CSRD And Employee Mental Wellbeing: A New Era In Sustainability Reporting

Keywords: Mental Wellbeing, Sustainable Business, ESG, CSRD, CorporateSustainabilityReportingDirective

Author: Lisa Munro

Date: 15 January 2024, Worklife Digital

2024 sees the adoption of the Corporate Sustainability Reporting Directive (CSRD) by the EU. This new directive, which expands upon the previous Non-Financial Reporting Directive (NFRD), will require companies to be more detailed in their sustainability reporting, covering not just environmental issues, but also efforts to promote and protect the workforce, including health & safety, sickness and absenteeism, and worker engagement and satisfaction.

Companies must publish their information in a dedicated section of their company management reports, usually included in their annual report. Reports must cover:

- Environmental matters
- Social matters and treatment of employees.
- Respect for human rights.
- Anti-corruption and bribery.
- Diversity on company boards (in terms of age, gender, educational and professional background).

Companies will need to provide information that is:

- Qualitative and quantitative.
- Forward-looking and retrospective.
- Based in the short, medium and long-term.

The CSRD also features mandatory assurance for reporting by an independent assurance service provider against sustainability reporting standards. This is to make sure information is accurate and reliable.

Why is employee mental wellbeing important for CSRD?

The link between a healthy workforce and a sustainable business is undeniable. Poor mental wellbeing can translate into numerous costs for companies, impacting productivity, retention, and healthcare expenses. A toxic work environment, moreover, tarnishes a company's reputation and hinders talent acquisition. This connection is only accentuated by the heightened stress and uncertainties brought on by the COVID-19 pandemic, making employee mental wellbeing an even more pressing concern.

Under CSRD, companies will be required to report on their efforts to promote and protect their workforce. These include:

1. Health and safety policies and their implementation: This area naturally encompasses measures taken to safeguard mental health, such as stress management programs and awareness campaigns.
2. Absenteeism and sickness trends: Analysing patterns in employee absences and illness reveals potential correlations with workplace stress and mental health concerns.
3. Worker engagement and satisfaction metrics: Low engagement and declining satisfaction can signal underlying issues affecting employee well-being, including mental health.

By reporting on these metrics, companies can shed light on their impact on employee mental health, revealing areas for improvement and highlighting existing positive practices.

Benefits of integrating mental wellbeing into CSRD reporting

1. Identifying areas for improvement in mental health support within the workplace.
2. Promoting positive employee relations and fostering improved productivity.
3. Benchmarking performance against peers in fostering a mentally healthy work environment.
4. Enhancing employer reputation and attracting top talent.

Preparing for the future of CSRD and employee wellbeing

Companies can proactively take steps to integrate mental wellbeing considerations into their CSRD reporting:

1. Regularly measure and track health, safety, absenteeism, and worker engagement metrics, analysing potential correlations with mental wellbeing.
2. Develop comprehensive health and safety policies that address mental health issues.
3. Implement programs and initiatives that promote employee well-being, including stress management and mental health awareness training.
4. Training managers on how to identify and support employees with mental health risks

By taking these steps, companies can ensure that they are well-positioned to comply with CSRD and reap the benefits of a healthy and productive workforce.

WorkLife Digital is a global mental-wellbeing consultancy driven by the mission to improve the sustainability of businesses. Our psychological wellbeing tool, Worklife Quotient (WL-Q), is modelled on cutting-edge scientific research and provides organisation-wide measurement and intelligence on the mental wellbeing levels and psychological resilience of staff. WL-Q also assesses the impact of organisational practices (i.e. people and culture, leadership styles, organisational purpose and values, social impact) that have a direct influence on staff wellbeing and provides strategic recommendations on addressing risks and promoting strengths.

For more information, get in touch at lisa@worklife.digital