There are demonstrated links between employee wellbeing, productivity and performance, which is why, as long-term investors, ACSI's members focus on workplace safety issues.
But in recent years, the links between health and productivity have sharpened, and investors are increasingly keen for business to treat safety holistically by also considering the mental health of the workforce.
According to the 2022 National Study of Mental Health and Wellbeing, 21% of Australian adults had experienced mental ill health within the last 12 months. Alongside the human toll, Comcare estimates suggest absenteeism relating to poor mental health costs Australian businesses approximately $11 billion. The Productivity Commission prices productivity loss at $17 billion annually, while the cost of mental health workplace compensation claims tripled in the nearly 20 years to 2019.
Mental health is very clearly a material risk. It is not for companies to solve the mental health crisis on their own, but research shows workplaces can make a significant difference. According to the Productivity Commission, for every dollar invested in workplace mental health interventions, returns of between $1 to $4 follows.
Investors face significant challenges in assessing companies' approaches to such a complex and interconnected issue. Transparent public reporting is one way companies can help investors to assess how a company approaches mental health in the workplace. It also provides insights into company culture, board oversight and accountability.
This kind of reporting is in early stages in Australia, so to better understand the baseline state of reporting, we commissioned an assessment of ASX20 reporting against the CCLA Mental Health Benchmark.
It was pleasing to see that psychological wellbeing of the workforce is resoundingly on the business agenda. It was also clear, from discussions with participating companies, that more mental health initiatives are in place than are being publicly reported. This gives companies a significant opportunity to demonstrate to investors how they are realising the positive benefits of a mentally healthy workforce.
We understand that more companies likely to be working on this issue without necessarily reporting externally. With mental health disclosures still in their infancy in Australia, no one expects immediate perfection, however, we hope these findings will be a catalyst for both company and investor action on workplace mental health.
The better companies can manage these issues and build investor understanding, the better positioned we all are to understand current practice and engage on areas of potential improvement. Both the UK and global benchmarks have demonstrated steady improvement in the transparency and approach taken by companies on this material issue. These improvements are encouraging and ACSI looks forward to ongoing discussions on this important topic to understand individual company context.
