This thesis investigates the financial spillover effects of early ESG (Environmental, Social,and Governance) adoption by Swedish companies. Focusing on the industrial machineryindustry, we examine a two-decade period to see how ESG initiatives influence peer firms' profitability, measured by ROA. Drawing on theories of sustainability contagion andcompetitiveness, we employ a Difference-in-Differences design complemented by panelregression models. The analysis reveals that ESG adoption by first movers is associated witha slightly negative financial response among foreign peers but a significantly positive effectamong Swedish peers. These findings highlight the asymmetric competitive implications ofESG adoption and offer strategic insights for firms and policymakers navigatingsustainability transitions in global supply chains.