This study investigated whether ESG management and its volatility could enhance firm value during the COVID-19 pandemic (2020-2022), considering prospect theory. Panel regression analysis, applying a fixed-effect model, revealed that while ESG scores and their volatility did not significantly impact ROA and ROE, ESG volatility had a positive effect on Tobin Q. Additionally, approximately 32.7% of Korean listed companies demonstrated excellent ESG performance with satisfactory financial results. However, companies with high economic value but low social value also accounted for 29.1%. These are attributed to various factors, particularly the COVID-19 pandemic, which caused significant disruption and led to a more than five-fold increase in the number of companies experiencing ESG scores dropping below B due to negative challenges compared to previous years. This study provides new evidence that companies can improve financial performance amidst unique environmental circumstances, such as the COVID-19 pandemic, by mitigating negative issues and bolstering positive aspects to enhance corporate value.