Sustainability Governance
Sustainability is central to OMV’s Strategy 2030, evidenced by the net zero ambition for 2050, ambitious decarbonization targets, and the roadmap for 2030/2040, as well as the OMV Sustainability Framework 2030, which covers all ESG-related material topics relevant to OMV. Strategy, targets, and incentives are well-defined, and the maturity of the ESG management system is regularly reviewed to address gaps identified in the sustainability operating model. For details see G1 Business Conduct and ESRS 2 GOV-1-5a/b.
Sustainability topics are fully integrated into the overall governance structure of the Company. These topics have the same weight as any other business consideration and, following the Company’s responsible approach to business, are integrated into the daily operation and management processes of the Company. For instance, sustainability criteria form part of the Capital Allocation Framework (see E1 Climate Change). ESG due diligence is also part of mergers and acquisitions.
Roles and Responsibilities
OMV has several management-level positions and committees responsible for governance processes, controls, and procedures to monitor, manage, and oversee impacts, risks, and opportunities. Oversight of these roles and committees is conducted through regular meetings, reporting to the Executive Board, and presentations to the Supervisory Board and its committees. The oversight of sustainability-related impacts, risks, and opportunities at OMV is primarily managed by the following bodies and individuals:
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Supervisory Level
The Supervisory Board is the highest organizational level performing oversight of sustainability-related risks and impacts and fulfills its duties in accordance with the applicable law, particularly the Austrian Stock Corporation Act, the Company’s Articles of Association, and the Internal Rules for the Supervisory Board. The Supervisory Board, including through the Sustainability & Transformation Committee, focuses its efforts on embedding effective sustainability initiatives into strategy execution and ensuring oversight of sustainability-related impacts, risks, and opportunities. The Supervisory Board also annually reviews and approves OMV’s Sustainability Statement.
The Supervisory Board appoints among its members qualified expert committees and determines their tasks and powers. The task of the committees is to formulate recommendations for the purpose of preparing resolutions to be passed by the Supervisory Board itself, without thereby preventing the entire Supervisory Board from dealing with matters delegated to the committees. As regards the oversight of sustainability-related impacts, risks, and opportunities at OMV, the Supervisory Board has appointed the following committees in particular:
Sustainability & Transformation Committee
The Supervisory Board’s Sustainability & Transformation Committee focuses its efforts on embedding effective sustainability initiatives into strategy execution. It meets on a quarterly basis to discuss and steer topics such as regulatory ESG requirements, which include non-financial reporting requirements, ESG-related capital market activities, ESG governance and steering, and critical concernsCritical concerns are cases that have attracted significant attention from key stakeholders, have validity (e.g., legal decisions, allegations with significant proof, etc.), are in OMV’s direct operations or value chain, and that would constitute a violation of one of the ten principles of the UN Global Compact. In 2023, three such concerns were flagged and discussed by the Sustainability & Transformation Committee. These concerns included a fatality at the Petrobrazi refinery, climate litigation, and an update on the Borealis Kallo case. related to sustainability. The purpose of the Sustainability & Transformation Committee is to support the Company’s Supervisory Board in reviewing and monitoring OMV’s strategy with regard to sustainability, ESG-related standards, and performance, as well as processes and, specifically, performance in HSSE (health, safety, security, the environment) and, in particular, climate change. Furthermore, the committee serves to support and oversee the transformation process toward a more sustainable business model, including the cultural integration of strategically significant acquisitions.
At the meetings of the Supervisory Board, the Chairman of the Sustainability & Transformation Committee gives a report to the entire plenary on a quarterly basis. The evaluation of the Sustainability & Transformation Committee conducted as part of the Supervisory Board’s self-assessment highlighted strong development since its formation in 2022. For instance, the committee has been actively responsible for monitoring the progress made with regard to OMV’s Sustainability Framework.
