ESG integration moves beyond values-based screening to systematically analyze how environmental, social, and governance factors affect financial performance and enterprise risk. Investors evaluate companies on carbon footprint, labor practices, board diversity, and executive compensation alignment. A lender incorporating ESG might adjust credit terms based on climate transition risk exposure or supply chain human rights practices. Integration approaches range from exclusionary screening to positive selection and active engagement. Evidence suggests ESG integration improves risk-adjusted returns by identifying under-appreciated risks and sustainable competitive advantages. Disclosure standards like SASB and frameworks like TCFD facilitate integration through standardized, material metrics.