This review examines the evolving role of environmental, social and governance (ESG) criteria in private equity (PE) investment decision-making and evidence on long-term financial performance. We synthesize theoretical mechanisms linking ESG integration to value creation (risk management, operational improvements, demand signals, and access to capital), review empirical cross-sectional and private-market studies, and evaluate measurement, disclosure, and methodological challenges that complicate inference. The review draws on academic meta-analyses, industry benchmark reports, and recent private-market research to provide a balanced assessment: ESG integration in private equity increasingly appears to be associated with non-inferior and in a number of settings superior long-term performance, though results vary by strategy, measurement, time horizon, and ESG implementation intensity. We identify gaps (causal identification, heterogeneous effects across strategies/geographies, standardization of ESG metrics in PE) and propose a research agenda and practical recommendations for limited partners (LPs), general partners (GPs), and regulators.