Anger, stress, worry, and sadness reached record highs in 2021—rising steadily over 10 straight years, in 140 countries worldwide. In a new book from Gallup, Blind Spot: The Global Rise of Unhappiness and How Leaders Missed It, author and Gallup CEO Jon Clifton notes that every world leader missed this global misery—a mistake that could have serious repercussions.
Gallup researchers found that work well-being is one of the five key elements of what they call a great life—along with financial well-being, community well-being, physical well-being and social well-being. And yet they also found that 3 billion people are miserable in the workforce. Turns out that while leaders typically focus on money and jobs, they don’t focus on the quality of jobs.
They need to start. Mental health and wellness is a global concern—and one that can no longer be taken lightly, or ignored by government and corporate leaders that don’t feel other people’s happiness is their responsibility. The fact is, mental health and wellness impacts the bottom line of individual companies, entire industries, countries, and the planet as a whole. Unwell humans make decisions that have poor downstream impact on policy, climate, and sustainability.
It’s time we make sure we’re investing in human sustainability. By focusing more of our attention and resources on the “social” component in Environmental, Social, and Governance (ESG) investing, collectively we can work to reverse this deeply concerning trend of misery and burnout. It’s not enough to know how much a company is investing in health and well-being—we should be looking at the outcomes of those investments. By creating new company structures and metrics that value (and incentivize) employee health and well-being, we can make sure that each of us brings our best creative and engaged selves to lead the sustainability movement and avoid a climate catastrophe.
The transformational change that our global economy, society, business, and investor community must lead will require levels of collaboration, creativity, ingenuity, and ambitious and bold leadership, the likes of which we’ve never seen before. This can’t happen if our entire workforce is burned out. Building on Arianna Huffington’s point that “burned out people will keep burning up the planet” and that a “sustainable planet starts with living sustainable lives,” employers and leaders have an urgent role to play in making this happen. A new survey by tech firm Cengage Group found that 89% of people have left their jobs due to burnout, with women quitting at higher rates than men largely due to the unequal burden of domestic labor. Worldwide, women and girls still undertake more than 75% of unpaid care work, accelerating gender inequality in the home and the rate of burnout for women in the workforce.
The global rise in unhappiness will be detrimental to ESG and our collective efforts to avoid a climate catastrophe if global business and financial industry leaders, including ESG investors and asset managers don’t act swiftly. Transformational change—systems change—will require everyone’s participation. Capitalism and our current work culture as we know it has to evolve if humanity is going to survive. Leaders must assess their role in contributing or even driving employee burnout and the great resignation. And then take action.
Why the S in ESG is a Great Place to Start
Historically, the “S” or social part of ESG has focused on areas like human rights and labor issues, workplace safety, and supply chain—but over the past two decades, the scope has widened. Corporate and financial industry leaders have seen the broader consequences of not prioritizing critical social factors such as employee well-being, a company’s impact on local communities and the environment, and diversity, equity, and inclusion (DEI), and have finally started to address these issues. In an article titled “Time to Rethink the S in ESG”, published in the Harvard Law School Forum on Corporate Governance, the authors highlight the role that the pandemic played in bringing the “S” into the spotlight. Today it is a barometer for corporate culture and includes DEI, pay equity, social impact, and racial justice.
The S in ESG is reported to be the most difficult to analyze and embed in investment strategies, according to the Stanford Social Innovation Review (SSIR). This is largely due to the lack of globally standardized impact measurement into mainstream investment practice. Something Sir Ronald Cohen and the Impact Weighted Account initiative is changing. Furthermore, In “Fixing the S in ESG”, author Jason Saul also lays out a strong case for what is needed to make progress. “It’s also about prosocial behavior,” he writes. “In other words, a company’s actions, policies, and investments can and should positively impact people’s lives.”
