The Market-to-Book (M/B) ratio identifies not only growth opportunities but also whether a stock is overvalued or undervalued. This study dissects the M/B ratio into growth opportunities (long-run value to book; LVTB) and misvaluation (firm-specific error; FSE and time-series sector error; TSE) and then analyzes how these factors manifest based on ESG characteristics. The empirical findings reveal that ESG ratings have a positive impact on both valuation errors (FSE and TSE) and long-term growth opportunities (LVTB). In terms of economic impact, when ESG ratings increase (or decrease) by one grade, the firm-specific error increases (or decreases) by 5.1%, the time-series sector error increases (or decreases) by 0.9%, and long-term growth opportunities increase (or decrease) by 0.8%. This suggests that ESG ratings are more closely related to a valuation error based on firm-specific characteristics rather than long-term growth factors.