The ESG–Efficiency Nexus: Insights from the Oil and Gas Industry

This study investigates the relationship between operational and financial efficiency and Environmental, Social, and Governance (ESG) performance in the Oil and Gas sector, a highly sensitive industry in environmental and social terms. A quantitative, descriptive-explanatory approach was adopted, analyzing data from 131 companies obtained from the Eikon database by the London Stock Exchange Group (LSEG). The analysis was conducted in two stages. First, efficiency scores were calculated using a two-stage Network Data Envelopment Analysis (DEA) model. In the second stage, non-parametric tests (Mann-Whitney and Wilcoxon) were applied to assess ESG performance differences between more and less efficient firms. Results indicate that more efficient companies tend to have significantly higher overall ESG scores and outperform in most components across the Environmental, Social, and Governance pillars. Notable exceptions include the Shareholders dimension, which showed no significant difference, and Controversies, where more efficient firms performed worse—possibly due to their greater exposure and visibility. To deepen the analysis, logistic regression was used to identify which indicators are most associated with superior efficiency. Five dimensions were statistically significant: Corporate Social Responsibility Strategy, Community Engagement, Management Practices, Product Responsibility, and Innovation. Corporate Social Responsibility Strategy had the highest marginal effect, increasing the likelihood of superior efficiency by 11.3%. These findings suggest a positive relationship between ESG performance and efficiency, reinforcing the strategic importance of integrating sustainability into core business practices for enhanced performance and competitiveness in the Oil and Gas industry.