Saul’s SSIR piece notes that S&P, one of the leading ESG ratings agencies, describes the S in terms of social factors that pose a risk to a company’s financial performance. Can your company afford this? Consider this perspective from the Harvard Business Review: “Companies are likely to be more resilient in the face of unexpected shocks and hardships if they are managed for the long term and in line with societal megatrends, such as inclusion and climate change.” The “S” is also about aligning a company’s values and investments proactively in ways that positively impact communities and the environment. According to 5WPR’s 2020 Consumer Culture Report, 83% of millennials today want companies that they work for and buy from to be aligned with their values and take a stance on critical social causes.
Addressing these issues is a giant step—but it’s not the only step. Currently, there are no clear metrics and global standards that unite companies in how they measure these factors and compare performance. Today, everyone is speaking a different sustainability language. Without standards and goals, how can we be sure real change is happening?
Our well-being is tied to every bottom line
Work is a primary determinant of well-being. Measuring the impact of work on well-being can provide insights that benefit workers, employers, and society. How many more studies have to prove that employee well-being is key for workplace productivity, and essential for us to bring our most creative selves to work at a time when creative, collaborative solutions are key to address climate change?
There is a high cost to businesses when employees suffer: sick days, retention, job performance, preventable medical costs, and burnout. Gallup reports the latest figures:
- A cost of $322 billion of turnover and lost productivity globally due to employee burnout
- $20 million of additional lost opportunity for every 10,000 workers due to struggling or suffering employees
- 15% to 20% of total payroll in voluntary turnover costs, on average, due to burnout.
The Great Resignation (a term coined in 2021) describes the record number of people leaving their jobs since the pandemic—47.8 million workers quit their jobs last year, according to the Bureau of Labor Statistics, at an average of nearly 4 million each month; in the first half of 2022, the monthly quit tally held steady above 4 million. This is what happens when well-being is not prioritized and efforts aren’t measured in any meaningful way.
In a recent Fortune piece, “ESG is not enough. It’s time to add an H,” authors Michelle A. Williams and Patricia Geli make the case that if we call out “health and well-being” using the ESG framework, we can win greater favor with all stakeholders—investors, customers, and employees. And who would lead such a charge? Williams and Geli write, “This H+ESG movement should be led by institutional investors, who have considerable clout. The assets in their ESG funds almost doubled during 2021 to nearly $4 trillion.”
ESG investing is a growing industry and hot topic but is still not clearly defined. ESG assets are on track to exceed $50 trillion by 2025, representing more than a third of the projected $140.5 trillion in total global assets under management, according to Bloomberg Intelligence. That’s why real progress must go beyond ticking boxes and mitigating risk, to proactively investing and leading in ways that have a positive impact on people and planet, including prioritizing employee well-being.
Economic value is intertwined with employee well-being and quality of life. It’s going to take every player across global businesses and the financial industry to make real strides around sustainability for people and the planet. To execute ESG in its fullest form, we need to show up as the best version of ourselves. Every one of us is impacted in this ecosystem.
It’s both/and
The booming self-care industry tends to put the onus on the individual to resolve their own stress, health, and well-being, but it’s time for corporations to look in the mirror and honestly assess their own leadership culture, structure, and policies. It will take both individual self-sustainability practices and a new normal in corporate culture in order to avoid burnout.
What makes a sustainable human? These are just a few actions we can all take for ourselves and in our lives that have positive impacts on us as individuals—and also have downstream impact on overall sustainability. Some or all of these actions may be familiar to us, as these are the oft-repeated habits and rituals recommended for positive mental health and wellness.
- Decrease screen time and replace it with real-world activities that make you happy. The less we rely on electronic devices, the better for our mental health and the health of the planet. Digital technologies (including the device you’re likely reading this on right now) contribute 3.7% to total greenhouse gas emissions—roughly equivalent to the emissions produced by the global airline industry. On a personal level, leisure activities like dancing, sports, or other exercise, as well as hobbies and passions like reading, cooking, or gardening, engage your mind and body.
