This study explores market reactions following corporate crises, focusing on the role of Environmental, Social, and Governance (ESG) performance and crisis response speed in mitigating market penalties and firm-specific risk, using Stakeholder Theory. Analyzing 1,036 Class I high-risk product recalls from 2012 to 2022, as classified by the U.S. Food and Drug Administration (FDA), the study employs Ordinary Least Squares (OLS) regression analysis in a dual-timeframe approach to assess the effects of firms’ crisis management strategies at two critical junctures: pre-crisis ESG performance as a preemptive tactic and crisis response speed as a reactive measure. The findings demonstrate that strong pre-crisis ESG performance significantly reduces market penalties and subsequent firm-specific risk, acting as a buffer during crises. This protective effect exhibits a temporal decline, highlighting the diminishing nature of ESG's shielding advantage over time. Furthermore, crisis response speed is found to serve as a moderating factor, impacting the efficacy of ESG performance as a defense mechanism. Swift crisis responses amplify the risk-mitigation benefits of high ESG performance, while delayed responses diminish these benefits and elevate risks. By demonstrating the time-sensitive nature of ESG benefits in crisis scenarios, this study provides novel understanding into the criticality of rapid responses to maximize ESG’s protective capabilities, offering strategic insights for optimizing crisis management.