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Considering environmental, social and governance (ESG) factors is vital in climate change mitigation. Energy companies must incorporate ESG into their business plans, although it unquestionably affects their corporate financial performance (CFP). This paper aims to investigate the effect of ESG on energy companies’ profitability through return on assets by analysing the combined score and individual dimensions of ESG.

The study examined a panel data sample of 911 firm-year observations for 85 European energy-sector companies during 1995–2020. Two distinct modelling specifications were applied to explore the impact of ESG components on the CFP of EU energy companies. The financial data and ESG scores were obtained from the Thomson Reuters Eikon database in July 2021.

The empirical findings revealed that energy companies’ profitability is marginally and negatively affected by their ESG performance. Whereas independent evaluation of the ESG subcomponents indicated that environmental responsibility has a significant negative effect. In contrast, corporate social and governance responsibilities are positively but not significantly associated with the company’s CFP.

This study fills a research gap in the ESG–CFP literature in the European energy sector, a pioneer in sustainable development. To the best of the authors’ knowledge, this study’s originality lies in its analysis of ESG factors’ role in profitability by considering different EU countries and energy sectors.

The purpose of this paper is to estimate energy efficiency of 132 countries from 2007 to 2014 according to their performance, categorizing the nations into similar groups.

Data envelopment analysis model based on Goal Programming and then K-Means clustering algorithm are used to determine the efficiency and clustering the nations based on their efficiency performances.

The results of the study reveal that developing low-income countries could lead to high energy-efficiency scores, and countries with different development and income levels can become efficient in the field of energy consumption. Following the nations during a seven-year period also indicates that the changes in energy-related indicators such as renewable energy consumption and energy productivity are the main drivers to move a country between clusters.

The present study aimed to investigate whether similar nations with similar energy efficiency level in a cluster are similar in their development and income level, and changing the energy consumption pattern during the seven-year period could move the countries from a cluster to another one.