The business case for workplace mental health is growing louder

Rising sickness, lost productivity and regulatory pressures are forcing companies to take their employees’ mental health seriously

The average person spends around one-third of their lifetime at work, making working conditions crucial to psychological health and wellbeing.

The global disease burden of poor mental health is increasing. Scaling “cost-effective interventions” to prevent, treat and help people recover from brain health conditions could avert 267mn disability-adjusted life years globally by 2050.

This could generate up to $6.2tn in cumulative GDP gains, finds a January report by the World Economic Forum in partnership with global consultancy McKinsey Health Institute.

This has very clear impacts for businesses. The World Health Organization says an estimated 12bn working days are lost each year to depression and anxiety alone, at a cost of $1tn in lost productivity.

There is a clear moral argument for improving workplace mental health, but the “economic argument is also loud”, Todd Khozein, co-founder and chief executive of US-based responsible consulting and investment company SecondMuse, tells Sustainable Views.

Offering mental health support and a work environment conducive to positive mental health, including fair pay, flexibility and job security, can have significant productivity benefits for the workforce, and “employers have a huge role to play”, says Amy Browne, director of stewardship at UK-based responsible investor CCLA Investment Management.

Most employers are starting to realise this, and there is a “positive picture of improvement across the globe”, she tells Sustainable Views. 

CCLA runs two corporate mental health benchmarks every year, one focused on the largest listed global companies and the other on UK companies. These benchmarks measure the “extent to which the companies provide the conditions for people at work to thrive” based on their public disclosures, Browne says. 

Its 2025 global benchmark, which assessed 120 companies, found that 44 per cent acknowledge workplace mental health as an important concern for the business, while 19 per cent have an overarching corporate mental health policy.

Meanwhile, combined results from both 2025 benchmarks show that since 2022, when the project began, 74 companies have improved their performance tier by at least one step, impacting 5.3mn employees globally. 

Companies are assessed on their adoption of mental health policies, how they are implemented, and whether they report on the scheme’s impact.

Investing in mental health also generates significant returns for companies. For every $1 spent on mental health, companies or governments see four times returns, says Khozein. Investing in the mental health of young people, who are statistically more likely to suffer from such problems, brings a 23 times return, he adds.

The productivity ‘crisis’ pushes regulators

The UK and much of western Europe is seeing a slowdown in labour productivity growth relative to other advanced economies, notably the US. 

Average annual growth in labour productivity — measured as GDP per hour worked — in the EU increased by 2.4 per cent between 2019 and 2024, compared with 9.7 per cent in the US, shows data from the European Employers’ Institute.

Policymakers are looking at ways to boost workforce productivity. While a range of factors impact overall productivity, improving mental health is one way of getting more people into work and working better, says Khozein.

Meanwhile, the WHO’s call for companies to take action on mental health is based on improving living standards and the financial and reputational risks of ignoring the issue.

Europe is leading the way. Since 2009, French employers are required to identify and tackle indicators of workplace stress. Meanwhile, under the Norwegian Working Environment Act 2009 companies are required to manage workloads, working hours and technology to ensure employees do not suffer adverse physical or mental health effects. 

In Switzerland, companies must take “all necessary measures” to preserve the physical and mental wellbeing of employees under labour laws. And Germany, Ireland, Spain and the UK require companies to consider psychological health under occupational risk assessments.

The US does not mandate employers to manage workplace mental health proactively.

But it is difficult to build up a full picture since reporting requirements are patchy. The EU’s Corporate Sustainability Reporting Directive includes mandatory reporting on social and workforce issues for the largest companies, and reporting on the health of the workforce could be a future requirement in the UK.

Following the 2017 Thriving at Work review, the UK government issued voluntary guidance encouraging employers to report on mental health support. The equality (race and disability) bill, proposed by the government and under development, is also expected to introduce mandatory disability pay gap reporting, including mental conditions, for employers with more than 250 staff.

But the backlash against environmental, social and governance is making it harder to capture and report this data, especially in the US.

“The political environment in the US is making it more difficult for some companies to disclose information [on their mental health provisions],” says Browne. At some companies, the mental health or wellbeing of staff will sit within the diversity, equity and inclusion teams, which are being “drastically reduced” in the US in the face of anti-DEI policies, she adds.

These changes are reflected in the CCLA benchmark data, which shows fewer companies demonstrating improvement between 2024 and 2025 than between 2023 and 2024. 

However, anecdotally many US companies are continuing to provide mental health services because it’s “good for business”.

Khozein suggests that framing the issue of mental health through the lens of “corporate performance” can shield it from being swept into the “ESG culture wars”.

Digital workspaces

The need for mental health services in the workplace has become more relevant with the rise of technology, says Khozein.

Remote or hybrid working, where employees are not in the same room as one another, can lead to loneliness, especially among younger employees who may never have experienced work prior to this shift, he says. 

Further, as an investor he argues that companies should be considering mental health within their AI strategies.

Our mental health affects our ability to adapt and think creatively, skills that are only becoming more necessary as AI takes on repetitive office tasks. Investors need to be reassured that companies are able to “weather” the AI shift by investing in the adaptability of their workforce, he says.

Brain capital 

Meanwhile, a small but growing group of investors are showing a specific interest in “mental health investing”, says Khozein.

One example of the emerging “investment infrastructure” for the sector is the Global Brain Capital Index, developed by economists based out of the Euro-Mediterranean Economists Association, he adds. 

The index, first launched in 2023, is a measurement framework that places brain health and brain skills at the centre of economic performance and societal resilience. It is built on the logic that brain health is vital for productivity, adaptability and social cohesion in the face of 21st century challenges, including the climate crisis. 

The benchmark seeks to support investors and policymakers in making long-term economic and social decisions.

This type of investing is “getting on people’s radars”, and in around 10 or 15 years it will be as mature as green investing is today, Khozein predicts.