Modern Economics & Management Forum

Against the backdrop of deepening global sustainable development initiatives and the advancement of green finance policies, ESG has become an important tool for financial institutions to achieve high-quality development and effective risk management. As key allocators of financial resources, financial institutions' ESG management practices not only affect their own operational stability, but also influence the green transformation of the real economy. This paper reviews the theoretical foundations and developmental trajectory of ESG, analyzes the connotation of ESG management in financial institutions, and summarizes its evolution from the initial stage to the integration stage and further to strategic deepening. It further explores the practical pathways of integrating ESG into corporate governance and strategic management, embedding ESG into business operations and risk management systems, and improving information disclosure and performance evaluation mechanisms. In response to existing challenges-such as insufficient strategic integration, imperfect data systems, and limited risk management capacity-this study proposes strengthening top-level design, improving institutional frameworks, and promoting technological empowerment. The aim is to facilitate the transformation of ESG from externally driven compliance to internally embedded development, thereby achieving coordinated improvement in both economic and social benefits.