Which of the following is a benefit of ESG integration for investment firms?

Investment firms that integrate Environmental, Social, and Governance (ESG) factors into their investment processes can enhance their risk management capabilities. By considering ESG factors, firms can identify potential risks that may not be evident through traditional financial analysis alone. For instance, environmental risks, such as climate change impacts, can affect a company's long-term profitability, while social factors, like labor practices, can influence a company's reputation and operational stability. By integrating these factors into their investment decisions, firms can better anticipate and mitigate risks, ultimately leading to more resilient investment portfolios.

In contrast, the other options do not reflect the benefits of ESG integration. Increased regulatory burdens and higher administration costs are typically challenges that firms face rather than benefits. Also, there has been a trend toward increased investor interest in ESG investments, as many investors are more concerned about sustainable practices and responsible investing than in decreasing interest. Therefore, improved risk management stands out as a primary benefit of ESG integration for investment firms.