The Oil & Gas (O&G) sector is considered one of the major contributors to environmental impacts due to its intensive reliance on fossil resources and significant release of greenhouse gases. It also represents a key sector for the adoption of circular economy (CE) strategies to address these challenges and advance toward achieving the Sustainable Development Goals (SDGs). Accordingly, the present research aims to examine how the O&G sector’s commitment to the SDGs influences and supports the circular transition. Starting from developing a CE performance index based on the SDGs, the study aims to explore the impact of some firm characteristics on the CE performance index for SDGs. More in detail, adopting a legitimacy theory perspective, the empirical analysis focuses on a global sample of companies operating in O&G sector, highlighting how financial and corporate governance variables influence firms’ ability to implement CE practices in line with the SDGs effectively. The study offers several implications that could have broader relevance for policymakers, industry practitioners, and academia, fostering a more comprehensive understanding of the challenges and opportunities associated with embracing CE principles for sustainable development in hard-to-decarbonise sectors.