The Sustainability & Transformation Committee is informed by Group Sustainability, as the owner of the materiality assessment process, on a regular basis, at least annually, about the outcome of the materiality analysis, including all identified material impacts, risks, and opportunities as well as the implementation of due diligence, and the results and effectiveness of policies, actions, metrics, and targets adopted to address them. ESG aspects are part of the motions for all major transactions subject to OMV Executive Board and Supervisory Board decisions and are taken into account in decision-making for all major transactions, as well as being part of due diligence processes for M&A activities. As part of the decision-making process, there is always a balance between the potential risks and the opportunities to ensure sustainable growth. Strategic decision-making involves evaluating the trade-offs between taking risks, addressing impacts, and seizing opportunities.
Audit Committee
The Audit Committee is responsible for monitoring the effectiveness of the Company’s internal control, internal audit, and risk management systems. It reviews the functioning of these systems and reports its findings to the Supervisory Board. Additionally, the committee monitors the independence of auditors and reviews audit fees and activities. Internal Audit, which reports to the Executive Board and Audit Committee, provides an evaluation of the effectiveness of governance, risk management, and internal control processes, ensuring that appropriate controls and processes are in place and operating effectively.
The Audit Committee is informed twice per year by the Corporate Risk Management function about the risk profile of OMV. Additionally, the committee diligently oversees the implementation, efficacy, and efficiency of risk management processes and receives an overview of the main risks, impacts, and opportunities through the annual enterprise risk exercise. The Audit Committee approves decisions on major transactions or strategic decisions which includes the evaluation of potential trade-offs between taking risks, addressing impacts and seizing opportunities.
Management Level
The Executive Board is responsible for managing OMV’s impact on the economy, environment, and people, including oversight of material topics such as climate change mitigation, human rights, and safety. The Executive Board takes a proactive stance in overseeing and enhancing OMV’s risk management processes, ensuring a strong risk culture across OMV. It drives the risk management program and sets the tone for a strong risk culture. The CEO and CFO are specifically involved in human rights oversight, receiving biannual briefings on human rights impacts. Additionally, management is involved in assessing and managing climate-related risks and opportunities, as outlined in the TCFD recommendations index. The Executive Board also oversees OMV’s compliance management system, which includes business ethics, anti-corruption, competition law, and trade sanctions.
The Executive Board approves the results of the materiality assessment process, including all identified material impacts, risks, and opportunities. As part of this approval process, the Executive Board is informed by Group Sustainability, as the owner of the materiality assessment process, at least annually, about the outcome of the materiality analysis, including all identified material impacts, risks, and opportunities, as well as the implementation of due diligence, plus the results and effectiveness of policies, actions, metrics, and targets adopted to address them. ESG aspects are considered for all major transactions subject to OMV Executive Board decisions and in decision-making for all major transactions, as well as being part of due diligence processes for M&A activities. As part of the decision-making process, there is always a balance between the potential risks and the opportunities to ensure sustainable growth. Strategic decision-making involves evaluating the trade-offs between taking risks, addressing impacts and seizing opportunities.
The Executive Board fulfills its duties, including risk management oversight, in accordance with the applicable law, particularly the Austrian Stock Corporation Act, the Company’s Articles of Association, and the Internal Rules for the Executive Board. As an incentive for the Executive Board, the Remuneration Policy effective in 2024 integrates GHG and ESG targets into the annual bonus and Long-Term Incentive Plan (LTIP), as approved at the June 2022 Annual General Meeting. OMV has implemented various regulations applicable to the whole Group that define the minimum requirements for sustainability and social responsibility at OMV. OMV Aktiengesellschaft also complies with the Austrian Code of Corporate Governance, which aims to establish a system of management and control that is accountable and oriented toward creating sustainable, long-term value.
