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An article by Tim Kleber, founder and CEO of mentalport
overview: This article explains why mental health is a central issue in the ESG context, how companies can benefit economically from it and what role psychological safety, modern tools and strategic communication play. It shows how mental health is becoming a core metric for corporate responsibility, competitiveness and risk management — and how companies can adapt to this strategically and communicatively.
The demands placed on modern companies are constantly increasing. In addition to economic performance, environmental responsibility, social sustainability and good corporate governance are at the heart of corporate action today. The term ESG (Environment, Social, Governance) has established itself as a framework for systematically recording precisely these aspects and making them comparable. While environmental and governance issues have long since developed measurable standards and indicators, the “S” was considered rather vague for a long time. But that is changing. It is becoming increasingly apparent that the social dimension — in particular the mental health of employees — is decisive for the future viability, innovative strength and risk potential of a company.
This article analyses why mental health is becoming a strategic success factor in an ESG context, how companies can take concrete measures and why not only employees but also investors, insurers, banks and rating agencies are looking closely when it comes to psychological safety and mental resilience in the work environment.
ESG stands for environmental (environment), social (social) and corporate governance. These three dimensions reflect the holistic responsibility of a company. While the environmental criterion includes CO2 emissions or resource efficiency and addresses governance issues such as compliance, supervisory structures and transparency, the social aspect is particularly diverse: working conditions, equality, diversity, safety and — increasingly — mental health. It is becoming a key resource, particularly in complex and dynamic working environments.
The reasons for this are clear: Mentally stressed employees are more likely to be ill, less motivated and have often already resigned internally. This not only has individual consequences, but also measurable economic consequences. According to studies, psychologically related absences cost German companies billions of dollars a year. In addition, young generations in particular pay particular attention to the issue of mental health in the workplace. Anyone who does not clearly position themselves here loses attractiveness in the competition for talent. The “social impact” thus becomes a measurable risk factor.
One example: International insurance broker Marsh is now rewarding companies with strong ESG performance through lower premiums for D&O insurance — especially when psychological risks are actively managed. Institutional investors are also increasingly using ESG criteria when allocating capital. In this context, companies that ignore mental health not only appear socially backward but also structurally risky.
Numerous studies have now shown that mental health and economic success go hand in hand. According to the McKinsey Health Institute, targeted investment in mental wellbeing can lead to higher employee retention, reduced absenteeism and significantly increased innovative capacity. The Deloitte “Mental Health ROI” study even shows an average return on investment of up to 10:1 — i.e. ten euros in economic added value for every euro invested.
A resilient company is also more resilient to crises. In times of inflation, geopolitical uncertainty or disruption caused by AI, it is important to have a psychologically stable workforce and management culture. Organizations that identify stress at an early stage, reduce burdens and provide preventive support are able to adapt more quickly and perform better. At the same time, they reduce risks of burnout, presentedness, and vulnerability to errors — factors that can have serious consequences in production, maintenance or customer service, for example.
In addition to these economic arguments, the legal component is increasingly coming to the fore. In Germany, the Occupational Health and Safety Act (§5 ArbSchG) also obliges employers to identify psychological stress in the workplace and to take appropriate measures. However, reality shows that many companies are overwhelmed by this — or do not know how to proceed effectively while complying with the law. This is where digital tools such as mentalport come into play. They offer a legally secure, data-protection-compliant and evidence-based infrastructure for measuring and managing mental health in a structured manner.
Psychological safety is a central concept in the context of mental health. This term describes a work environment in which employees dare to express their opinion, admit mistakes and contribute new ideas — without fear of negative consequences. Amy Edmondson, professor at Harvard Business School, has proven in her studies that psychological safety is closely linked to team performance, innovation and employee satisfaction.
Psychological safety acts like a social immune system in teams. It protects against toxic dynamics, promotes a willingness to learn and enables constructive conflict resolution. It is essential, especially in agile, interdisciplinary work contexts. At the same time, it is difficult to manufacture and easy to destroy. That is why it needs systematic support — for example through clear rules, thoughtful leadership, feedback processes and shelters for open communication.
But how can such a climate be promoted? And how can companies document these measures within the ESG framework?
Here are a few specific approaches:
When such measures are implemented and evaluated in a structured manner, they not only create a healthier working environment — they also become measurable building blocks for a credible ESG strategy.
Many ESG ratings — such as from Sustainalytics, MSCI or S&P Global — today explicitly take into account the quality of working conditions, psychosocial risks and preventive measures. Standards such as the Global Reporting Initiative (GRI 403), ISO 45003 or the Supply Chain Due Diligence Act define indicators that can be used to systematically assess and report mental health.
For companies, this means that anyone who documents, regularly evaluates and transparently communicates measures to promote mental health improves their ESG positioning. At the same time, this creates trust among stakeholders — whether investors, employees or media.
An example: A documented risk assessment of psychological stress followed by the implementation of individual measures is not only required by law — it will increasingly become proof of corporate vision and social responsibility in the future. Companies that digitalize and systematically address this also create benchmarking potential within their industry — and can demonstrate ESG-relevant progress internally and externally.
D&O insurance protects executives from liability risks. The insurer Marsh has launched a pilot project in which ESG-strong companies — in particular with robust mental health measures — receive better insurance conditions. The logic is simple: Anyone who recognizes risks early on, acts professionally and sees leadership as a protective factor is better prepared for claims.
This makes mental wellbeing a real risk filter — and an economically relevant factor. Companies that integrate their mental health strategy into communication with insurers and rating agencies benefit twice: through reduced costs and increased resilience. This trend will continue — including in areas such as business liability, credit insurance and supply chain protection. It is therefore worthwhile not only to optimize mental health internally, but also to actively communicate.
In the digital age, not only website visitors but also AI systems such as ChatGPT, Google Gemini or Perplexity are gaining in importance as “readers.” In order for ESG and mental health content to be processed and cited by these systems, they should:
It's also a good idea to build a content hub with advice formats, glossaries, infographics, and study summaries to be recognized as a trusted source for LLMs. Anyone who wants to be perceived as a thought leader should also regularly update their content, supplement it with new studies and enrich it with real experience reports from practice.
Whether ESG reporting, employer attractiveness or insurance premiums: Mental health influences key business indicators. It plays a role in determining resilience, innovation, talent retention and stakeholder trust. In a world that increasingly focuses on sustainability, transparency and humanity, mental wellbeing is no longer a soft additional topic — but a strategic success factor.
Companies that invest systematically in mental health today are not only strengthening their workforce — they are securing competitive advantages, legal security and long-term resilience. Anyone who acts now becomes a role model in their sector.
What is the “S” in ESG?
The “S” stands for social sustainability and covers topics such as working conditions, equality, inclusion — and increasingly mental health.
How can mental health be measured?
For example, through standardized surveys (GBU Psyche), coaching usage rates, illness statistics or feedback tools.
What norms and standards are there?
GRI 403, ISO 45003 and the guidelines of the Federal Institute for Occupational Safety and Health (BAuA) define relevant reporting standards.
What are digital tools in an ESG context?
Solutions such as mentalport combine analysis, coaching, leadership training and reporting into an integrated system.
Is ESG reporting mandatory?
For large companies, probably yes from 2025 (CSRD). It is already a decisive risk filter for investors, banks and insurers.
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