This chapter traces the evolution from shareholder primacy to a stakeholder-oriented view of the firm and positions environmental, social, and governance (ESG) analysis as an information system for capital allocation and risk control. We first formalize how descriptive, instrumental, and normative strands of stakeholder theory extend agency-based corporate finance by recognizing relationship-specific capital, externalities, and agency conflicts. We then show how corporate social responsibility (CSR) supplied the managerial and ethical groundwork—clarified by Carroll’s economic, legal, ethical, and philanthropic layers—while disclosure standards and assurance practices made claims comparable. ESG adds the investor-facing layer: financially and doubly material metrics that translate environmental and social exposures into cash flows, discount rates, and tail risks under board-level governance. We detail the three pillars with operational examples, explain why ratings from major providers diverge, and note the growing role of alternative data and assurance in reducing measurement noise. A comparative policy review highlights Europe’s prescriptive, double-materiality regime, the United States’ market-led and litigation-sensitive approach, and China’s carbon-anchored trajectory within an “ecological civilization” framework. At the firm level, we map a continuum of ESG strategies—compliance minimum, insurance against downside tails, and value-creation through product, process, and supply-chain redesign—while treating misrepresentation as a separate violation governed by advertising and securities law. We derive testable implications for performance, downside beta, and the cost of capital, propose observable anchors for identifying strategy shifts, and preview the book’s sector analyses, measurement blueprints, and transition playbooks that link targets to financial outcomes.