The Executive Board is responsible for setting and implementing the Company strategy, including sustainability targets. It meets at least every two weeks to exchange information and make decisions on matters requiring plenary approval. Accountability for OMV’s strategic targets lies with the OMV Executive Board. Corporate functions such as Investor Relations & Sustainability, Group HSSE, Strategic Planning & Projects, People & Culture, Compliance, and Procurement, all of which report directly to the Executive Board, have ownership for material topics and are responsible for defining and implementing sustainability initiatives in collaboration with Group Sustainability and the business divisions. These functions regularly report on the progress of the implementation of OMV’s Sustainability Framework to the Executive Board. The Remuneration Committee evaluates the performance of the Executive Board, including sustainability criteria, and establishes criteria derived from OMV’s Strategy 2030, with a focus on GHG emissions reduction.
Risk Committee
The Risk Committee, chaired by OMV’s CFO, ensures that the risk management process effectively captures and manages material risks across OMV. Management is tasked with implementing appropriate mitigation strategies for identified risks and is responsible for ensuring the effectiveness of these strategies through a structured process of risk identification, assessment, and evaluation. Additionally, management ensures that processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management framework.
Twice per year, the Risk Committee is informed by Group Sustainability about the identified material impacts, risks, and opportunities. The Risk Committee evaluates the risk mitigation measures in terms of effectiveness and timely implementation when addressing major risks, recommending actions to the OMV Executive Board in the event that risk tolerance levels are breached. The results of OMV’s risk profile are further reported to the Executive Board and Audit Committee. The Risk Committee approves decisions on major transactions or strategic decisions, which includes the evaluation of potential trade-offs between taking risks, addressing impacts, and seizing opportunities.
Sustainability Coordination Forum
In 2023, a committee called the Sustainability Coordination Forum was formed under the Executive Board. This committee is chaired by OMV’s CFO and consists of senior managers with responsibility and ownership for material topics, as well as relevant business representatives responsible for implementing OMV’s sustainability and transformation agenda. Its mandate is to coordinate the development of the sustainability agenda across OMV, monitor progress on target achievement, propose measures in the event of deviations and prepare sustainability topics to be discussed by the Executive and Supervisory Boards. The committee meets at least bimonthly.
The Sustainability Coordination Forum is informed at least twice per year by Group Sustainability during the materiality assessment process about the material impacts, risks, and opportunities and the results and effectiveness of policies, action, metrics, and targets. The Sustainability Coordination Forum also defines the materiality thresholds for OMV. The overall results of the materiality assessment are approved by the Sustainability Coordination Forum and prepared for Executive Board approval. The Sustainability Coordination Forum approves decisions on major transactions or strategic decisions, which includes the evaluation of potential trade-offs between taking risks, addressing impacts, and seizing opportunities.
The Sustainability Coordination Forum ensures that material impacts, risks, and opportunities are well understood and managed in line with OMV’s sustainability targets. It reviews OMV’s exposure to impacts, risks, and opportunities and the related action plans, ensuring they align with sustainability targets. The oversight and escalation processes support continuous monitoring of OMV’s sustainability risk profile.
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The effective management of identified impacts and risks is reviewed at the second line of defense through well-established communication between the Sustainability Coordination Forum and the Risk Committee. The Sustainability Coordination Forum aids decision-making by reviewing material ESG impacts, risks, and opportunities by discussing them during the bimonthly meetings. ESG impacts, risks and opportunities information is fully integrated into OMV’s risk profile and discussed by the Risk Committee before being reported to the Executive Board. While material impacts, risks, and opportunities were identified in the reporting year through a top-down materiality assessment exercise, sustainability matters are already addressed locally across the organization. The existing risk management reporting process will be further adapted to incorporate local risk registers based on material impacts and risks according to the ESG criteria established by responsible experts.
Group Sustainability Department
Under the responsibility of the CFO, the Group Sustainability department develops OMV’s Sustainability Framework, defines the minimum requirements for sustainability management in OMV, ensures governance and ownership of material topics, and is responsible for ESRS-compliant sustainability reporting and ESG disclosure. The Group Sustainability department, in close collaboration with the material topic owners, who act as experts for their respective topics, drives the overarching sustainability agenda for all material topics, integrated into the overall execution of OMV’s strategy. Group Sustainability reports quarterly on the progress of the implementation of OMV’s Sustainability Framework to the Executive Board and Supervisory Board. Further details are disclosed in the Governance descriptions of each material topic found throughout this report.
