.
Amy Browne is Stewardship Lead at CCLA
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