- Eat locally. Whenever possible, choose produce and groceries that don’t have to travel far to reach your countertop. Fruits and vegetables start losing nutrients within days of being harvested—the shorter the trip from the farm to your mouth, the more nutritious the food. In addition, supporting local farmers (and bakers, chefs, and other food merchants) helps keep local economy alive, which in turn helps ensure that local governments have the means to implement environmentally-friendly policies. Finally, the longer the distance a food item has to travel, the larger its carbon footprint. Blueberries from another country (unless that country is just down the road) have a larger climate cost than the ones from your home state.
- Find work with an employer that reflects your values. Millennials and Gen Z have gotten flak for choosing jobs based on quality of life and corporate values. But considering these criteria doesn’t just benefit the job seeker, it benefits the planet. As an increasing amount of top talent across industries show preference for companies that take climate responsibility seriously, the more companies will step up to effect serious change.
- Compost, garden, attend a community clean-up event. These things all have a shared through-line: A direct connection to the earth, and a reminder that we have a responsibility to care for it. Composting, of course, also reduces your household waste (making trash bags lighter, reducing household smells), keeps food scraps out of the landfill (where they would decompose anaerobically and release methane in the process), and provides nutrient-rich fertilizer/soil conditioner for your garden. Gardening is a proven mental health booster—sparking happiness, reducing stress, and improving sleep. And if you grow fruits, vegetables, or herbs, you’re eating hyperlocal. A community clean-up event is a different kind of caring for the planet, but it has the added benefit of modeling sustainable behavior, bringing personal satisfaction—and cleaning up your own backyard.
And these are the habits corporate and financial institution leaders must adopt to support that human sustainability:
- Give employees control over when, where, and how work gets done. As more companies move to flexible models, there are increasing examples of this, including allowing people to choose staggered working hours (for example, 8-4 or 10-6), to work remotely all or some of the time, to condense a full work-week into four days instead of five. There’s a corporate benefit to this even beyond the larger goal of happier employees (which we know also fosters productivity). With fewer people in the office on any given day, office space (and its corresponding budget) can be reduced. Not only that, with fewer people commuting to the workplace, carbon emissions will also be reduced. Corporate culture is not built by side conversations at the water cooler, and during office gossip at lunch time, and during hours that are wasted due to commuting. Culture is built around shared values and acting on those values, and ensuring employees feel valued, supported, safe, and heard at a time when the world is continuously experiencing renewed shocks and difficulties such as unprecedented wildfires, droughts, floods, lack of clean water, racial injustice, school shootings, war, and rising food and energy prices.
- Create an environment that encourages open discourse. From mental health to DEI, employees should feel comfortable bringing up these and other topics with coworkers. What’s more, as people get in the habit of having frank, open discussions and collaboration on these types of issues, it will further encourage open discussion and collaboration of all kinds—including innovative thinking around policy, impact investing, climate, and sustainability.
- Foster a culture that actually supports and encourages use of the employee benefits and programs. Lead by example, from the C-suite on down. Take vacation time—and disconnect from Slack, email, and Zoom while you’re OOO. Support employees who take advantage of tuition reimbursement programs, even when it means they need to shift their hours to make it to class. Speak to employees to understand their experience and needs, then create in-house events and programs to support them. Afterwards, use surveys and testimonials to measure impact, then use that data to further refine your company’s future wellness offerings.
- Set goals for achieving workplace well-being—then aim to surpass them. In the same way that we look at earnings month-over-month or year-over-year, we should be looking at the numbers when it comes to employee well-being. What failed? What needs improvement? How can we innovate until we drive the global numbers of anger, stress, worry and sadness down for 10 straight years and counting?
Well-being, like ESG, is a shared responsibility. We all have a part to play in driving up global happiness and life satisfaction and driving down workplace burnout. In achieving that, we will make room for stronger connections with one another, with our communities, and with our planet. We will build empathy—one of my valuable traits in today’s society. And from those places of connection and joy, we can innovate on solutions to problems that will have a positive impact on all of us—now, and for generations to come.