ESG and employee mental health: Worker well-being becomes investor concern

(Photo: shutterstock)

As companies strengthen their efforts around environmental, social and governance issues, the guiding principles in ESG – the human impact of business activities – are increasingly beginning to include how employers affect workers’ mental health and well-being.

So says Paula Allen, senior vice president and global leader in research and total wellbeing at LifeWorks, a Toronto-based provider of digital and personal wellbeing solutions. Allen discusses the growing importance of mental health in conversations about ESG, and why boards of directors and investors are pushing companies to take the well-being of their employees into account — and HR leaders to prepare for this new reality in a post-pandemic world.

BenefitsPRO: Please talk about the growing importance of mental health in conversations about ESG.

Paula Allen, Senior Vice President and Global Leader for Research and Total Wellbeing at LifeWorks

Paula Allen: For years, we’ve had really solid data that shows that when an organization supports the mental health and well-being of its employees, it makes a difference in the performance of the company, including that of the stock. But sometimes, it takes employers a while to realize that taking care of workers’ mental health is important — and then during the pandemic, employers woke up to this in a big way.

Even intuitively, the managers knew that no one would get through this if people weren’t in a good place. To date, more and more organizations are focusing on the welfare of their people. In fact, a recent survey of Deloitte Fortune CEOs found that nearly everyone now says a greater focus on wellbeing in the workplace is needed to continue beyond the pandemic. Otherwise, their organizations will not have the levels of innovation, creativity, problem-solving, and customer service they need to succeed.

How do councils and investors get companies to consider the welfare of their employees?

Entities developing ESG reporting frameworks, including the World Economic Forum, the Global Reporting Initiative and the Sustainability Accounting Standards Board, are looking to formalize guidance on disclosures related to mental health and worker well-being because it is financially important to the sustainability of the business .

It was investors who brought this problem to the attention of ESG providers, because while it is a non-balance sheet factor, they recognize that worker welfare remains an important factor in the company’s performance. At one end of the spectrum, company performance thrives when there is a healthy work environment and at the other end of the spectrum when there is a toxic environment, the damage from the fallout is that no one wants to touch it with a 10-foot pole.

Some companies now include in ESG disclosures to investors how they deal with mental health and worker welfare. These companies understand that tailoring their efforts in this area is important not only to the investor community, but also to attract and retain key talent.

What are the steps to follow for HR leaders?

The ESG report on M – Mental Health – will come. This is not common at the moment, but HR and corporate leaders should prepare for the final requirements to disclose what they are doing to promote the mental health and well-being of workers.

But for now, the most important thing is to do the right thing for their workers, as their vulnerability from the pandemic will continue for some time. Focusing on people’s well-being really makes a difference in their sense of belonging as well as their productivity at work. The good thing is that supporting an employee’s mental health doesn’t need to be stressful.

Here are some of the basic things that employers should do:

Support a sense of belonging: accept people as they are and engage them with respect.

Show recognition: People need to feel that their efforts are important and appreciated.

Creating a psychologically safe culture: No one should be underestimated in any way for sharing their thoughts.

Provide mental health resources: Consider implementing an employee assistance program or further promoting the program you have. EAP provides confidential mental health services and support 365/24/7 to employees and their families.

Support Managers: Mental health in the workplace is often available at a modest cost through your EAP. Counseling for managers is usually at no cost through EAPs for managers in dealing with behavioral and emotional challenges in real time.

Leave a Comment