ESG risks can manifest themselves in various forms that have already been identified within the organization, while ESG impacts can intersect with different risk management activities across OMV. The Sustainability Risk Management program was established by Group Sustainability to support the Company in assessing and mitigating ESG risks and impacts that could jeopardize the achievement of mid-term and long-term objectives while embracing opportunities. For each material topic, a material owner has been assigned at various levels of the organization. The owner of a material topic is the key driver of that topic and is responsible for translating the ESRS requirements into business action plans, and implementing dedicated resources, controls, and procedures to manage the respective impacts, risks, and opportunities. They define, monitor, and report the targets and metrics related to the material topic, in line with the sustainability agenda defined by Group Sustainability, and report the associated material impacts, risks, and opportunities. Additionally, Internal Audit provides assurance that the Group’s risk management program is functioning effectively, supporting the Group Sustainability department with recommendations for potential improvements. This ensures that the sustainability risk management process is structured, consistent, and continuously applied across OMV.
OMV Group Sustainability is the owner of the materiality assessment process and ensures that the other relevant administrative, management, and supervisory bodies receive information about the material impacts, risks, and opportunities. Group Sustainability, together with material topic owners, defines the policies, actions, metrics, and targets to address material impacts, risks, and opportunities, and ensures the implementation of due diligence. Group Sustainability supports the decision-making regarding major transactions by providing specialized oversight and guidance on sustainability aspects.
Corporate Risk Management Function
This independent function within the CFO area reports directly to the Executive Board and is independent of the business lines, thus ensuring effective risk governance. OMV has established comprehensive risk management processes that integrate the management of impacts, risks, and opportunities into other internal functions. The risk management process combines bottom-up and top-down approaches, ensuring that every employee is responsible for implementing appropriate mitigation strategies. Risks are identified and assessed using a standardized methodology that includes environmental aspects and impacts. The process is facilitated by a Group-wide IT system supporting risk identification, analysis, evaluation, treatment, and review, guided by the ISO 31000/27000 series. The integration with internal functions is reinforced through a cross-functional Risk Committee chaired by the OMV CFO, involving senior management members. This committee ensures that material risks are captured and managed effectively across OMV. The process also involves regular discussions by the Executive Board regarding environmental, climate, and energy-related policies and regulations, as well as progress on sustainability-related targets. Moreover, the risk management processes are centrally coordinated by the Treasury and Risk & Insurance Management departments to ensure consistent application of risk management tools and techniques across the organization.
OMV’s Enterprise-Wide Risk Management (EWRM) program focuses on assessing and addressing material impacts and risks, including those related to environmental, social, and governance (ESG) topics. The sustainability risk management activities provide a systematic approach to addressing ESG-related risks and opportunities for the Company’s objectives or impacts on the environment or society over various time horizons, fully integrated within the Enterprise-Wide Risk Management framework applicable to OMV. OMV continually enhances this process based on internal and external requirements. The same risk management information technology application used for Enterprise-Wide Risk Management, the Active Risk Management System, is employed to collect, analyze, manage, and report material impacts, risks, and opportunities. Effective risk governance is crucial for successfully navigating the uncertainties inherent in OMV’s operations.
The Corporate Risk Management function integrates the material impacts, risks, and opportunities into OMV’s risk profile twice per year based on the information provided by Group Sustainability and the related actions. For major transactions, the Corporate Risk Management function proposes trade-off strategies to mitigate identified risks and seize opportunities.
The list of all material impacts, risks, and opportunities addressed in the reporting period by relevant OMV administrative, management, and supervisory bodies (Supervisory Board, Executive Board, Sustainability & Transformation Committee, Audit Committee, Sustainability Coordination Forum, Risk Committee) as described above are all material impacts, risks, and opportunities as disclosed in section SBM 3 – Material impacts, risks, and opportunities and their interaction with the strategy and business model.