ESG risk integration embeds sustainability considerations across risk identification, assessment, reporting, and mitigation activities rather than treating them as separate concerns. This approach recognizes that ESG factors create material financial, operational, and reputational risks while also presenting strategic opportunities. Integration involves updating risk taxonomies, assessment criteria, data collection, and reporting frameworks to capture ESG dimensions. Investment firms increasingly integrate ESG risks into portfolio construction and due diligence, evaluating companies on carbon emissions, labor practices, board diversity, and supply chain ethics, recognizing that poor ESG performance correlates with higher long-term risk and lower returns.